CPN: Calpine Corporation Message Board

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Gold/Mining/Energy : CPN: Calpine Corporation

FRO 23.66

-0.3%

Nov 7 9:30 AM EST

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To: Clement who wrote (216)	12/19/2001 10:24:15 AM
From: Bob Rudd	Read Replies (1) of 555

These comments out of GE lead me to speculate that construction slowdown is afoot: >>12/18/01 9:51:41 AM FROM GE: POWER BUSINESS. GE said it is in discussions with its BIGGEST CLIENT [CPN?]. It appears that deliveries of gas turbines will be stretching out (not cancellations, but stretch outs). GE assumes that the gas turbine/power business will peak in shipments in 02 at 320 units and then drop by more than 1/3 to 200 units in 03, costing the company $500-700mil in net income in 03.>> Anyone that based their investment thesis for CPN on the idea of 20-30% growth out 5 to 10 years was fantasizing, methinks, in a world where power consumption is rougly apace with GDP. There's a substantial deficit in capacity below the hoped for peak power demand +15%, but that deficit will be closed in the next 3 - 5 years. A concern with Calpine is that there would be substantial overbuilding that would result in diminished cashflows from existing plant. With capital drying up and building plans being increasingly scrutinized, stretched out or cancelled, this becomes less of a risk. Ironically the heightened sense of risk in the short term reduces risk in the long term. [The above is non-expert opinion/observation - critique invited]

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