Calpine withdraws Blue Spruce refinancing motion

By Caroline Salls

Pittsburgh, March 21 - Calpine Corp. withdrew its long-standing motion for approval of a $101.6 million amortization loan refinancing for debtor Blue Spruce Energy Center LLC that was expected to return $14 million to Calpine, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The original motion was filed on Oct. 4, and the hearing has been postponed several times since the originally scheduled Oct. 25 hearing date.

The withdrawal notice said the April 4 hearing has been subsequently cancelled.

According to the motion, debtor Calpine Operating Services Co., Inc. is a party to an operating and maintenance agreement with Blue Spruce for the plant.

As security for Blue Spruce's obligations under its power purchase agreement, The Public Service Co. of Colorado was the beneficiary of a $14 million letter of credit collateralized with Calpine's corporate funds, as well as a $19.6 million Calpine guarantee of Blue Spruce's obligations under the power purchase agreement.

After the power purchase agreement expired, the Blue Spruce plant's output was contracted under a power purchase agreement with Calpine Energy Services, Inc.

Blue Spruce had $60.5 million outstanding under an amortizing term loan with Beal Bank, maturing in 2018, and, in an effort to increase the long-term profitability of the Blue Spruce plant, Blue Spruce was looking to refinance the Beal loan through CoBank and GMAC Commercial Finance.

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

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