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Calpine declares bankruptcy, cites natural gas prices

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Thursday, December 22, 2005

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Electrical power generator Calpine Corporation declared bankruptcy on Tuesday. The San Jose, California based company filed for Chapter 11 bankruptcy protection in U.S. Federal Court, to facilitate debt restructuring and to allow for normal operations to continue. Calpine has obtained secured debtor-in-possession financing from Deutsche Bank and Credit Suisse First Boston totaling $2 billion. The company announced that some of its Canadian subsidiaries would also file for creditor protection under the Companies' Creditors Arrangement Act. Calpine and its subsidiaries operate natural gas and geothermal electricity generating plants in 21 U.S. states and 3 Canadian provinces.

The recent rise in natural gas prices due to Hurricanes Rita and Katrina has pushed Calpine's cost significantly above the locked in selling price for its long-term contracts. Calpine has asked the court to void eight long term contracts, including a 20-year contract entered into with the State of California's Department of Water Resources and Pacific Gas and Electric Company in 2001.

The company received permission on December 21 from the Federal Bankruptcy Court for the Southern District of New York to use $500 million of its financing to continue operating and to keep paying its employees' salaries and benefits.


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  This page is archived, and is no longer publicly editable.
Articles presented on Wikinews reflect the specific time at which they were written and published, and do not attempt to encompass events or knowledge which occur or become known after their publication.

Got a correction? Add the template {{editprotected}} to the talk page along with your corrections, and it will be brought to the attention of the administrators.

Please note that due to our archival policy, we will not alter or update the content of articles that are archived, but will only accept requests to make grammatical and formatting corrections.

Note that some listed sources or external links may no longer be available online due to age.
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