Calpine’s Chapter 11 trip began with big expansion

SAN FRANCISCO — Calpine Corp.’s convoluted descent into bankruptcy, culminating in a Chapter 11 filing late Tuesday night, began when the future still looked bright for the power merchant.

Emboldened by its rapidly rising profits and stock price in 2001, Calpine launched a debt-laden expansion aimed at capitalizing on an apparent power shortage that had turned electricity into a high-priced commodity.
The San Jose-based company doubled in size, leaving it with 3,300 employees and 92 power plants in 21 states and Canada with enough capacity to provide electricity to 28 million homes.

But market conditions have shifted radically during the past four years amid plunging prices for electricity and climbing costs for natural gas — the fuel that Calpine relies upon to run most of its environment-friendly power plants.

AP