Power Customers Seek Delay of Hearing on Calpine Contracts

From Reuters

Three of the biggest players in the California energy market have filed papers with the U.S. Bankruptcy Court in New York seeking to block Calpine Corp. from using its insolvency to get out of long-term power supply contracts.

Southern California Edison, a unit of Rosemead-based Edison International Inc., and the California Department of Water Resources filed papers with the court Wednesday seeking more time for research and interviews, and more hearings on whether Calpine could reject certain contracts.

In addition, Edison filed, and the water resources department said it would file, a motion to withdraw the question of the contract rejection from the Bankruptcy Court entirely and move it to a district court for a decision on whether the Federal Energy Regulatory Commission has jurisdiction on the contract rejection.

They were joined Thursday by Pacific Gas & Electric, a unit of PG&E; Corp., which sent a letter to Judge Burton Lifland joining in the water resources department’s request to postpone the scheduled Jan. 5 contracts hearing.

Calpine, in one of its first motions in Bankruptcy Court, sought the authority to reject eight “financially burdensome and unprofitable” contracts, under which it said it would lose $1.2 billion over their remaining terms.


Among the eight contracts are one to provide 1,000 megawatt hours of electricity to the California Department of Water Resources through Dec. 31, 2009, and another to sell Southern California Edison 200 megawatts of electricity through April 1, 2013.

Edison, in its Wednesday filing, said the parties involved in the potential contract rejection needed more time to conduct discovery.

Separately, Edison moved for an order to withdraw the case from Bankruptcy Court to a federal district court so the issues related to FERC’s jurisdiction over the contracts could be decided.

Calpine filed for bankruptcy protection Dec. 20, declaring more than $26 billion in assets and more than $22 billion in debts.