Calpine Automated Power Exchange claims release settlement approved

By Caroline Salls

Pittsburgh, Feb. 7 - Calpine Corp. obtained court approval of a release of claims between some Calpine debtors and Automated Power Exchange market participants, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, since the summer of 2000, Calpine Energy Services LP has been embroiled in litigation and regulatory proceedings related to its sales of electricity during the California energy crisis in 2000 and 2001.

Most of Calpine Energy's transactions during this period were conducted by selling electricity through a coordinating entity known as the Automated Power Exchange.

Numerous claims for refunds were asserted by buyers in the California markets against sellers of electricity, including sellers which participated through the APX.

In the APX disputes, various market participants asserted $13.6 million in claims against Calpine Energy related to sales of electricity through APX, which still owes Calpine Energy a $5.2 million short payment for sales of electricity made during early 2001.

As a result, Calpine Energy and the APX market participants have entered into a settlement and release of claims agreement under which Calpine Energy will receive half of the short payment, plus a return of roughly $124,378 in collateral previously posted with APX.

Calpine Energy will also receive a full release of its alleged liability.

In furtherance of the release, the claims filed in Calpine's reorganization cases by Enron Energy Services, Inc., Enron Power Marketing, Inc. and Constellation NewEnergy, Inc. related to alleged Calpine Energy liability will be withdrawn, and the portion of the proof of claim filed by FERC that relates to the alleged Calpine Energy liability will be deemed satisfied.

In exchange for these benefits, Calpine Energy agreed that the other half of the short payment, plus accrued interest, will be contributed to an APX escrow account to be allocated to other parties.

Calpine, a San Jose, Calif., power company, filed for bankruptcy on Dec. 20, 2005. Its Chapter 11 case number is 05-60200.

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