Subject: New Calpine Twist
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked]
Date: Thu, 4 Oct 2001 11:05:19 -0700 (PDT)

It's getting strange...

Calpine wants to see our offer:

Big Prepay - $200MM - $300MM
EPMI Sells 200MW+ 7x24 
DP: NP-15 or SP-15
Price: $61 
Start: 7/02
Term: 5-10 years

Rationale: They have $61 DWR contracts.  At this point the DWR contracts are tied to their accrual generation business.  If we pay them for the right to sell $61's, they can get the cash and recognize the earnings.  

Like the rest of this story, selling to a generator sounds strange.  However, if the forward market is trading below their stated price forecast, they may want to buy, not sell.  

Perhaps we go down a parallel path: bids in the East, offers in the west.  

Maybe we end up in a seller-financing deal: loan $ for investment in New Power and purchase of sites, equipment, ERC's.  

Dave and I are available to compare notes and discuss strategy.

Regards,

Chris Calger
503-464-3735