8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 10, 2011

CALPINE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-12079	77-0212977
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

717 Texas Avenue, Suite 1000, Houston, Texas 77002

(Addresses of principal executive offices and zip codes)

Registrant’s telephone number, including area code: (713) 830-8775

Not applicable

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

ITEM 7.01 — REGULATION FD	2
ITEM 9.01 — FINANCIAL STATEMENTS AND EXHIBITS	3
SIGNATURES	4
EXHIBIT INDEX	5

1

ITEM 7.01 — REGULATION FD

On January 10, 2011, Calpine Corporation (the “Company”) announced that it intends to offer $1.2 billion in aggregate principal amount of Senior Secured Notes due 2023 in a private placement. A copy of the press release is being furnished as Exhibit 99.1 hereto.

In connection with this transaction, the Company provided the following disclosure to the investors.

On December 8, 2010, we purchased entities from CIT Capital USA Inc. that held the leases for our Broad River and South Point power plants by assuming debt with a fair value of approximately $297 million ($280 million face value) and a cash payment of $40 million. Prior to this purchase, these plants were leased from the purchased entities of CIT Capital USA Inc. Previously our Broad River power plant was operated under a sale-leaseback transaction that was accounted for as a failed sale-leaseback financing transaction and our South Point power plant was accounted for as an operating lease. The purchase of the entities holding the power plant leases only added an incremental $85 million in consolidated debt, as the transaction eliminated approximately $212 million recorded as debt and accrued interest owed to CIT Capital USA Inc. under our Broad River power plant lease. For accounting purposes, we expect to account for this transaction as a refinancing of existing debt since we primarily exchanged future lease obligations for a debt obligation, and expect to record a net, non-cash loss of approximately $125 million in our fourth quarter of 2010, While the transaction results in a one time, non-cash loss, the acquisition of these entities grants us greater flexibility and more control of the future operation of both plants.

As of December 31, 2010, we had no borrowings outstanding under our revolving credit facility, except $443 million of letters of credit outstanding which includes those reissued from or backstopped by our revolving credit facility.

Existing and future GHG/Carbon legislation and other air emissions regulations could cause us to incur significant costs and adversely affect our operations, generally or in a particular quarter when such costs are incurred.

Environmental laws and regulations have generally become more stringent over time, and this trend is likely to continue. In particular, there is growing likelihood that carbon tax or limits on carbon, CO₂ and other greenhouse gas (“GHG”) emissions will be implemented at the federal or expanded at the state or regional levels. In 2009, ten states in the northeast began the compliance period of a cap-and-trade program, Regional Greenhouse Gas Initiative, to regulate CO₂ emissions from power plants. California is in the process of implementing plans for Assembly Bill 32 which places a statewide cap on GHG emissions and requires the state to return to 1990 emission levels by 2020. In December 2010, the California Air Resources Board adopted a regulation establishing a GHG cap-and trade program which takes effect in 2012 for electric utilities and other “major industrial sources,” and in 2015 for certain other GHG sources.

During 2009, the U.S. House of Representatives proposed “The American Clean Energy and Security Act of 2009,” and the Senate Environment and Public Works Committee proposed the “Clean Energy Jobs and American Power Act,” which both addressed climate change. Both of these acts failed and the November 2010 election resulted in a change in control of Congress, with Republicans controlling the U.S. House of Representatives. While the Senate may continue considering legislation addressing climate change, it is unlikely that such legislation will be enacted in the near term. Instead, more emphasis will be placed on increasing the regulations, powers and activities of the Environmental Protection Agency (“EPA”) under the Clean Air Act. In 2010, the EPA proposed or finalized regulations governing GHG emissions from major sources as well as emissions of NOx and SO₂ from the electric generation sector. Although we cannot predict the ultimate effect of future changes climate change legislation or regulations could have on our business, we believe we will face a lower compliance burden than some of our competitors due to the relatively low GHG emission rates of our fleet. We continue to monitor and actively participate in the processes where we anticipate an impact on our business.

2

The unknown impact from the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as the rules to be promulgated under it could have an adverse impact on our ability to hedge risks associated with our business, require the implementation of additional policies and require us to incur administrative compliance costs.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) was signed into law on July 21, 2010. Title VII of the Dodd-Frank Act addresses regulatory reform of the over-the-counter (“OTC”) derivatives market in the U.S. and significantly changes the regulatory framework of this market. Title VII will be effective 360 days from the enactment of the Dodd-Frank Act and the implementing regulation is to be completed by the same date. Until these regulations have been finalized, the extent to which the provisions of Title VII might affect our derivatives activities is unknown. A number of features of the legislation may impact our existing business. One of the most significant of these is the requirement for central clearing of many OTC derivatives transactions with clearing organizations. This requirement is subject to an end-user exception. Whereas our OTC transactions have traditionally been negotiated on a bilateral basis, including the collateral arrangements thereunder, they now will be subject to the collateral and margining procedures of the clearing organization. To the extent the end-user exception is available to us, we may elect not to clear certain transactions. In these instances, the collateral margining requirements for these uncleared transactions might be subject to the requirements prescribed by this regulation. It is not known at this time whether, and, if so, to what extent, we will be required to provide collateral (for both our cleared and uncleared transactions) in excess of what is currently provided under our existing hedging relationships. Further, it is not certain whether the new margin requirements will apply retroactively to existing OTC derivatives transactions. Other features of the Dodd-Frank Act which will have an impact on our derivatives activities include trade reporting, position limits and trade execution. The effect of the Dodd-Frank Act on traditional dealers and market-makers as well as the consequential effect on market liquidity and, hence, pricing is uncertain.

In addition to legislation and rule making provisions related to derivative transactions, the Dodd-Frank Act contains a variety of provisions designed to regulate financial markets. Further, many aspects of the Dodd-Frank Act are subject to rulemaking that will take effect over several years, thus making it difficult to assess its impact on us at this time. We expect to successfully implement any new applicable legislative and regulatory requirements and may incur additional costs associated with our compliance with the new regulations and anticipated additional reporting and disclosure obligations; however, we do not expect such costs to be material to us.

ITEM 9.01 — FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit No.	Description
99.1	Calpine Corporation Press Release dated January 10, 2011.*

* Furnished herewith.

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CALPINE CORPORATION

	By:	/s/ Jim D. Deidiker
		Jim D. Deidiker
		Sr. Vice President and
		Chief Accounting Officer
Date: January 10, 2011

4

EXHIBIT INDEX

Exhibit No.	Description
99.1	Calpine Corporation Press Release dated January 10, 2011.*

* Furnished herewith.

5

EX-99.1

Exhibit 99.1

CONTACTS:	NEWS RELEASE
Media Relations:	Investor Relations:
Norma F. Dunn	Andre Walker
713-830-8883	713-830-8775
norma.dunn@calpine.com	andrew@calpine.com

Calpine Corporation Announces Senior Secured Notes Offering

(HOUSTON, Texas) – January 10, 2011 – Calpine Corporation (NYSE: CPN) today announced that it intends to offer $1.2 billion in aggregate principal amount of Senior Secured Notes due 2023 in a private placement. The notes will be guaranteed by each of Calpine Corporation’s current and future subsidiaries that is a guarantor under Calpine Corporation’s revolving credit facility. The notes and related guarantees will be secured equally and ratably with the indebtedness incurred under Calpine Corporation’s revolving credit facility and other indebtedness that is permitted to be secured by such assets, by a first-priority lien on substantially all of Calpine Corporation’s and certain of the guarantors’ existing and future assets, subject to certain exceptions and permitted liens. Calpine Corporation intends to use the net proceeds from this offering, together with cash on hand, to repay the remaining $1.2 billion of term loan borrowings outstanding under its existing credit facility, terminating the facility in connection therewith, and to pay fees and expenses in connection with the offering and such repayment and termination.

The notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the U.S. without registration under the Securities Act or pursuant to an applicable exemption from such registration.

This announcement does not constitute an offer to sell, or the solicitation of offers to buy, any security and shall not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Calpine

Founded in 1984, Calpine Corporation is a major U.S. power company, currently capable of delivering approximately 27,500 megawatts of clean, cost-effective, reliable and fuel-efficient power from its 91 operating plants to customers and communities in 20 states in the United States and Canada. Calpine Corporation is committed to helping meet the needs of an economy that demands more and cleaner sources of electricity. Calpine Corporation owns, leases and operates low-carbon, natural gas-fired and renewable geothermal power plants. Using advanced technologies, Calpine Corporation generates power in a reliable and environmentally responsible manner for the customers and communities it serves.

-more-

Calpine Corporation Announces Senior Secured Notes Offering

Page 2

January 10, 2011

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Words such as “believe,” “intend,” “expect,” “anticipate,” “plan,” “may,” “will,” “should,” “estimate,” “potential,” “project” and similar expressions identify forward-looking statements. Such statements include, among others, those concerning expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results to differ materially from those anticipated in the forward-looking statements. Please see the risks identified in this release or in Calpine Corporation’s reports and registration statements filed with the Securities and Exchange Commission, including, without limitation, the risk factors identified in its Annual Report on Form 10-K for the year ended Dec. 31, 2009, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010 and September 30, 2010. These filings are available by visiting the Securities and Exchange Commission’s Web site at www.sec.gov or Calpine Corporation’s Web site at www.calpine.com. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements. Other than as required by law, Calpine Corporation undertakes no obligation to update any such statements, whether as a result of new information, future events, or otherwise.

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