Calpine rakes in profits thanks to electricity crisis

Prompted by bullish Calpine projections issued last month, the consensus earnings estimate among analysts surveyed by Thomson Financial/First Call had climbed from 13 cents to 24 cents per share.

Wall Street cheered Thursday's news as Calpine's stock rose by $1.39 to close at $54.99 on the New York Stock Exchange.

With the first-quarter profit, Calpine joins the parade of power producers that took advantage of high electricity and natural gas prices to deliver huge earnings gains to their shareholders.

Calpine is the only California-based generator among the quarter's big winners. About 20 percent of Calpine's 5,900 megawatts of capacity is in California.

The company is building three more California plants with a combined 1,900 megawatts as part of an expansion that will add 32,000 megawatts to Calpine's capacity during the next few years.

California's other major power plants are owned by companies based outside the state.

Calpine management says its profits aren't coming at California's expense because it sells only a small amount of electricity in the state's spot market, where prices are the highest. About 90 percent of Calpine's California capacity for this year already has been sold in long-term contracts, executives told industry analysts during a conference call.

But energy-starved California, along with its neighboring states, is still Calpine's most lucrative market.

Calpine collected an average price of $103.04 per megawatt hour in the West during the first quarter, more than double the average price of $46.18 last year.

In the Central states, Calpine charged an average of $67.74 per megawatt hour, up 96 percent from last year. In the East, Calpine received an average of $69.59 per megawatt hour, a 20 percent increase from an average of $57.79 last year.

Nationwide, Calpine's average electricity price stood at $82.21 per megawatt hour in the first quarter, up 94 percent from last year's average of $42.33.