Yesterday, when I wrote the piece the stock was trading at about $1.55/share, around a $750M market cap. I could imagine paying up to $1.5B for Calpine, disposing of the unprofitable natural gas generation business, starting further geothermal development, and reemerging as the largest pure-play renewable generation company in the country. (Yes, FPL has lots of wind and solar thermal, but the capacity factor on wind generously is 35% and solar thermal is 24%.) It wouldn’t be easy or simple, but it would be worthwhile. If I had access to that kind of cash, that’s what I’d do…

On the $100M comment, if you only factor the geothermal plants and take assumptions of an 800MW portfolio operating at 90% with a net power purchase price of $60/MWh (yes, you can get more, but Calpine’s PPAs are long in the tooth) you’ll get a gross revenue number of around $380+M for the geothermal portfolio. That’s likely an understated number. Factoring in debt service, O&M costs, and provision for income tax would leave net income in the $100M range, we think. These numbers aren’t broken out in Calpine’s reporting, but there are comparable performance metrics available which lead us to that conclusion.

Thanks for commenting, hope that answers your questions.

Also, what did you mean by calpine “throwing off an exess of 100 m”? Is you implication that most of the profit is coming from the geysers?

Thanks

Craig

Thanks for the comment and that’s a very interesting observation. I didn’t know about the history between Caithness and ArcLight.

Thanks,
Mike