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Calpine Energy Services Canada Partnership (Cesca) Claim Settlement
In 2006, CESCA, a shipper on the Alliance System accounting for 1.5% of firm capacity, repudiated its firm transportation service agreement with Alliance Canada. Alliance Canada immediately arranged for the placement of this capacity and drew on CESCA's letter of credit for funds equal to twelve months of demand charges in respect of CESCA's former transportation capacity. The funds were deposited into an account held in trust with Alliance Canada's Security Trustee to be applied against any shortfall in tolls arising from the new placement. Transportation revenue for 2007 was unaffected by this repudiation due to the re-marketing of the transportation capacity and use of the funds received as security.
In 2006, Alliance Canada and Alliance US filed proofs of claim in the Calpine Corporation Chapter 11 Bankruptcy proceeding. These claims were in respect of guarantees provided by Calpine Corporation as security for the performance of CESCA's obligations under its transportation contracts. In 2007, an agreement with CESCA and related Calpine entities was reached, which provided Alliance Canada and Alliance US with one general unsecured claim against CESCA. On January 16, 2008, full payment for settlement of the two claims totaling $20.7 million was received.