Calpine Corp.

Calpine has two retail businesses: Energy Solutions and Champion, with loads of about 35 terawatt-hours (TWh) and 25 TWh, respectively. Sales through Energy Solutions are to large C&I customers on a block and indexed basis. The hedges typically sit on the customer's account, and volumetric risk is the counterparty's responsibility. On the other hand, Calpine's Champion retail unit, which the company purchased in 2015, gives Calpine a presence in residential and some commercial markets in several states. All of Champion's volumes are on a load-shaped basis, with only about 5 TWh sold to residential customers. Thus, Calpine has exposure to about 20 TWh of C&I load-shaped risk, where we expect volume degradation. We anticipate Calpine's EBITDA will decline about $100

...The COVID-19 pandemic's impact on Calpine Corp. was relatively muted through June. We expect some credit weakening as Calpine experiences the full onslaught of a slower commercial and industrial (C&I) segment in the second half of the year. Yet, we believe volume degradation is muted. Calpine has two retail businesses: Energy Solutions and Champion, with loads of about 35 terawatt-hours (TWh) and 25 TWh, respectively. Sales through Energy Solutions are to large C&I customers on a block and indexed basis. The hedges typically sit on the customer's account, and volumetric risk is the counterparty's responsibility. On the other hand, Calpine's Champion retail unit, which the company purchased in 2015, gives Calpine a presence in residential and some commercial markets in several states. All of Champion's volumes are on a load-shaped basis, with only about 5 TWh sold to residential customers. Thus, Calpine has exposure to about 20 TWh of C&I load-shaped risk, where we expect volume degradation....

Full Report