Our 'B+' rating on the largest U.S. independent power producer, Calpine Corp., reflects a "fair" business risk profile based on a diversified portfolio of competitive electric generation plants that have significant revenue exposure to volatile natural gas prices, combined with a "highly leveraged" financial risk profile that is partially offset by favorable liquidity. Calpine and its subsidiaries service debt mainly by selling energy, capacity, and related services from nearly 28,000 megawatts (MW) of power plants fueled mostly by natural gas and also from geothermal sources. The outlook on the rating is stable. Calpine has reported higher-than-historic capacity factors for its gas-fired plants in light of low natural gas prices that result in coal-to-gas switching of generation capacity in most markets,
