Calpine apparently sells 600MW in California to Pacific Gas & Electric Co. at a rate approved by the federal government said the article below. I wonder if CPN are worried about getting paid if PG&E goes bankrupt? Stock market doesn't seem to reflect that concern today.
Calpine seems like an interesting utility worth watching...today it jumped over 7%, that is pretty attractive for a utility is it not?
-def
Calpine Expects Earnings To Soar
SAN JOSE, Calif., Jan 05, 2001 (AP Online via COMTEX) -- Shares of Calpine Corp. rose nearly 8 percent Friday after the electricity producer said its earnings in the fourth quarter of 2000 and all of 2001 will be higher than expected.
It was unclear how much the increases could be attributed to the soaring electricity costs being blamed for California's power crisis. Calpine generates electricity and sells it to utilities, but mostly at rates locked in over long-term contracts.
The San Jose-based company projects earnings of 30 cents per share in the fourth quarter; analysts surveyed by First Call/Thomson Financial had been forecasting 24 cents a share.
Calpine expects to earn $1.25 per share in 2001, up from analysts' predictions of $1.20.
The news helped Calpine shares rise $2.56 to $35.06 Friday on the New York Stock Exchange.
Spokesman Bill Highlander attributed much of Calpine's profit gains to the company's fast growth and key acquisitions. He would not quantify how much of the company's revenue comes from California, where power costs have soared because capacity has not kept pace with demand.
"We have certainly benefited from higher prices in California, but the great majority of our electricity is already sold on long-term contracts," he said.
Calpine runs 50 power plants in 15 states, generating a total of 4,900 megawatts of electricity, and is building 23 more plants. About 1,200 megawatts (enough to power 1.2 million homes) are generated in California, with half sold to Pacific Gas & Electric Co. at a rate approved by the federal government.
Linda Byus, an analyst with Dresdner Kleinwort Benson in Chicago, said Calpine appeared to be benefiting more from keeping costs down than from high prices in the California power crunch.
"They are not the ones getting the big gains from it," she said. "It's not being driven necessarily by the problems."
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