INDIANTOWN COGENERATION LP
8-K, 2001-01-19
ELECTRIC SERVICES
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                       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: January 19, 2001

                         Commission File Number 33-82034


                          INDIANTOWN COGENERATION, L.P.
            (Exact name of co-registrant as specified in its charter)

      Delaware                                        52-1722490
      --------                                        ----------
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
incorporation or organization)



                   Indiantown Cogeneration Funding Corporation
            (Exact name of co-registrant as specified in its charter)

       Delaware                                       52-1889595
       --------                                       ----------
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
incorporation or organization)



                      7500 Old Georgetown Road, 13th Floor
                          Bethesda, Maryland 20814-6161
              (Registrants' address of principal executive offices)


                                 (301)-718-6800
              (Registrants' telephone number, including area code)



<PAGE>


Item 5. Other Events.

General

        On  December  19,  2000,  Florida  Power &  Light  Company  ("FPL")  and
Indiantown  Cogeneration,  L.P. (the "Partnership")  participated in a mediation
conference with respect to the pending litigations  described below. As a result
of this conference,  FPL and the Partnership executed two Settlement  Agreements
intended to resolve all pending  litigation.  Only the Settlement  Agreement for
the pending  federal  court  litigation  requires  amendment  of the power sales
agreement.  The  amendment  must  be  approved  by the  Florida  Public  Service
Commission,  and certain  conditions  set forth in the  Indenture for the Bonds,
including confirmation of the Bonds' investment grade rating, must be met for it
to become effective.

Settlement of Pending Federal Court Litigation
----------------------------------------------

        An outline of the business terms set forth in this Settlement  Agreement
provides that if the Facility is off-line for any reason,  the Partnership shall
have the right,  upon up to 6 hours notice and subject only to safety and system
reliability  issues,  to reconnect to FPL's system and produce up to 100 MW. The
Settlement  Agreement  provides that if this occurs when FPL has decommitted the
Facility,  the Partnership will be paid FPL's actual "as available" energy rates
for the  first 360 of such  hours  each year (in this  context,  "as  available"
energy costs  reflect  actual energy  production  costs avoided by FPL resulting
from the production or purchase of energy from the Facility and other  sources).
If fewer than 360 hours are used in any year, FPL may carry the balance forward,
not to  exceed  a total of 1440  hours in any  year.  If the  hours  accumulated
exercising this reconnection right exceed FPL's balance, the Partnership will be
paid for energy  produced during those hours at the energy rates set forth under
the power sales agreement.

        Management of the Partnership believes that this resolution provides the
Partnership with the flexibility it requires to maintain its Qualifying Facility
status without materially adversely affecting the Project.

Settlement on New State Court Litigation
----------------------------------------

        On December 12, 2000, FPL filed a complaint  against the  Partnership in
the  Circuit  Court of the 19th  Judicial  District  in and for  Martin  County,
Florida. In its complaint,  FPL alleged that the Partnership  breached the power
sales  agreement by failing to include  certain  payments from its coal supplier
and its coal  transporter  in the  Partnership's  calculation  of its fuel costs
which are included in the calculation of the actual energy costs under the power
sales agreement.  The power sales agreement  requires a sharing of actual energy
costs  between FPL and the  Partnership  to the extent the actual  costs  differ
(either  upward or  downward)  from a formula  contained in the  agreement.  FPL
sought  unspecified  damages and declaratory relief including a finding that the
Partnership  breached  the  power  sales  agreement.  The  Settlement  Agreement
provides that the  Partnership  will include in future  calculations of its fuel
costs all costs, credits, rebates,  discounts, and  allowances/concessions  from
all past, current or future vendors of fuel, ash, lime, and fuel  transportation
subject to  execution  of a  definitive  agreement  embodying  the terms of this
Settlement

<PAGE>

Agreement.  The  Partnership  will make a one time payment of $800,000 to FPL as
settlement for disputed  amounts under fuel audits  performed for calendar years
1997 and 1998.


<PAGE>


                                    SIGNATURE

        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.

                                    Indiantown Cogeneration, L.P.
                                    (Co-Registrant)


Date:   January 19, 2001           ___________________________________
                                   John R. Cooper
                                   Vice President
                                   (Chief Financial Officer)



                                   Indiantown Cogeneration Funding
                                   Corporation
                                   (Co-Registrant)

Date:   January 19, 2001           ________________________________
                                   John R. Cooper
                                   Vice President
                                   (Chief Financial Officer)


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