Calpine's owners, Energy Capital Partners, Access Industries and CPP Investments, are considering options such as a sale, an initial public offering (IPO) or divesting a stake in the company.

These equity companies took Calpine private in 2018 in a deal worth $17bn. The current valuation includes the company's debt.

The potential sale discussions are timely as Calpine's key markets, such as the state of Texas where it operates 12 power plants, experience increased electricity demand.

This surge is driven by the growing needs of data centres, artificial intelligence and extreme weather events attributed to climate change.

The company's investors are in preliminary talks with banks about their exit options, with a transaction likely to occur late in 2024 or early in 2025.

Details came from sources requesting anonymity due to the private nature of the discussions.

Calpine, ECP, CPP and Access have not commented publicly.

An acquisition of Calpine would represent the largest deal in the US power sector since the $45bn leveraged buyout of TXU Corp in 2007.

Should Calpine opt for an IPO, it could become one of the largest public offerings in the history of US power companies.

Independent power producer

It sells electricity at market rates, which can lead to higher profits when demand spikes.

But this subjects the company to greater market risks compared to regulated utilities with guaranteed customer bases.

In early May 2024 CPP Investments and Global Infrastructure Partners agreed to purchase American energy company ALLETE for $6.2bn, including debt assumption.

In March KKR agreed to acquire a majority stake in Avantus, a US developer of utility-scale solar and solar-plus-storage projects.