Calpine Acquires Walsh Power/Industrial; Power Company Establishes Sacramento, Calif. Construction Management Office To Support Expanding Power Operations.

SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 28, 1998--Calpine Corp. (NYSE:CPN), a leader in the development of state-of-the-art, natural gas-fired power plants, today announced it has acquired the Sacramento assets of Walsh Power/Industrial, the power plant construction division of Guy F. Atkinson Construction Corp.

Key to the transaction will be the establishment of a new Sacramento, Calif. project and construction management office to support Calpine's aggressive power plant development program. Calpine will hire the majority of the Sacramento-based personnel currently employed by Walsh.

"Calpine is pleased to have some of the finest construction professionals in the power industry joining us," stated Calpine Senior Vice President Lynn Kerby. "They will play an important role in advancing Calpine's natural gas-fired development program throughout the U.S."

Heading up the new project and construction management office will be Calpine's vice president of construction, Angelo Urbani. Urbani was responsible for the construction management of the company's 125-megawatt Sumas Power Plant in Washington and its 240-megawatt Pasadena Power Plant in Texas.

The company utilized its Calpine Construct program for both facilities, bringing each plant on-line under budget and ahead of schedule. Calpine Construct is a fully integrated development approach, which provides for construction management through the entire development process, including engineering, financing, construction, fueling, operations and marketing.

Calpine is currently developing two gas-fired facilities in northern California, totaling 1,300 megawatts. As recently announced, the company has partnered with San Francisco-based Bechtel Enterprises, to develop, own and operate over 2,000 megawatts of gas-fired power plants in northern California to primarily serve the San Francisco Bay Area. Calpine is also actively developing new power plants in Arizona, Maine, Massachusetts, Rhode Island and Texas.

Calpine Corp., one of the nation's fastest growing independent power companies, is dedicated to providing customers with low-cost electricity and thermal energy. Based in San Jose, Calif., Calpine currently has 5,500 net megawatts of capacity in operation, under construction or in development. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information, please visit Calpine's Web site 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 or expansions that may be delayed 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) the assurance that the Company will develop additional plants; (iv) a competitor's development of a lower-cost gas-fired generating power plant; or (v) 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.