![]() Bank of America Merrill Lynch 2010 Power & Gas Leaders Conference September 29, 2010 Thad Hill Executive Vice President, CCO Exhibit 99.1 |
![]() 1 1 Safe Harbor Statement Forward-Looking Statements The information contained in this presentation includes certain estimates, projections and other forward-looking information that reflect Calpine’s current views with respect to future events and financial performance. These estimates, projections and other forward-looking information are based on assumptions that Calpine believes, as of the date hereof, are reasonable. Inevitably, there will be differences between such estimates and actual results, and those differences may be material. There can be no assurance that any estimates, projections or forward-looking information will be realized. All such estimates, projections and forward-looking information speak only as of the date hereof. Calpine undertakes no duty to update or revise the information contained herein. You are cautioned not to place undue reliance on the estimates, projections and other forward-looking information in this presentation as they are based on current expectations and general assumptions and are subject to various risks, uncertainties and other factors, including those set forth in Calpine’s Annual Report on Form 10-K for the year ended December 31, 2009, Quarterly Report on Form 10-Q for the quarters ended March 31 and June 30, 2010, and in other documents that Calpine files with the SEC. Many of these risks, uncertainties and other factors are beyond Calpine’s control and may cause actual results to differ materially from the views, beliefs and estimates expressed herein. Calpine’s reports and other information filed with the SEC, including the risk factors identified in its Annual Report on Form 10-K for the year ended December 31, 2009, and Quarterly Report on Form 10-Q for the quarters ended March 31 and June 30, 2010, can be found on the SEC’s website at www.sec.gov and on Calpine’s website at www.calpine.com. Reconciliation to GAAP Financial Information The following presentation includes certain “non-GAAP financial measures” as defined in Regulation G under the Securities Exchange Act of 1934. Schedules are included herein that reconcile the non-GAAP financial measures included in the following presentation to the most directly comparable financial measures calculated and presented in accordance with GAAP. |
![]() 2 Agenda • Introduction to Calpine • Look Back at Last Two Years • 2012 & Beyond |
![]() 3 3 3 National Portfolio of Nearly 29,000 MW Southeast 6,083 MW North 7,336 MW 26% West 7,817 MW 27% Texas 26% Baseload 3,801 MW 13% Peaking 6,852 MW 24% Intermediate 18,016 MW 63% 21% 7,433 MW 1 Note: Projects Under Advanced Development include Russell City Energy Center and upgrade at existing Los Esteros Critical Energy Facility. Colorado assets to be sold in December 2010. Based on estimated generation for 2009. |
![]() 4 6,000 8,000 10,000 CPN DYN RRI NRG MIR 12,000 4 Source: Energy Velocity (2009). Source: Energy Velocity (2009). Clean Modern Source: 2009 SEC filings. Efficient Source: Energy Velocity (2009). Not adjusted for steam, and excluding non-fossil fuel generation. Scale Unique Independent Power Producer Note: CPN figures (excluding steam-adjusted heat rate) have been adjusted to include estimated impacts from Conectiv Energy. DYN figures have been adjusted to remove estimated impacts of plants sold to LS Power during 2009. - 10 20 30 40 50 CPN DYN RRI NRG MIR - 20,000 40,000 60,000 80,000 100,000 CPN NRG DYN RRI MIR - 500 1,000 1,500 2,000 2,500 CPN NRG DYN MIR RRI 14,000 Calpine is the nation’s largest baseload renewable, natural gas and cogeneration power provider Our steam-adjusted heat rate is 7,263 |
![]() 5 Progress Over the Past Two Years 5 Costs Operations New Calpine Old Calpine Regional Focus Commercial Balance Sheet Strategic Focus Investor Transparency Premier Operating Company • Outstanding safety performance • 92% fleet-wide availability in 2009 3 Scale Regions: West, Texas & North • Conectiv acquisition • Colorado sale Strong Operating Cost Performance • Savings of over $100 million vs 2008 Opportunistically Termed Out ~$4B of Debt Focus on Free Cash Flow Customer Focused Maintained Clean Profile: Natural Gas & Geothermal Avoided large scale renewables Improved Disclosures Clarity around Calpine story Technically Capable Main Focus the West & Texas; Scattered Southeast Not Focused • No central procurement • Multiple offices Significant Maturity Towers • ~$7B of Debt in ’11 and ’14 1 Trading Focused Potential Coal Merger Discussions Little Contact with the Street 1 As presented on our 3Q08 Earnings Presentation. |
![]() 6 $- $200 $400 $600 $800 $1,000 Past Current Plant Operating Expense SG&A - 350,000 700,000 1,050,000 1,400,000 1,750,000 July/Aug 2010 July/Aug 2009 Peakers 6 Snap-Shots of 2010 Performance 6 Weather Drove Performance Source: MDA Earthsat. April 1- Sept. 12 Average Temperature. Generation April-August 2009 vs 2010. CCGT Conectiv Beating Expectations Costs Focus Delivering Impact $106 million • SDG&E at The Geysers • PG&E at The Geysers, Peakers, Los Esteros, & Delta • LADWP extension of wind firming contract • SPS at Oneta • BPA wind flexibility at Hermiston • SCE at Pastoria • TVA at Decatur • AEP at Oneta • Entergy at Carville Customer Focused Origination Helping Protect the Top Line 1 1 Annualized first half of year. Includes Colorado plants, but excludes Conectiv. 1 North Generation 135% Texas Generation Flat Southeast Generation 7% West Generation 11% Geothermal Generation 2% |
![]() 7 139 GW 317 GW 0.00 10.00 20.00 30.00 40.00 50.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Real Secular Shifts Underway Shale Gas = Shrinking Coal Margins Activist EPA = Massive Investment Required + Total U.S. Coal U.S. Coal without SO2 Controls At ~$420/kW for New Scrubbers = ~$58B Retrofit Spend Challenges for Coal & Renewables = Benefits to Gas Generation Views of Potential Retirements: • Wood Mack- 60GW • PIRA- 40GW • Bernstein- 65GW • Barclays- 38GW • Credit Suisse- 60GW • BofA ML- 40GW Sources: Energy Velocity, EPRI, Wood Mackenzie, PIRA, Bernstein, Barclays, Credit Suisse, and Bank of America Merrill Lynch. U.S. Coal to be Retrofitted 38-65 GW Potential Coal Retirements 74-101 GW Source: Energy Velocity. Reflects CAPP coal and PJM West on-peak power prices, $15 per ton transport, 10 heat rate, and $4 VOM. Forward prices as of 9/20/10. |
![]() 8 Gas-Fired Generation: A Solution for Tomorrow, Today Otay Mesa Energy Center Nuclear Plant Wind Farm Cost ($/KW) ~$950 $3,000 - $4,500 $1,900 - $2,200 $4,500 - $6,000 Construction Period 1 29 mos. 60 – 84 mos. 12 – 18 mos. 30 – 42 mos. Land Usage 1/20 th acre / MW Up to 2 acres / MW Up to 83 acres / MW Up to 10 acres / MW Water usage 2 ~15 gal/ MWh Up to 750 gal / MWh Negligible Up to 800 gal / MWh Subsidies Required 3 None Largest Large Larger In a world of scarce natural and financial resources, gas-fired generation offers a path to a cleaner footprint with lower capital requirements 8 Solar Field (CSP) Sources: EIA, E3, AWEA, DOE, CEC, Calpine, Public data. Does not include permitting period. Otay Mesa features air cooled system. Nuclear usage assumes recirculating cooling system. Assuming mid-level natural gas price. 1 2 3 |
![]() 9 Current Public Policy & Commodity Price Impact on Generation Attractiveness Renewables Natural Gas Generation Calpine’s View of the World Real Life Impacts: • Driving competitor M&A activity towards gas • State commissions’ rejection of renewable projects • Massive slow down of new renewable projects • Coal retirement announcements Natural Resource Clean + Heavy Government Support Focus on Cost of Service Only Gas as Scarce Resource Abundant Shale Gas Clean + Cost of Service Existing Baseload New Nuclear New Coal Current state of world will lead to expansion of value of existing Calpine fleet 9 |
![]() 10 10 10 Focusing on the Growth of Calpine Fleet • CPUC approval July 29 th • Scheduled mobilization for early 2011 • Summer 2013 COD Los Esteros Critical Energy Facility Russell City Energy Center • CPUC approved contract amendment • Executed EPC agreement • Expect to mobilize in 4Q 2010 • Summer 2013 COD • Project is ~80% complete; on-time & on budget • “First fire” as soon as next month • Summer 2011 COD York Energy Center (Delta) Turbine Upgrades North Geysers Expansion • 11 out of 13 scheduled wells have successfully been completed • Steam potential for 40-80 MWs • Potential new unit(s): Summer 2013 COD Green: Upgrades Orange: Construction Blue: Advanced Development Red: Early Development 1 IHR = Incremental Heat Rate in MMBtu/MWh. PJM Projects (Early Stage) • Sites identified • Transmission planning underway • Permit(s) under preparation 10 • 501F: ~15 MWs & ~4.8 IHR o 4 Completed o 3 To go in 2010 & 2011 • 7FA: ~10MW & sub-5.00 IHR 1 o Several starting late 2010 – 2011/2012 2010 – 2011 Growth Projects 1 |
![]() 11 11 Stabilize balance sheet • Simplify and optimize capital structure • Improve credit metrics • Opportunistically access credit markets Our Vision Three scale regions Expand baseload presence / Organic growth Leader in environmental responsibility Premier operating company • Capture embedded opportunities at existing sites • Disciplined M&A (i.e. Conectiv) • New builds with contracts • Enhance strong presence in West, Texas, and Northeast • Be opportunistic, but financially disciplined • Buy vs. build economics • Be recognized for top tier operations performance - Safety - Availability - Cost • Meet or exceed plant-level business plans • Utilize modern fleet to deliver lower-carbon energy solution • Ensure seat at the table for environmental regulations • Leverage geothermal expertise Customer-oriented origination business • Optimize commercial value of existing assets • Cultivate customer-led growth |
![]() 12 12 APPENDIX |
![]() 13 13 13 13 1 Generation has been adjusted to include net interest in generation from deconsolidated projects in all periods. Selected Operating Statistics 2Q10 2Q09 2Q10 2Q09 Total MWh Generated (in thousands) 1 20,737 19,940 Average Capacity Factor, excl. Peakers 42.5% 42.3% West 6,294 6,724 West 40.2% 46.0% Texas 8,567 7,922 Texas 52.4% 48.7% Southeast 4,222 3,957 Southeast 35.3% 34.8% North 1,654 1,337 North 31.3% 26.3% Average Availability 87.7% 90.6% Steam Adjusted Heat Rate (Btu/KWh) 7,306 7,274 West 88.4% 90.7% West 7,359 7,458 Texas 88.4% 90.7% Texas 7,222 7,132 Southeast 87.1% 87.7% Southeast 7,319 7,241 North 85.4% 96.0% North 7,648 7,687 YTD10 YTD09 YTD10 YTD09 Total MWh Generated (in thousands) 1 42,518 40,030 Average Capacity Factor, excl. Peakers 44.3% 42.3% West 16,463 15,661 West 54.2% 54.9% Texas 15,634 13,503 Texas 47.8% 41.3% Southeast 7,647 7,836 Southeast 32.8% 34.7% North 2,774 3,031 North 28.8% 28.6% Average Availability 89.0% 90.6% Steam Adjusted Heat Rate (Btu/KWh) 7,266 7,239 West 90.8% 89.9% West 7,298 7,340 Texas 85.5% 89.5% Texas 7,169 7,086 Southeast 91.4% 90.9% Southeast 7,305 7,235 North 88.9% 94.0% North 7,613 7,658 |
![]() 14 14 14 14 Calpine Operating Power Plants – As of July 30, 2010 Technology Load Type Location COD With Peaking Capacity CPN Interest With Peaking Capacity, Net West Region Agnews Power Plant* Natural Gas Intermediate CA 1990 28 100% 28 Blue Spruce Energy Center Natural Gas Peaking CO 2003 310 100% 310 Creed Energy Center Natural Gas Peaking CA 2003 47 100% 47 Delta Energy Center Natural Gas Intermediate CA 2002 857 100% 857 Feather River Energy Center Natural Gas Peaking CA 2002 47 100% 47 Geysers (15 plants) Geothermal Baseload CA 1971 - 1989 725 100% 725 Gilroy Cogeneration Plant* Natural Gas Intermediate CA 1988 128 100% 128 Gilroy Energy Center Natural Gas Peaking CA 2002 141 100% 141 Goose Haven Energy Center Natural Gas Peaking CA 2003 47 100% 47 Greenleaf 1 Power Plant* Natural Gas Intermediate CA 1989 50 100% 50 Greenleaf 2 Power Plant* Natural Gas Intermediate CA 1989 49 100% 49 Hermiston Power Project Natural Gas Intermediate OR 2002 616 100% 616 King City Cogeneration Plant* Natural Gas Intermediate CA 1989 120 100% 120 King City Peaking Energy Center Natural Gas Peaking CA 2002 44 100% 44 Lambie Energy Center Natural Gas Peaking CA 2003 47 100% 47 Los Esteros Critical Energy Facility Natural Gas Peaking CA 2003 188 100% 188 Los Medanos Energy Center* Natural Gas Intermediate CA 2001 560 100% 560 Metcalf Energy Center Natural Gas Intermediate CA 2005 605 100% 605 Otay Mesa Energy Center Natural Gas Intermediate CA 2009 608 100% 608 Pastoria Energy Center Natural Gas Intermediate CA 2005 729 100% 729 Riverview Energy Center Natural Gas Peaking CA 2003 47 100% 47 Rocky Mountain Energy Center Natural Gas Intermediate CO 2004 621 100% 621 South Point Energy Center Natural Gas Intermediate AZ 2001 530 100% 530 Sutter Energy Center Natural Gas Intermediate CA 2001 578 100% 578 Wolfskill Energy Center Natural Gas Peaking CA 2003 48 100% 48 Yuba City Energy Center Natural Gas Peaking CA 2002 47 100% 47 Total - West Region 7,817 Texas Region Baytown Energy Center* Natural Gas Intermediate TX 2002 800 100% 800 Brazos Valley Power Plant Natural Gas Intermediate TX 2003 594 100% 594 Channel Energy Center* Natural Gas Intermediate TX 2001 608 100% 608 Clear Lake Power Plant* Natural Gas Intermediate TX 1985 400 100% 400 Corpus Christi Energy Center* Natural Gas Intermediate TX 2002 500 100% 500 Deer Park Energy Center* Natural Gas Intermediate TX 2003 1,001 100% 1,001 Freeport Energy Center* Natural Gas Intermediate TX 2007 236 100% 236 Freestone Energy Center Natural Gas Intermediate TX 2002 994 100% 994 Hidalgo Energy Center Natural Gas Intermediate TX 2000 476 79% 374 Magic Valley Generation Station Natural Gas Intermediate TX 2002 692 100% 692 Pasadena Power Plant* Natural Gas Intermediate TX 1998 781 100% 781 Texas City Power Plant* Natural Gas Intermediate TX 1987 453 100% 453 Total - Texas Region 7,433 |
![]() 15 15 15 15 Calpine Operating Power Plants (cont’d) – As of July 30, 2010 Technology Load Type Location COD With Peaking Capacity CPN Interest With Peaking Capacity, Net North Region Bayview Oil Peaking VA 1963 12 100% 12 Bethlehem Natural Gas / Oil Intermediate PA 2003 1,130 100% 1,130 Bethpage Energy Center 3 Natural Gas Intermediate NY 2005 80 100% 80 Bethpage Peaker Natural Gas Peaking NY 2002 48 100% 48 Bethpage Power Plant Natural Gas Intermediate NY 1989 56 100% 56 Conectiv Peakers** Natural Gas / Oil Peaking NJ/DE/MD/VA 1964-1991 569 100% 569 Cumberland Natural Gas / Oil Peaking NJ 1990/2009 191 100% 191 Deepwater Natural Gas / Oil Peaking NJ 1954/1958 158 100% 158 Edge Moor Natural Gas / Oil Peaking DE 1973 725 100% 725 Greenfield Energy Centre Natural Gas Intermediate Ontario, CA 2008 1,038 50% 519 Hay Road Natural Gas / Oil Intermediate DE 1989 1,130 100% 1,130 Kennedy Int'l Airport Power Plant* Natural Gas Intermediate NY 1995 121 100% 121 Mankato Power Plant Natural Gas Intermediate MN 2006 375 100% 375 Riverside Energy Center Natural Gas Intermediate WI 2004 603 100% 603 �� RockGen Energy Center Natural Gas Peaking WI 2001 503 100% 503 Stony Brook Power Plant* Natural Gas Intermediate NY 1995 47 100% 47 Vineland Solar Solar Peaking NJ 2009 4 100% 4 Westbrook Energy Center Natural Gas Intermediate ME 2001 537 100% 537 Whitby Cogen* Natural Gas Intermediate Ontario, CA 1998 50 50% 25 Zion Energy Center Natural Gas Peaking IL 2002 503 100% 503 Total - North Region 7,336 Southeast Region Auburndale Peaking Energy Center Natural Gas Peaking FL 2002 117 100% 117 Broad River Energy Center Natural Gas Peaking SC 2000 847 100% 847 Carville Energy Center* Natural Gas Intermediate LA 2003 501 100% 501 Columbia Energy Center* Natural Gas Intermediate SC 2004 606 100% 606 Decatur Energy Center Natural Gas Intermediate AL 2002 795 100% 795 Hog Bayou Energy Center Natural Gas Intermediate AL 2001 237 100% 237 Morgan Energy Center* Natural Gas Intermediate AL 2003 807 100% 807 Oneta Energy Center Natural Gas Intermediate OK 2002 1,134 100% 1,134 Osprey Energy Center Natural Gas Intermediate FL 2004 599 100% 599 Pine Bluff Energy Center* Natural Gas Intermediate AR 2001 215 100% 215 Santa Rosa Energy Center Natural Gas Intermediate FL 2003 225 100% 225 Total - Southeast Region 6,083 TOTAL - CALPINE 28,669 * Indicates cogeneration plant ** Includes: Carll's Corner, Cedar, Christiana, Delaware City, Mickleton, Middle, Missouri Avenue, Sherman Avenue, Tasley, and West |
![]() |