Calpine Announces 1995 Second Quarter and First-Half Earnings.

SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 14, 1995--Calpine Corporation, the San Jose, CA-based power company, today reported revenue was $28.3 million and $50.4 million for the three months and six months ended June 30, 1995, compared with $22.9 million and $42.8 million for the same periods in 1994.

The increases in revenue are primarily due to additional electricity and steam sales generated from Calpine Thermal Power geothermal steam fields, which the Company acquired in September 1994, and the recently acquired Greenleaf gas-fired power facilities. Revenue for the second quarter 1995 was affected by curtailments of purchases by Pacific Gas and Electric Company during this period. PG&E curtailments were the result of an abundance of low-cost hydroelectric power in 1995 and very low gas prices. PG&E did not curtail energy purchases for the Company's operations during 1994. Net income for the quarter was $239,000 and $298,000 for the three and six months ended June 30, 1995, compared with $2.4 million and $3.3 million in 1994, reflecting curtailment of the Company's power facilities.

Commenting on the power company's second quarter results, Peter Cartwright, president and CEO, stated, "While Calpine's Geysers operations experienced maximum curtailment during the second quarter, we continued to increase our gas-fired operations, announced our first international venture and launched a new power marketing division, Calpine Power Marketing. As the U.S. continues to move toward an open market, power marketing will become an integral part of our operations."

Since the beginning of 1995, Calpine has significantly expanded its power portfolio, purchasing two 49.5 mw gas-fired facilities in Yuba City, CA in April and a 28.5 mw operating lease for a gas-fired plant in Watsonville, CA in June. These gas-fired facilities sell electricity to PG&E under 20-to-30 year power sales agreements. In July, the Company entered into a purchase agreement to acquire the assets and businesses of Chapter 11 debtor, O'Brien Environmental Energy, for approximately $107 million in cash and roughly $90 million in debt. O'Brien, based in Philadelphia, is a diversified energy company whose assets are largely in New Jersey and Pennsylvania. Subject to bankruptcy court approval, Calpine will acquire approximately 200 mw of operating assets and another 150 mw of capacity under development.

In recent developments, the Company entered into an energy development agreement with Phillips Petroleum Company in August 1995. Calpine will have the exclusive right to develop, construct, own and operate a 220 mw gas-fired cogeneration facility. The proposed project, subject to final agreements and approvals, will provide all of the steam and electrical power requirements of the Phillips Houston Chemical Complex for 20 years. Calpine will market excess capacity to other Texas customers through Calpine Power Marketing.

On the international front, Calpine is working with Grupo EPN and Mexico's Comision Federal de Electricidad to expand and improve the production of steam at the Cerro Prieto geothermal resource in Baja California, Mexico.

Calpine Corporation develops, owns and operates natural gas-fired and geothermal power generation facilities and markets power throughout North America. Its portfolio includes investments in more than 1,100 mw of power facilities in the U.S. -0-

                Calpine Corporation and Subsidiaries
            Condensed Consolidated Statements of Operations
               (In thousands, except per share amounts)
                            (Unaudited)

                                Three Months Ended    Six Months Ended
                                    June 30,             June 30,
                                 1995      1994      1995       1994

Revenue:
Electricity and steam sales    $27,911   $22,469    $49,014  $41,254
Service contract revenue
 from related parties            1,606     1,732      3,129    3,373
Income (loss) from
 unconsolidated investments in
 power projects                 (1,175)   (1,325)    (1,791)  (1,783)
                               -------   -------    -------  -------
   Total revenue                28,342    22,876     50,352   42,844

Cost of revenue:
Plant operating expenses,
 depreciation and production
 royalties                      15,932     9,624     28,213   20,348
Service contract expenses and
 other                           1,294     1,361      2,405    2,676
                               -------   -------    -------  -------
    Total cost of revenue       17,226    10,985     30,618   23,024

Gross profit                    11,116    11,891     19,734   19,820

Project development expenses       807       904      1,308    1,232
General and administrative
 expenses                        2,114     1,441      3,659    2,721
                               -------   -------    -------  -------
   Income from operations        8,195     9,546     14,767   15,867

Other (income) expense:
Interest expense                 8,185     5,821     15,116   10,902
Other income, net                 (396)     (450)      (855)    (688)
                               -------   -------    -------  -------
   Income before provision for
    income taxes                   406     4,175        506    5,653
Provision for income taxes         167     1,753        208    2,374

Net income                     $   239   $ 2,422    $   298  $ 3,279
                               =======   =======    =======  =======
Weighted average shares
 outstanding                     2,190     2,175      2,190    2,175
                               =======    ======    =======   ======

Earnings per share             $  0.11   $  1.11    $  0.14  $  1.51
                               =======   =======    =======  =======

Depreciation and amortization  $ 4,443   $ 4,240    $ 9,882  $ 9,204
EBIDTA                         $12,968   $10,445    $25,447  $22,804-0-

CONTACT: Calpine Corporation, San Jose

Katherine Potter, 408/995-5115