Calpine Bullish on ERCOT Market, Evaluating Incremental Capacity Additions

Calpine said that it is "dusting off" plans to add to its existing fleet in ERCOT through incremental brownfield development, in reporting earnings Friday.

Specifically, COO Thad Hill said that Calpine is "dusting off" plans for low dollar-per-kW expansion opportunities at two of its ERCOT plants where Calpine has an oversized steam turbine and can deploy a CT it already owns.

Calpine will evaluate whether it can complete these additions at a low enough cost to proceed with them under a purely merchant play.

"We are deeply bullish on Texas. The market will work, it's just a matter of when," Hill said, specifically referring to the projected supply-demand imbalance which must eventually be reflected in pricing.

For the second quarter, Calpine narrowed its net loss to $70 million, versus $115 million a year ago.

Adjusted EBITDA was higher at $406 million, compared to $381 million in the second quarter of 2010, primarily from the acquisition of the Conectiv assets which closed after the end of last year's second quarter.