Calpine Acquires 50% Interest in 600-Megawatt Natural Gas-Fired Energy Center Under Construction in Missouri.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 14, 2000

Calpine Corp. (NYSE:CPN) -- the nation's fastest growing independent power company

-- announced today it has acquired a 50 percent interest in the Aries Power Plant, a 600-megawatt natural gas-fired energy center currently under construction near Pleasant Hill, Mo. from Merchant Energy Partners, a subsidiary of Kansas City-based Aquila Energy Corp.

With the Aries facility, Calpine has 10 modern, natural gas-fired energy centers under construction in six states, with net ownership of 4,376 megawatts.

Construction started on the $280 million Aries facility in October 1999. Commercial operations of the first 330 megawatts will begin in June 2001, with full production starting in January 2002. The majority of the facility's output will be sold to Missouri Public Service from June 2002 to May 31, 2005. Thereafter, power will be sold into the attractive Southwest Power Pool (SPP), and into other energy markets.

"This marks Calpine's entry into the Southwest Power Pool, a strategically important market," said Calpine vice president Daniel Allard. "Aquila Energy and Calpine together bring expertise to make this project particularly attractive to both companies -- and the communities and markets we serve."

The SPP region covers the southern Great Plains, including Kansas, Oklahoma, western Missouri and small portions of Texas, Arkansas, New Mexico and Louisiana. Coal is the largest fuel source for electric generation in SPP followed by gas and nuclear energy.

Black and Veatch of Kansas City, Mo. is building the Aries facility on a 67-acre site located approximately 18 miles southeast of Kansas City in Cass County, Mo. Calpine is providing construction management services, and will operate and maintain the facility.

To ensure the project meets the highest fuel-efficiency and environmental standards, Calpine and Aquila will incorporate the latest in combined-cycle gas turbine technology and will install advanced pollution-control equipment at the plant to minimize emissions. In addition to the high air-quality standards set by this facility, it will also be a zero water discharge facility, meaning no effluent wastewater will be discharged from the plant.

"Natural gas-fired combined cycle technology is highly efficient compared with today's aging coal and gas-fired power fleet -- and provides tremendous opportunities to lower energy prices while protecting the environment," added Allard.

Based in San Jose, Calpine Corp. is a leading independent power company dedicated to providing customers with reliable and competitively priced electricity. Calpine currently has interests in approximately 12,800 megawatts of capacity in operation, under construction or in announced development in 16 states -- enough energy to power nearly 13 million households.

The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information about Calpine, please visit its website at www.calpine.com.

This news release discusses certain matters that may be considered "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the intent, belief or current expectations of Calpine Corporation ("the Company") and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results such as, but not limited to, (i) changes in government regulations and anticipated deregulation of the electric energy industry; (ii) commercial operations of new plants that may be delayed or prevented because of various development and construction risks, such as a failure to obtain financing and the necessary permits to operate or the failure of third-party contractors to perform their contractual obligations (iii) cost estimates are preliminary and actual cost may be higher than estimated, (iv) the assurance that the Company will develop additional plants, (v) a competitor's development of a lower-cost generating gas-fired power plant or (vi) the risks associated with marketing and selling power from power plants in the newly competitive energy market. Prospective investors are also referred to the other risks identified from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission.