Calpine Power Income Fund Announces Solid Financial Results For First Quarter Of 2005 And Cash Distributions For May, June And July 2005.

CALGARY, Alberta -- Calpine Power Income Fund (TSX:CF.UN) today announced its results for the three months ending March 31, 2005. Based upon current forecast, cash distributions for the months of May, June and July 2005 will be $0.0818 per trust unit.

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                Ex-Distribution        Distribution     Distribution
Record Date                Date                Date         per Unit
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May 31, 2005       May 27, 2005       June 20, 2005          $0.0818
June 30, 2005     June 28, 2005       July 20, 2005          $0.0818
July 29, 2005     July 27, 2005     August 19, 2005          $0.0818
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The above reflects distributions expected to be paid, however,
distributions are subject to change based upon actual conditions.
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"The performance of our facilities in the first quarter again contributed to strong results," said Toby Austin, President and Chief Executive Officer of Calpine Canada Power Ltd., manager of the Calpine Power Income Fund."All of the plants performed at or above anticipated availability levels, resulting in cash distributions in line with expectations.

We have experienced volatility in our unit price.The volatility was in part related to speculation on the financial position of our sponsor and major off-taker, Calpine Corporation.The Fund received all payments due from Calpine Corporation on time and in compliance with the various contracts.

We continue our focus on ensuring stable and sustainable distributions achieved through solid operations, growth in cash from existing facilities and improving the overall risk profile of our assets by assessing potential acquisitions for the Fund."

MANAGEMENT'S DISCUSSION AND ANALYSIS

The Calpine Power Income Fund (the "Fund") is an unincorporated  open-ended trust established under the laws of Alberta. The Fund indirectly owns interests in power generating facilities in British Columbia, Alberta and California and has an economic interest in a power plant in Ontario and holds a promissory note issued by Calpine Canada Power Ltd. ("the Manager"). The power generation facilities owned by the Fund and Calpine Power, L.P. (the "Partnership') are all modern and environmentally preferred, natural gas fired plants, with long-term energy sales agreements. The Fund and the Partnership are managed and administered by the Manager.

The Fund's objectives are to provide, on a per Trust Unit basis, a stable and sustainable flow of Distributable Cash of the Fund. To achieve these objectives, the Manager seeks to maximize the efficiency and profitability of the facilities and acquire or develop future facilities in accordance with established acquisition and investment guidelines. The Manager believes that Calpine Corporation's ("Calpine") extensive experience in all aspects of the development, acquisition and operation of power generation facilities will enable it to successfully implement the Fund's objectives.

The following discussion and analysis as provided by Management should be read in conjunction with the accompanying unaudited consolidated financial statements and the notes thereto of the Fund and the Partnership for the three months ended March 31, 2005 and 2004, which have been prepared in accordance with Canadian generally accepted accounting principles, and is based on information to May 9, 2005. The following discussion and analysis should also be read in conjunction with the audited consolidated financial statements and related management's discussion and analysis contained in the 2004 Annual Report, based on information to February 3, 2005. All dollar amounts are shown in Canadian dollars unless otherwise specified. Additional information concerning the Fund is available at www.calpinepif.com or on SEDAR at www.sedar.com.

FIRST QUARTER HIGHLIGHTS

- For the three months ended March 31, 2005 the Fund's power generation facilities continued to produce strong and reliable operating results as demonstrated below.

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                                Availability        Generation (MWh)
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                            Q1 2005    Q1 2004    Q1 2005    Q1 2004
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Calgary Energy Centre            97%        97%   118,619    208,415
Island Cogeneration Facility    100%        96%   522,855    436,500
Whitby Cogeneration Facility     95%        93%   102,825    110,636
King City Facility(1)            87%         -    221,188          -
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(1) Acquired May 19, 2004 - availability and generation factors are
    from date of acquisition only.

Other Achievements

- The Fund declared distributions of $0.2454 per Trust Unit to Unitholders during the first quarter of 2005 compared to $0.2370 per trust unit in the comparable period in 2004.

- Distributable Cash for the first quarter of 2005 increased 23% over the first quarter of 2004 to $15.2 million as a result of increased distributions from the Partnership as well as cash generated from the King City Transaction which closed in May 2004.

- The Fund added an additional $1.4 million to the levelized reserve in the first quarter of 2005 for a cumulative reserve of $11.2 million.

- Revenue from the Partnership increased 8% largely from the increased capacity at the Island Facility.

- Operating and maintenance expenses of the Partnership for the first quarter of 2005 decreased $0.4 million or 9%.

At March 31, 2005 and May 9, 2005, the Fund had 61,742,288 Trust Units outstanding, all of which are widely held by public investors and trade on the Toronto Stock Exchange.

RESULTS OF OPERATIONS

Calpine Power Income Fund

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Selected First Quarter Information
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(in 000's, except
 for Trust Units       Three months     Three months    Three months
 and per Trust          ended March      ended March     ended March
 Unit amounts)             31, 2005         31, 2004     31, 2003 (1)
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Total Revenue              $ 20,817         $ 13,262         $ 4,299
Net Earnings                 15,897           12,392           3,861
Net Earnings Per
 Trust Unit                  0.2575           0.2383          0.0742

Weighted Average
 Number of Trust
 Units Outstanding       61,742,288       52,001,351      52,001,351

Total Assets                692,150          489,650         492,790
Total Long-term
 Liabilities                 90,238                _               _
Distributions Declared
 Per Trust Unit              0.2454           0.2370          0.2355
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(1) A special distribution of $0.0165 per Trust Unit was declared in
    January 2003, in respect of 2002.

The Fund reported net earnings of $15.9 million or $0.2575 per Trust Unit for the three months ended March 31, 2005 compared to net earnings of $12.4 million or $0.2383 per Trust Unit for the three months ended March 31, 2004. Net earnings for the three months ended March 31, 2005 have increased 28% from the same period last year in part from the income generated from the King City Facility, acquired in the second quarter of 2004, and, to a lesser extent, the increased earnings of the Partnership. Net earnings for the three months ended March 31, 2004 increased $8.5 million over the same period in 2003 primarily due to the Calgary Energy Centre commencing operations on March 31, 2003.

Through the lease of the King City Facility and associated land to Calpine King City, the Fund recorded finance and rental income of $4.7 million for the three months ended March 31, 2005. The King City Facility is leased to Calpine King City under a long term lease arrangement. The Fund recognizes finance income over the lease term that provides a constant rate of return on the net investment in the lease. Lease and land rental payments are payable, annually, in arrears on December 31. Lease payments are due in both US and Canadian dollars - the US dollar portion being sufficient to service principal and interest payable to the third party lender. The King City Facility generated 221,188 MWh for the three months ended March 31, 2005 and operated at 87% availability for the same period. The plant ran base load for the first quarter of 2005 other than 11 days in March where annual scheduled maintenance was completed. Overall net earnings of the plant for the first quarter of 2005 are as expected.

Interest and other income of $2.2 million in the first quarter 2005 includes $1.9 million of interest earned on the loan to the Manager made in conjunction with the acquisition of the King City Facility in 2004 and $0.2 million related to interest earned on the loan to the Partnership in connection with the Island Facility upgrade.

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Selected
First Quarter          Three months     Three months    Three months
Information             ended March      ended March     ended March
(in 000's)                 31, 2005         31, 2004        31, 2003
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Management and
 administrative
 expenses                    $  999           $  458          $  438
Interest on
 long-term debt               3,125                -               -
Interest                        196              136               -
Amortization                    311              276               -
Future Income Taxes             427                -               -
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Management and administrative expenses which consist primarily of salary, overhead and public reporting expenses were $1.0 million for the three months ended March 31, 2005 compared to $0.5 million for the same period last year. Included in the first quarter of 2005 management and administrative expense is $79 thousand of compensation expense related to trust units granted to Trustees during the period. In addition, $141 thousand of costs related to printing and mailing of the Annual Report and Information Circular were incurred in the first quarter. These expenses in 2004 were recorded in the second quarter. $76 thousand of the increase in management and administrative expense over the prior year is from expenses attributable to the King City Facility including accounting fees and officers' insurance. The Fund incurred $43 thousand for fees payable to the Manager to manage and administer the Fund, up from $41 thousand for the three months ended March 31, 2004.

The Fund was entitled to receive $1.0 million in the first quarter of 2005 as a special distribution on the Class A Priority Units. The special distribution is paid to the Fund from the Partnership and is equal to 100% of the Fund's management and administrative expenses other than the King City management and administrative expense and the fees paid to the Manager to manage and administrate the Fund. The special distribution is paid to the Fund before any amounts are paid on the Class B Subordinated Units. At the end of the first quarter 2005, $0.6 million was receivable by the Fund in respect of first quarter expenses. For the first quarter of 2004, the Fund received $3.2 million as a special distribution paid in respect of the first quarter of 2004 and amounts due in respect of 2003.

Interest on long term debt was $3.1 million for the three months ended March 31, 2005 and relates to interest accrued on the third-party loan made in conjunction with the acquisition of the King City Facility. This third-party loan, payable annually in US dollars, matures in 2019 and bears interest at a fixed interest rate of 12.8% per annum. In 2005, the US dollar lease receipts together with a portion of the funds from the King City restricted cash account will be used to service this loan and, as such, foreign exchange risk associated with satisfying future obligations under this US dollar loan is mitigated.

Interest expense of $0.2 million relates to interest on the outstanding balance of the CCT Credit Facility (the "Credit Facility"). The Fund used the Credit Facility in addition to funds from the Levelized Reserve account to make a $16.0 million loan to the Partnership, $12.0 million loaned in 2004 with the balance in January 2005, for financing of its capital upgrade to the Island Facility in 2004. The Fund repaid $4.0 million of the outstanding facility balance in the first quarter of 2005 with cash received on the Manager Loan, in excess of distribution needs, as well as monthly loan repayments from the Partnership. The average cost of borrowing in the quarter was 4.46%.

Amortization expenses attributable to the Credit Facility and the King City Loan were $311 thousand for the three months ended March 31, 2005. For the three months ended March 31, 2004, amortization of the Credit Facility was $276 thousand. The increase in the current quarter amortization is directly attributable to financing expenses incurred on the King City acquisition which are being amortized on a straight-line basis over the term of the third party debt.

The Fund recorded tax expense of $0.4 million on its income from the King City Facility for the three months ended March 31, 2005, which represents an effective tax rate of 40.75%. No cash taxes are expected to be paid this year due to US tax depreciation on the King City Facility in excess of income from operations.

Calpine Power, L.P.

Selected
First Quarter
Information               Three months   Three months   Three months
(in 000's, except for      ended March    ended March    ended March
 per Unit amounts)            31, 2005       31, 2004    31, 2003 (1)
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Total Revenue                 $ 29,739       $ 27,671       $ 10,541
Net Earnings                    19,657         17,768          6,165
 Net Earnings Per
  Class A Priority
  Unit                          0.2694         0.2550         0.0830
 Net Earnings Per
  Class B Subordinated
  Unit                          0.2535         0.2022         0.0830

Total Assets                   665,602        662,986        725,641

Total Long-term
 Liabilities                     2,419          2,229            969
Distributions Declared
 Per Class A Priority Unit      0.2584         0.2990         0.2362
 Per Class B Subordinated
  Unit                          0.2394         0.2370              _
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(1) 2003 includes results from the Island Facility only as the
    Calgary Energy Centre had not yet reached commercial operation.

Revenues for the three months ended March 31, 2005 were up $2.1 million from the same period in 2004. This increase was largely a result of the 20% increase in power generation at the Island Facility. The Island Facility operated at 100% availability for the first quarter of 2005. The increased power generation reflects the increased plant capacity following the upgrade in the second quarter of 2004. Revenue from the Calgary Facility was up slightly from the first quarter of 2004 reflecting the annual price adjustment in the Tolling Agreement.

Net earnings for the three months ended March 31, 2005 were $19.7 million, up $1.9 million from the same period in 2004. The 11% increase in net earnings is due in part to benefits associated with the Island Facility upgrade, increased plant availability and lower operating and maintenance expenses at both the Calgary and Island facilities offset by an increase in depreciation expense.

Interest earned through the participating loan (the "Whitby Loan") to a Calpine subsidiary and other cash balances remain largely unchanged - up $50 thousand from the first quarter 2004. During the three months ended March 31, 2005, the Partnership received $2.5 million from Calpine Canada Whitby Holdings Company ("CCWHC") that has been applied in full to the accrued interest receivable on the Whitby Loan. The amounts paid to CCWHC, a partner in the Whitby Cogeneration Facility, represented a distribution of the plant's 2004 earnings not previously distributed. Contractually, CCWHC is required to pay to the Partnership all amounts received from the Whitby Cogeneration Facility to be applied first to accrued interest and second to principal. Interest received in the first quarter of 2005 was up $1.8 million over the same period in 2004.

Foreign exchange gains of $22 thousand (March 31, 2004 - $126 thousand gain) consist primarily of net gains on US dollar denominated cash and US dollar transactions. The Partnership has a long-term service agreement ("LTSA") for the maintenance of the Calgary Energy Centre, payable in US dollars. To meet this obligation and to mitigate foreign exchange risk, the Partnership maintains funds in US dollars at the level necessary to meet the current year's US dollar cash needs.

Island Cogeneration Facility

The Island Facility is a 240 MW natural gas-fired combined cycle cogeneration plant located at Duncan Bay, near Campbell River, on Vancouver Island, British Columbia. The Island Facility operated at 100% availability and generated 522,855 MWh for the three months ended March 31, 2005 compared to 96% availability and 436,500 MWh for the same period in 2004. Power generation has increased 20% over the same quarter in 2004 largely due to the capital upgrade completed in the second quarter of 2004.

The Island Facility electricity generation revenue was $11.2 million for the three months ended March 31, 2005 compared to $9.3 million for the three months ended March 31, 2004. The increase of $1.6 million is attributable to the increased power generation at the plant and $1.3 million is attributable to the decrease in the heat rate penalty payable to BC Hydro which is charged against electricity revenues. This net increase was offset by a lower Alstom recovery of $1.0 million compared to the first quarter of 2004.

The decrease of $1.0 million related to the Alstom performance contract represents a 22% decline from the prior period in 2004 and reflects the improved operation of the plant in the first quarter of 2005. At March 31, 2005, the remaining amount due from Alstom under the terms of the Settlement Agreement was $32.7 million (March 31, 2004 - $37.8 million) which will be earned over the next five to seven years, based on the expected operations of the plant. In the event an amount remains owing under the Settlement Agreement the amount will be payable upon termination of the Maintenance Agreement, expected to be no later than April 2017. Performance of this obligation is secured by a letter of credit issued by a Canadian financial institution.

Steam sold to Norske Skog Canada Limited ("Norske Skog"), a global supplier of newsprint and magazine printing papers was largely unchanged from 2004 at $3.8 million. For the three months ended March 31, 2005, the Island Facility produced 502,577 GJ ( Q1 2004 - 558,934 GJ) of steam. While steam output was down from prior years, the increase in natural gas prices, a factor in computing the steam price, improved the steam price by 9% resulting in substantially the same revenue period over period.

Operating and maintenance expense attributable to the Island Facility was $2.3 million for the three months ended March 31, 2005 compared to $2.6 million for the same period in 2004. Operating expenses were lower this quarter at the Island Facility largely as a result of a decline in repair and maintenance expenses as the plant was operating at full capacity. Maintenance planned in the first quarter will be performed later in the year during off-peak operating periods. Certain operating and maintenance expenses are paid by the Manager and reimbursed by the Partnership, in accordance with applicable agreements. At March 31, 2005, there was $0.2 million (Q1 2004 - $0.3 million) due to the Manager from the Partnership in respect of such agreements.

Interest expense in the first quarter of 2005 totaled $165 thousand payable on the loan from the Fund used to finance the capital upgrade at the Island Facility. The loan bears interest at the Fund's cost of funds plus 10 basis points which averaged 4.56% for the first quarter of 2005. The loan increased to $16.0 million at the beginning of 2005 and then was reduced by $2.2 million through monthly principal repayments to March 31, 2005. Increased cash flow generated from the improved upgrade is committed to be used to service interest and principal on the loan. As the loan originated in May, 2004 no comparative amounts exist in the first quarter 2004.

Calgary Energy Centre

The Calgary Energy Centre is a natural gas-fired combined cycle plant located in Calgary, Alberta which commenced operations on March 31, 2003. The Calgary Energy Centre has a capacity of 300 MW, consisting of 250 MW of base capacity plus 50 MW of peaking capacity. The Calgary Energy Centre generated 118,619 MWh for the three months ended March 31, 2005, and operated at 97% availability for the period. For the three months ended March 31, 2004, the plant generated 208,415 MWh and operated at 97% availability.

Electricity generation revenues at the Calgary Energy Centre were $13.8 million for the three months ended March 31, 2005 compared to $13.7 million for the three months ended March 31, 2004. Revenue is earned through both a fixed and variable charge payable by Calpine Energy Services Canada Partnership ("CESCP"), a wholly-owned partnership of Calpine under the terms of the long-term Tolling Agreement, where the fixed charge component represents approximately 99% of total revenue and is a function of plant availability. For the first quarter of 2005, the tolling revenue earned continued to be above the power market price payable for same power generated. CESCP is entitled, under the contract, to dispatch the plant on and off allowing CESCP to focus on generating power when it is profitable to do so. The capacity factor of the plant in the first quarter of 2005, being a measure of the actual MWh's produced versus the total possible MWh's of production in a given time period, was 19% compared to 33% in the first quarter of 2004 due to continued low prices in the Alberta power market. This lower capacity factor impacts power generation during the period, but has no financial impact on the Fund as revenue is earned from the Tolling Agreement which is based on availability of the plant.

Annual operating and maintenance and depreciation expense attributable to the Calgary Energy Centre was $2.1 million and $2.3 million respectively for the three months ended March 31, 2005, compared to $2.1 million and $2.1 million respectively, for the same period in 2004. Certain operating and maintenance expenses are paid by the Manager and reimbursed by the Partnership, in accordance with applicable agreements. At March 31, 2004 there was $0.4 million (March 31, 2004 - $0.9 million) due to the Manager from the Partnership in respect of such agreements.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2005, the Fund had unrestricted cash and cash equivalents of $2.9 million, down $5.2 million from the end of 2004 but up from $74 thousand at March 31, 2004. $4.0 million of the cash on hand at the end of 2004 was used to complete the financing of the capital upgrade of the Island Facility. The Fund generated cash from operating activities of $12.8 million compared to $12.4 million for the first quarter of 2004.

Cash used in financing activities of the Fund for the quarter totaled $19.1 million including $15.1 million to fund distributions and $4.0 million loaned to the Partnership.

The Fund received $4.1 million in principal and interest payments in the three months ended March 31, 2005 from the Manager on the Manager Loan issued as part of the King City Transaction.

During the first quarter of 2005, the Fund repaid $4.0 million on the credit facility using principal repayments on the Partnership loan as well as cash received on the Manager Loan in excess of distribution requirements. At the end of the first quarter of 2005, the Fund had an additional undrawn credit amount of $26.0 million available to finance working capital. In addition, the Fund has the full $90.0 million acquisition facility available.

The Partnership had cash and cash equivalents of $23.8 million at March 31, 2005.

The Partnership generated cash from operations of $26.3 million for the three months ended March 31, 2005 compared to $31.8 million for the same period in 2004. The cash generated in 2004 was higher due to increased cash from non-cash working capital as the Partnership collected $8.4 million in receivable balances which related to the previous year. All amounts in 2005 are current. This decrease in non-cash working capital from 2004 was offset in part by the additional interest of $1.8 million paid in 2005 compared to 2004 on the Whitby Loan. The Partnership received $2.5 million (Q1 2004 - $750 thousand) from CCWHC in satisfaction of interest on the Whitby Loan.

Cash from financing activities of the Partnership included $4.0 million received in January 2005 to finance the balance of capital expenditures associated with the Island Facility upgrade net of $2.2 million repaid during the quarter as a result of increased cash flow from the Island Facility.

At March 31, 2005, an unsegregated cash reserve of $12.4 million (March 31, 2004 - $5.6 million) has been accumulated in the Partnership to partially fund future maintenance costs. The next major maintenance for the Island Facility is expected to occur in two years. The Calgary Energy Centre is scheduled to have its next inspection in October of this year.

The Partnership used $54 thousand for capital expenditures throughout the quarter.

Contractual Obligations

Both the Fund and Partnership will be required to remove generation facilities at the end of their useful lives and restore the plant sites to their original condition. The estimated future asset retirement obligation remains unchanged from 2004.

The Calgary Energy Centre and the Island Facility are each required to make payments for annual plant maintenance in accordance with applicable LTSA's. Amounts paid in accordance with these agreements for the three months ended March 31, 2005 were $269 thousand (Q1 2004 - $325 thousand) for the Calgary Energy Centre and $194 thousand (Q1 2004 - $204 thousand) for the Island Facility. Future commitments relating to the LTSA's have a significant variable portion that cannot be reasonably estimated. Currently the variable portion of the Island LTSA is offset with the Settlement Agreement with Alstom. As a result, the Island Facility will not be required to make significant cash payments relating to equivalent operating hour ("EOH") charges under the Island LTSA for approximately seven to eight years. Calgary's LTSA payments are due in US dollars and are payable at certain EOH hurdles.

The Fund has not entered into any off-balance sheet arrangements.

DISTRIBUTABLE CASH AND DISTRIBUTIONS

Distributable Cash is not a measure under Canadian generally accepted accounting principles and there is no standardized measure of Distributable Cash. Distributable Cash, as presented, may not be comparable to similar measures presented by other companies. Distributable cash has been presented to assist readers in determining possible future cash distributions. Distributable cash cannot be assured and may vary.

The amount of Distributable Cash of the Fund to be distributed monthly to Unitholders is, as defined in the Fund Trust Indenture, based generally on the amount by which the Fund's cash on hand exceeds: (i) administration expenses of the Fund; (ii) amounts required for the business and operations including fees payable to the Manager under the Administration and Management Agreements; and (iii) any cash reserve which the Board of Directors of the Manager in its discretion determines is necessary to satisfy the Fund's current and anticipated obligations.

Calpine Power Income Fund
(in 000's, except
 for Trust Units
 and per Trust                Three months ended  Three months ended
 Unit Amounts)                    March 31, 2005      March 31, 2004
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FUNDS FROM OPERATIONS
 BEFORE WORKING CAPITAL                 $  9,999            $ 15,593
Add (Deduct):
 Levelization reserve                     (1,534)                  -
 Financing costs                               -                 (71)
 Principal repayment on loan
  to Calpine Canada Power Ltd.             2,671                   -
 Working capital change                    4,016              (3,198)
                              ---------------------------------------

DISTRIBUTABLE CASH                      $ 15,152            $ 12,324
                              ---------------------------------------
                              ---------------------------------------
Weighted average number of
 Trust Units outstanding              61,742,288          52,001,351
                              ---------------------------------------
                              ---------------------------------------

Distributable Cash per
 Trust Unit                             $ 0.2454            $ 0.2370
                              ---------------------------------------
                              ---------------------------------------

Distributable Cash generated by the Fund totaled $15.2 million or $0.2454 per Trust Unit for the three months ended March 31, 2005 compared to $12.3 million or $0.2370 per unit in for the same period in 2004. $2.7 million of this increase is from the King City Transaction which closed in the second quarter of 2004 with the remaining increase attributable to increased cash distributions from the Partnership. The Fund pays monthly cash distributions to Unitholders on or about the 20th day of each month following the record date, which is the last business day of the preceding month.

The Fund, through its indirect 70% ownership of the Partnership, received $0.0798 of Distributable Cash per Class A Priority Unit per month (in addition to certain management and administrative expenses incurred directly by the Fund) for the three months ended March 31, 2005, up from $0.079 per month in 2004.

The working capital change of $4.0 million for 2005 includes $3.1 million of accrued interest payable on the third party King City loan. Interest is payable annually and will be serviced from the annual lease receipts which will not be recognized in cash from operations until paid. Lease payments are due annually on December 31.

In 2004, the Fund established a Distribution Levelization Reserve ("the Levelized Reserve"), the purpose of which is to levelize, over the long-term, the distributions paid by the Fund to Unitholders in respect of the King City acquisition, so as to enable the Fund to provide a level cash stream to the Unitholders. Total undistributed  cash at March 31, 2005 was $11.2 million. The CCT Trustees intend to annually increase or decrease this reserve with long-term consideration given to the expected cash from both the King City Facility and Manager Loan and future distribution requirements to Unitholders. Cash generated by the King City Transaction and other Fund investments is expected to exceed cash distributions anticipated to be paid on the Trust Units until 2014 and, as a result, the Levelized Reserve is expected to increase until that time.

Levelized Reserve
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Balance at December 31, 2004                                $  9,643
Contributions                                                  1,416
Income reinvested                                                118
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Balance at March 31, 2005                                   $ 11,177
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As at March 31, 2005, the Levelized Reserve has been used as follow:

                                                          Book Value
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Guaranteed investment certificates                          $  1,369
Loan to Calpine Power L.P.                                     9,808
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Balance at March 31, 2005                                   $ 11,177
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The following is a summary of recent and expected monthly
distribution and future key dates:

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Ex-distribution                          Distribution   Distribution
Date                    Record Date      Payment Date per Trust Unit
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January 27, 2005   January 31, 2005 February 18, 2005        $0.0818
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February 24, 2005 February 28, 2005    March 18, 2005        $0.0818
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March 29, 2005       March 31, 2005    April 20, 2005        $0.0818
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April 27, 2005       April 29, 2005      May 20, 2005        $0.0818
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May 27, 2005           May 31, 2005     June 20, 2005        $0.0818
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June 28, 2005         June 30, 2005     July 20, 2005        $0.0818
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July 27, 2005         July 29, 2005   August 19, 2005        $0.0818
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Calpine Power, L.P.

(in 000's, except for        Three months ended  Three months ended
 per Unit amounts)                March 31, 2005      March 31, 2004
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FUNDS FROM OPERATIONS BEFORE
 WORKING CAPITAL                        $ 25,087            $ 22,891
Add (Deduct):
 Capital expenditures                        (54)             (6,916)
 Maintenance reserve
  decrease (increase)                     (1,457)              3,799
 Loan receivable (payable)                 1,808                   -
 Working capital change                   (6,610)              1,054
                                -------------------------------------
DISTRIBUTABLE CASH                      $ 18,774            $ 20,828
                                -------------------------------------
                                -------------------------------------

Allocation of Distributable Cash
 Class A Priority Units                 $ 13,439            $ 15,546
 Class B Subordinated Units                5,335               5,282
                                -------------------------------------
                                        $ 18,774            $ 20,828
                                -------------------------------------
                                -------------------------------------
Per Unit allocation of
 Distributable Cash
 Class A Priority Units                 $ 0.2584            $ 0.2990
                                -------------------------------------
 Class B Subordinated Units             $ 0.2394            $ 0.2370
                                -------------------------------------
                                -------------------------------------

The amount of Distributable Cash, as defined in the Calpine Power, L.P. Partnership Agreement, is to be distributed monthly and is based generally on the amount by which the Partnership's cash on hand exceeds: (i) management and administration expenses of the Partnership; (ii) amounts required for the business and operations of the Partnership and its Facilities (including expenses payable to the Manager under the O&M Agreements); and (iii) any cash reserve which the Board of Directors of the Manager in its discretion has determined is necessary to satisfy the Partnership's current and anticipated obligations, including an annual reserve for the average estimated major maintenance expenditures. The Partnership distributes Distributable Cash of the Partnership in respect of each month to the partners of record on the last day of each month based on the priority rights of the partnership units. Payments are made on or about the 20th day after each record date.

The Partnership makes monthly cash distributions to both the Class A Priority Unitholders and Class B Subordinated Unitholders. The Fund, as the holder of Class A Priority Units in the Partnership, must be paid before the Manager receives distributions on its Class B Subordinated Units. In addition, the Partnership makes a special distribution to the Class A Priority Unitholders, before distributions are made on the Class B Subordinated Units, equivalent to the amount of certain general and administrative expense of the Fund. The Class B Subordinated Units represent a 30% economic interest in the Island Facility, the Calgary Energy Centre and the Whitby Loan and their entitlement to distributions is subordinated to that of Class A Priority Unitholders until 2022. The target distribution per Class A Priority Unit and Class B Subordinated Unit increases annually by 1%.

The Partnership has established a maintenance reserve, the purpose of which is to partially fund future maintenance costs. The annual increase/decrease in the maintenance reserve is deducted  from/added to cash available for distribution. During the three months ended March 31, 2005, $1.8 million (Q1 2004 - nil) was contributed to the reserve and $0.5 million (Q1 2004 - $3.8 million) was withdrawn to fund maintenance costs. The funds in the reserve are invested in liquid securities. Interest income of $57 thousand (Q1 2004 - $19 thousand) was earned on the maintenance reserve during the first quarter 2005.

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Balance at December 31, 2003                                $  9,288
Contributions                                                  6,476
Withdrawals                                                   (4,862)
Income reinvested                                                126
Foreign exchange loss on US dollars                             (104)
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Balance at December 31, 2004                                  10,924

Contributions                                                  1,834
Withdrawals                                                     (463)
Income reinvested                                                 57
Foreign exchange loss on US dollars                               29
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Balance at March 31, 2005                                   $ 12,381
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The Partnership declared a cash distribution of $5.9 million for the period from March 1 to March 31, 2005. The cash distribution was paid on April 20, 2005 to the Class A Priority and Class B Subordinated Unitholders of record on March 31, 2005. The Partnership also declared a cash distribution of $5.9 million for April 2005. This cash distribution will be paid on May 20, 2005 to Unitholders of record on April 29, 2005.

RESTRICTED CASH RESERVES

Calpine Power Income Fund

As part of the King City Transaction in 2004, the Fund deposited US$4.6 million of the funds received from the offering into a segregated account. This cash amount and related interest earned will be used to partially satisfy its obligations on the King City Loan. It is expected that US$3.9 million of this reserve will be used in December 2005 with the balance to be used in 2006.

TAX TREATMENT OF DISTRIBUTIONS

For Canadian tax purposes, the taxable amount of distributions to the Fund's Unitholders was 20% for 2004 up from 1.89% in 2003. The remaining amount of the distributions reduce the adjusted cost base of the Trust Units, thereby providing a tax deferral for the Unitholders. As a result, in 2004, 80% of the distributions to Unitholders were a return of capital rather than an allocation of income. The tax deferral arises primarily due to the ability of the Partnership to shelter its taxable income with capital cost allowance claims on the Facilities and is offset by the taxability of annual income generated on the King City Transaction which is taxed as earned with no available deferrals. The Manager anticipates that the taxable amount of distributions in 2005 will continue to be 20%. Thereafter it is anticipated that a higher proportion of cash distributions made by the Fund will be included in the income of the Unitholders for income tax purposes. Further, Fund acquisitions could serve to extend or reduce the tax-deferred horizon. The Fund recommends that Unitholders consult their tax advisors regarding the tax implications of their investment in Trust Units.

CRITICAL ACCOUNTING ESTIMATES

Preparation of both the Fund and Partnership's financial statements in conformity with Canadian generally accepted accounting principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses for the period then ended.

For the Fund, amounts recorded for finance income, depreciation and the provision for asset retirement obligations are based on estimates. With respect to the Partnership, amounts recorded for depreciation and the provision for asset retirement obligations are based on estimates. By their nature, these estimates are subject to measurement uncertainty and changes in these estimates may impact the consolidated financial statements of future periods.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2003, the CICA issued new Accounting Guideline AcG-15, Consolidation of Variable Interest Entities, effective for fiscal years and periods starting on or after November 1, 2004. AcG-15 presents indications on the application of consolidation principles to certain entities that are subject to control on a basis other than the ownership of voting interests. The Fund and Partnership have adopted this guideline and there was no impact to the financial statements.

FORECASTS

Forecasts of the Fund and the Partnership for the twelve months ending March 31, 2005 were prepared and included in the prospectus issued in respect of the public offering of Trust Units in connection with the acquisition of the King City Facility. The actual financial results of the Fund and the Partnership for the three months ended March 31, 2005 and from the closing of the transaction on May 19, 2004 through March 31, 2005 compare favorably to these forecasts, with the exception of future income taxes which exceed the forecasted amount by approximately $1.8 million. The additional future income tax expense is caused by unrealized foreign exchange gains on the net investment in lease, recorded in a US subsidiary of the Fund, which were not forecasted. These foreign exchange gains were eliminated upon translation of the US subsidiaries financial statements to Canadian dollars.

OUTLOOK

The Fund's main goal continues to be to provide stable and sustainable cash distributions to its Unitholders. Management expects this will be done by its ongoing commitment to operational excellence at its facilities, by enhancing operations to increase cash from operations and by reducing the overall risk profile of our assets by making accretive acquisitions of high quality assets.

The nature of the Fund's contracts insulate the Fund from commodity price risk while allowing the Fund to focus on reducing operating and maintenance expenses, the benefits of which we expect will increase net earnings and cash flow.

The Fund benefits from the Calgary Energy Centre Tolling Agreement and therefore does not have power or gas price market exposure in Alberta, where electricity prices continue to be quite low.

Capital expenditures for 2005 are expected to be approximately $0.6 million, which will be financed from cash flow from operations. The major maintenance reserve is expected to increase by a further $1.0 million in 2005.

Management expects to make cash distributions to our Unitholders of at least $0.818 per month per Trust Unit for the remainder of 2005 and anticipates to end the year with a strong balance sheet and cash reserves.

BUSINESS RISKS

The Fund continues to monitor its business risks including its exposure to contract non-performance. The Funds credit exposure, most notably in the collection of both the monthly toll received on the Calgary Energy Centre availability and the repayment of the Manager Loan from Calpine Corporation, is reviewed on an ongoing basis. Calpine Corporation's recent public statement confirmed it was in compliance with its corporate and project indentures and continued to move forward on its financial program focused on reducing corporate debt and enhancing liquidity. The Fund received all payments due from Calpine Corporation on time and in full. Additional information on risks may be found in the Management Discussion and Analysis in the 2004 annual report.

SUMMARY OF QUARTERLY RESULTS

Calpine Power Income Fund

---------------------------------------------------------------------
(unaudited)                     2005                  2004
(in 000's)                        Q1       Q4      Q3    Q2(1)     Q1
---------------------------------------------------------------------
 Equity earnings from
  Calpine Power, L.P.        $14,008  $13,292 $13,802 $ 5,378 $13,262
 Finance income.(2)            4,649    4,843   5,076   6,577       -
 Interest and other income     2,160    2,198   2,290   1,607       -
                             -------  -------------------------------
                              20,817   20,333  21,168  13,562  13,262
                             -------  -------------------------------

Expenses
 Initial lease cost                -        -       -   4,191       -
 Management and
  administrative                 999    1,620     661     357     458
 Interest on long-term debt    3,125    3,132   3,433   1,671       -
 Interest                        196      237     218     170     136
 Amortization                    311      311     311     311     276
 Accretion                        19       27      28      20       -
 Future income taxes             427    1,666   1,743     400       -
 Foreign exchange               (157)      20      53      11       -
                             -------  -------------------------------
                               4,920    7,013   6,447   7,131     870
                             -------  -------------------------------

Net earnings                 $15,897  $13,320 $14,721 $ 6,431 $12,392
                             -------  -------------------------------
                             -------  -------------------------------

Net earnings per
 Trust Unit                  $0.2575  $0.2157 $0.2384 $0.1138 $0.2383
                             -------  -------------------------------
                             -------  -------------------------------


---------------------------------------------------------------------
(unaudited)                                               2003(1)
(in 000's)                                         Q4      Q3      Q2
---------------------------------------------------------------------
 Equity earnings from Calpine Power, L.P.     $12,562 $11,312 $13,196
 Finance income.(2)                                 -       -       -
 Interest and other income                         15       6       -
                                              -----------------------
                                               12,577  11,318  13,196
                                              -----------------------

Expenses
 Initial lease cost                                 -       -       -
 Management and administrative                    529   1,153     338
 Interest on long-term debt                         -       -       -
 Interest                                         134               -
 Amortization                                     271               -
 Accretion                                          -       -       -
 Future income taxes                                -       -       -
 Foreign exchange                                   -       -       -
                                              -----------------------
                                                  934   1,153     338
                                              -----------------------

Net earnings                                  $11,643 $10,165 $12,858
                                              -----------------------
                                              -----------------------

Net earnings per Trust Unit                   $0.2239 $0.1995 $0.2472
                                              -----------------------
                                              -----------------------

(1) Operations for the three months ended June 30, 2004 include
    revenues and expenses as a result of the King City transaction,
    which closed in May 2004.
(2) Finance income is earned from the lease of the King City Facility
    to Calpine King City.



Calpine Power, L.P

(unaudited)                     2005                  2004
(in 000's)                        Q1       Q4      Q3      Q2      Q1
---------------------------------------------------------------------

Revenue
 Electricity and thermal     $28,775  $28,467 $27,827 $18,490 $26,757
 Interest - Whitby               837      846     855     846     846
 Interest - Other                127      143     129      72      68
                              29,739   29,456  28,811  19,408  27,671

Expenses
 Operating and maintenance     4,336    4,836   3,573   6,417   4,777
 Depreciation                  5,402    5,104   5,504   4,777   5,203
 Accretion                        50       46      47      47      46
 General and administrative      152      604      82      10       3
 Interest                        164      107      88      47       -
 Foreign Exchange                (22)     157     194    (209)   (126)
                              10,082   10,854   9,488  11,089   9,903

Net earnings                 $19,657  $18,602 $19,323 $ 8,319 $17,768
                             -------  -------------------------------
                             -------  -------------------------------

Net earnings per Unit
 Class A Priority Unit       $0.2694  $0.2556 $0.2654 $0.1034 $0.2550
 Class B Subordinated Unit   $0.2535  $0.2383 $0.2477 $0.1320 $0.2022



(unaudited)                                              2003
(in 000's)                                         Q4      Q3      Q2
---------------------------------------------------------------------

Revenue
 Electricity and thermal                      $26,564 $23,828 $27,078
 Interest - Whitby                                855     859     843
 Interest - Other                                  81     288     411
                                               27,500  24,975  28,332

Expenses
 Operating and maintenance                      4,597   3,587   3,881
 Depreciation                                   5,017   5,144   5,546
 Accretion                                         44      43      43
 General and administrative                        78      48      18
 Interest                                           -       -       -
 Foreign Exchange                                 184       -       -
                                                9,920   8,822   9,488

Net earnings                                  $17,580 $16,153 $18,844
                                              -----------------------
                                              -----------------------

Net earnings per Unit
 Class A Priority Unit                        $0.2415 $0.2174 $0.2537
 Class B Subordinated Unit                    $0.2254 $0.2174 $0.2537

FORWARD-LOOKING INFORMATION

Certain information in this Management's Discussion and Analysis is forward-looking and subject to risks and uncertainties. The results or events predicted in this information may differ from actual results or events. Factors which could cause actual results or events to differ materially from current expectations include, among other things, the ability of the Fund and the Partnership to successfully implement the Fund's strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability and price of energy commodities, regulatory decisions, competitive factors in the power industry, and the prevailing economic conditions in North America. The Fund and the Partnership each disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Calpine Power Income Fund is an unincorporated open-ended trust that invests in electrical power assets. The Fund indirectly owns interests in power generating facilities in British Columbia, Alberta and California. In addition, the Fund owns a participating loan interest in a power plant in Ontario and a promissory note issued by Calpine Canada Power Ltd. The Fund is managed by Calpine Canada Power Ltd., which is headquartered in Calgary, Alberta.

The Calpine Power Income Fund units are listed on the Toronto Stock Exchange under the symbol CF.UN. For further information on the Fund, please visit our website at www.calpinepif.com.

CALPINE POWER INCOME FUND
CONSOLIDATED BALANCE SHEETS
(thousands)

                                            As at              As at
                                   March 31, 2005  December 31, 2004
---------------------------------------------------------------------
                                       (unaudited)
ASSETS
Current Assets
 Cash and cash equivalents              $   2,919          $   8,138
 Restricted cash, current portion
  (Note 5)                                  4,547              4,490
 Distributions receivable                   4,730              3,890
 Accounts receivable                          428                566
 Loan to Calpine Canada Power Ltd.,
  current portion (Note 2)                  9,189              9,083
 Net investment in lease,
  current portion (Note 3)                  7,862              1,583
 Loan to Calpine Power, L.P. (Note 4)      13,801             11,993
 Prepaid expenses                             150                257
                                     --------------------------------
                                           43,626             40,000

Investment in Calpine Power, L.P.
 (Note 7)                                 477,218            476,649
Net investment in lease,
 less current portion (Note 3)            134,843            135,521
Loan to Calpine Canada Power Ltd.,
 less current portion (Note 2)             29,851             32,188
Restricted Cash, less current
 portion (Note 5)                           1,132              1,114
Land                                        1,870              1,870
Deferred financing costs                    3,610              3,922
                                     --------------------------------
                                        $ 692,150          $ 691,264
                                     --------------------------------
                                     --------------------------------

LIABILITIES AND UNITHOLDERS' EQUITY
Current Liabilities
 Distributions payable                  $   5,051          $   5,001
 Accounts payable and accrued
  liabilities                               4,564              1,959
 Long-term debt, current
  portion (Note 5)                         12,160             12,035
 Borrowing under Credit
  Facility (Note 6)                         4,000              8,000
                                     --------------------------------
                                           25,775             26,995
 Future income tax                          4,048              3,589
 Asset retirement liability                 1,330              1,298
 Long-term debt, less current
  portion (Note 5)                         84,860             83,990
                                     --------------------------------
                                          116,013            115,872
 Unitholders' equity                      576,137            575,392
                                     --------------------------------
                                        $ 692,150          $ 691,264
                                     --------------------------------
                                     --------------------------------

See accompanying notes to the consolidated financial statements


CALPINE POWER INCOME FUND
CONSOLIDATED STATEMENTS OF EARNINGS AND UNITHOLDERS' EQUITY
(thousands, except for Trust Units and per Trust Unit amounts)
(unaudited)

                                        Three months    Three Months
                                               ended           ended
                                      March 31, 2005  March 31, 2004
---------------------------------------------------------------------
REVENUES

 Equity earnings from Calpine
  Power, L.P.                               $ 14,008        $ 13,262
 Finance income (Note 3)                       4,649               _
 Interest and other income                     2,160               _
                                    ---------------------------------
                                              20,817          13,262
                                    ---------------------------------

EXPENSES

 Interest on long-term debt                    3,125               _
 Management and administrative                   999             458
 Amortization                                    311             276
 Interest                                        196             136
 Foreign exchange loss (gain)                   (157)              _
 Accretion                                        19               _
                                    ---------------------------------
                                               4,493             870
                                    ---------------------------------

EARNINGS BEFORE FUTURE INCOME TAXES           16,324          12,392
                                    ---------------------------------

 Future income taxes                             427               _
                                    ---------------------------------

NET EARNINGS                                  15,897          12,392

UNITHOLDERS' EQUITY,
 BEGINNING OF PERIOD                         575,392         485,001

Distributions                                (15,152)        (12,324)
                                    ---------------------------------

UNITHOLDERS' EQUITY, END OF PERIOD          $576,137        $485,069
                                    ---------------------------------
                                    ---------------------------------

Weighted average number of
 Trust Units outstanding                  61,742,288      52,001,351
                                    ---------------------------------
                                    ---------------------------------

Net earnings per Trust Unit                 $ 0.2575        $ 0.2383
                                    ---------------------------------
                                    ---------------------------------

See accompanying notes to the consolidated financial statements


CALPINE POWER INCOME FUND
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands)
(unaudited)

                                        Three months    Three Months
                                               ended           ended
                                      March 31, 2005  March 31, 2004
---------------------------------------------------------------------

OPERATING ACTIVITIES
 Net earnings                               $ 15,897        $ 12,392
 Adjustments for non-cash items:
  Equity earnings from
   Calpine Power, L.P.                       (14,008)        (13,262)
  Finance income                              (4,649)              _
  Amortization                                   311             276
  Amortization of discount on loan
   to Calpine Canada Power Ltd.                 (440)              _
  Accretion                                       19               _
  Foreign exchange loss (gain)                  (157)              _
  Future income tax                              427               _
 Distributions received from
  Calpine Power, L.P.                         12,599          16,187
                                    ---------------------------------
 Cash from operations before
  working capital changes                      9,999          15,593
 Change in non-cash working capital
  (Note 8)                                     2,850          (3,187)
                                    ---------------------------------
 Net cash provided by
  operating activities                        12,849          12,406
                                    ---------------------------------

INVESTING ACTIVITIES
 Receipt of principal on loan to
  Calpine Canada Power Ltd.                    2,671               _
 Loan to Calpine Power, L.P.                  (4,007)              _
 Receipt of principal on loan to
  Calpine Power, L.P.                          2,199               _
                                    ---------------------------------
 Net cash provided by investing
  activities                                     863               _
                                    ---------------------------------

FINANCING ACTIVITIES
 Financing costs                                   _             (71)
 Repayment on credit facility                 (4,000)              _
 Distributions paid                          (15,102)        (12,298)
                                    ---------------------------------
 Net cash used in financing
  activities                                 (19,102)        (12,369)
                                    ---------------------------------
Foreign exchange gain on cash
 held in a foreign currency                      246               -
                                     --------------------------------

(DECREASE) INCREASE IN CASH AND
 CASH EQUIVALENTS                             (5,144)             37
Cash and cash equivalents,
 beginning of period                          13,742              37
                                    ---------------------------------
CASH AND CASH EQUIVALENTS,
 END OF PERIOD                              $  8,598        $     74
                                    ---------------------------------
                                    ---------------------------------
Represented by:
 Cash and cash equivalents                  $  2,919        $     74
 Restricted cash, current portion              4,547               _
 Restricted cash, less
  current portion                              1,132               _
                                    ---------------------------------
                                            $  8,598        $     74
                                    ---------------------------------
                                    ---------------------------------

SUPPLEMENTARY CASH FLOW INFORMATION
 Taxes paid                                 $      _        $      _
 Interest received                          $  1,837        $      _
 Interest paid                              $    196        $    136

 See accompanying notes to the consolidated financial statements



CALPINE POWER INCOME FUND
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Tabular amounts are in thousands except for Trust Units and per
 Trust Unit amounts)
(unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of the Calpine Power Income Fund ("Fund") have been prepared by Calpine Canada Power Ltd. ("the Manager") in accordance with Canadian generally accepted accounting principles. The accounting policies applied are consistent with those outlined in the Fund's annual financial statements for the year ended December 31, 2004. These consolidated financial statements for the three months ended March 31, 2005 do not include all disclosures required in the annual consolidated financial statements and should be read in conjunction with the annual consolidated financial statements included in the Fund's 2004 Annual Report.

The Fund is not subject to any seasonality in its earnings except as may be derived from its investment in Calpine Power, L.P., which earns more revenue during winter months due to increased requested output from contract counterparties.

2. LOAN TO CALPINE CANADA POWER LTD.

The Fund made a loan to the Manager in 2004 with $48.0 million of funds received from a public offering that was done in conjunction with the acquisition of the King City Facility. This loan has a face value of $53.4 million, will mature in 2010 and bears interest at a fixed rate of 13% per annum with interest and principal payable monthly under the schedule provided in the loan agreement. The discount on the face value is amortized to interest income over the term of the note. The amount of the loan maturing within the next 12 months has been classified as current. The loan is a full recourse  obligation of the Manager and is secured by a pledge of the Manager's limited partnership interest in the Partnership, including the Manager's right to receive distributions under the Class B Subordinated Units of Calpine Power L.P. In addition, Calpine King City has provided the Fund with a limited recourse guarantee of the Manager's obligations under the loan and granted the Fund a security interest in the Lessee's annual cash from operations. As at March 31, 2005 the fair market value of the loan was determined to be approximately $37.7 million (December 31, 2004 - $45.8 million).

Schedule of principal receipts
 and discount amortization             Principal  Discount     Total
---------------------------------------------------------------------
2005 (remainder of the year)             $ 8,014   $(1,162)  $ 6,852
2006                                      10,686    (1,180)    9,506
2007                                      10,686      (757)    9,929
2008                                       8,014      (383)    7,631
2009                                       2,672      (163)    2,509
2010                                       2,671       (58)    2,613
---------------------------------------------------------------------
As at March 31, 2005                     $42,743   $(3,703)  $39,040
                                      -------------------------------
                                      -------------------------------

3. NET INVESTMENT IN LEASE

The Fund acquired the King City Facility in 2004, pursuant to an Acquisition Agreement with BAF Energy and leased it to Calpine King City under a 20 year lease. The lease terms are such that the actual plant acquisition is shown as a net investment in the lease given that the Fund's economic recovery of the investment is substantially achieved from the lease. The Fund will recognize finance income over the lease term that will provide a constant rate of return on the net investment in the lease. Lease payments are denominated in both US and Canadian currency and will be receivable annually on December 31. The US dollar lease receipts are expected to offset substantially all foreign exchange risk associated with satisfying future obligations under the US dollar third party loan. The amount of the net investment in the lease maturing within the next 12 months has been classified as current.

Net Investment in Lease includes the following as at March 31, 2005:

Total minimum lease payments receivable                     $321,625
Unguaranteed residual value                                  179,798
Unearned finance income                                     (358,718)
                                                             142,705
Net investment in lease, current portion                      (7,862)
Net investment in lease, less current portion               $134,843
                                                           ----------
                                                           ----------



Future minimum lease payments receivable under the lease are as
follows:

2005 (remainder of the year)                                $ 20,246
2006                                                          19,956
2007                                                          20,242
2008                                                          20,132
2009                                                          21,321
2010 and beyond                                              219,728
                                                           ----------
                                                            $321,625
                                                           ----------
                                                           ----------

4. LOAN TO CALPINE POWER, L.P.

In January 2005, the Fund loaned an additional $4.0 million to the Partnership to complete the financing of the capital upgrade at the Island Cogeneration Facility. Interest is charged at a rate of 10 basis points over the rate charged under the credit facility which averaged 4.56% for the three months ended March 31, 2005. Although the loan is a demand loan, it is not expected to be fully repaid until sometime after 2007. During the three months ended March 31, 2005, the Partnership repaid $2.2 million to the Fund in satisfaction of the loan. As at March 31, 2005, the fair market value of the loan was determined to be approximately $13.8 million (December 31, 2004 - $12.2 million).

5. LONG-TERM DEBT

In connection with the acquisition of the King City Facility in 2004, the Fund entered into a loan for an amount equal to US$82 million from a third party lender. This loan will mature in 2019 and bear interest at a fixed interest rate of 12.8% per annum. The amount of the loan maturing within the next 12 months has been classified as current. The loan is a full recourse obligation of King City LP ("KCLP"), a wholly-owned subsidiary of the Fund, but non-recourse to the Fund. Payments of principal and interest are payable annually on December 31. The loan is secured by a first preferred security interest in all assets owned by KCLP without limitation. As at March 31, 2005 the fair market value of the loan was determined to be approximately US$81.7 million.

The Fund established a segregated cash account in 2004 of US$4.6 million (CDN $5.6 million) with proceeds received from a public offering that was part of the acquisition of the King City Facility. This cash amount, together with interest earned thereon, will be used to partially satisfy its obligations to the third party lender for principal and interest payments under the terms of the debt in 2005 and 2006.

6. CREDIT FACILITY

The Fund, through CCT, established a $120 million extendible term credit facility in 2003. The term credit facility has a three year term, comprised of a two year revolving period followed by a one year term period.

The facility can be drawn upon in Canadian or US dollars and has varying interest rates based on prevailing market-based interest rates, and the ratio of consolidated debt to adjusted consolidated earnings. Standby fees range from 45 basis points to 75 basis points, depending on the ratio of consolidated debt to adjusted consolidated earnings and are charged on the undrawn balance of the facility. During the three months ended March 31, 2005, $4.0 million of the credit facility was repaid with cash receipts from the loan to the Partnership and principal and interest received from the Manager in excess of distribution requirements. Interest on the current balance of the facility averaged 4.46% for the three months ended March 31, 2005. Due to the short-term nature and floating interest rate on the credit facility borrowing, carrying value approximates fair value.

Security for the facility consists of a floating charge and a security interest over CCT's and the Partnership's current and after acquired real and personal property, and is subject to certain financial covenants measured quarterly. If not renewed, any outstanding balance on the credit facility must be settled by October 2006.

7. INVESTMENT IN CALPINE POWER, L.P.

As at March 31, 2005, the equity investment in Calpine Power, L.P.
was comprised as follows:

---------------------------------------------------------------------
Investment in Calpine Power, L.P. at December 31, 2004      $476,649
Equity Earnings from Calpine Power, L.P.                      14,008
Distributions received and receivable from Calpine
 Power, L.P.                                                 (13,439)
---------------------------------------------------------------------
As at March 31, 2005                                        $477,218
---------------------------------------------------------------------
---------------------------------------------------------------------

8. WORKING CAPITAL
                                        Three months    Three months
                                               ended           ended
Change in non-cash working capital    March 31, 2005  March 31, 2004
---------------------------------------------------------------------
Operating Activities
Accounts receivable                           $  138         $    (2)
Prepaid expenses                                 107              78
Accounts payable                               2,605          (3,263)
                                     --------------------------------
                                              $2,850         $(3,187)
                                     --------------------------------
                                     --------------------------------

9. RELATED PARTY TRANSACTIONS

As at March 31, 2005 and December 31, 2004 the Fund had the following
balances receivable from (payable to) related parties in the normal
course of business:


                                               As at           As at
                                            March 31,    December 31,
                                                2005            2004
---------------------------------------------------------------------
Distributions receivable from the
 Partnership                                $  4,730        $  3,890
Loan receivable from the Partnership          13,801          11,993
Accounts receivable from the Partnership         159             306
Accounts payable to the Partnership             (213)            (28)
Accounts payable to the Manager                 (346)           (684)
Accounts payable to Calpine                     (100)            (55)
---------------------------------------------------------------------

In January 2005, the Fund advanced $4.0 million to the Partnership to complete the financing of the capital upgrade at the Island Cogeneration Facility. The Partnership repaid $2.2 million to the Fund in the three months ended March 31, 2005 in satisfaction of this loan. For the three months ended March 31, 2005, $165 thousand (March 31, 2004 - nil) of interest income on this amount was recognized by the Fund based on a rate 10 basis points over the rate incurred on the Fund's credit facility that averaged 4.46% for the three months ended March 31, 2005.

As at March 31, 2005 and December 31, 2004, the Fund had the following balances receivable from related parties resulting from the acquisition of the King City Facility:

As at           As at
                                            March 31,    December 31,
                                                2005            2004
---------------------------------------------------------------------
Loan to Manager                               39,040          41,271
Ground Lease due from Calpine                     30              95
Net Investment in Lease due from Calpine     142,705         137,104
---------------------------------------------------------------------

For the three months ended March 31, 2005, the Fund recognized finance and rental income of $4.6 million (March 31, 2004 - nil) from the Facility and Ground Lease with Calpine King City.

Interest earned with respect to the loan to Calpine Canada Power Ltd. amounted to $1.4 million for the three months ended March 31, 2005 (March 31, 2004 - nil).

CALPINE POWER, L.P.
CONSOLIDATED BALANCE SHEETS
(thousands)

                                               As at           As at
                                            March 31,    December 31,
                                                2005            2004
---------------------------------------------------------------------
                                          (unaudited)
ASSETS
Current Assets
 Cash and cash equivalents (Note 2)         $ 23,811        $ 13,715
 Accounts receivable                          11,996          10,819
 Interest receivable - Whitby Loan (Note 3)      584           2,248
 Inventory                                     2,603           2,579
 Prepaid expenses                              3,102           2,014
                                           --------------------------
                                              42,096          31,375
Loan to Calpine Canada Whitby Holdings
 Company (Note 3)                             37,404          37,404
Capital assets (Note 4)                      586,102         591,450
                                           --------------------------
                                            $665,602        $660,229
                                           --------------------------
                                           --------------------------
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities
 Distributions payable                      $  6,508        $  5,651
 Accounts payable and accrued liabilities
  - trade                                     10,581           8,577
  - accrued capital                                -              44
 Interest payable                                 57             242
 Loan payable (Note 5)                        13,801          11,993
                                           --------------------------
                                              30,947          26,507
 Asset retirement liability                    2,419           2,369
                                           --------------------------

                                              33,366          28,876

 Partners' equity (Note 6)                   632,236         631,353
                                           --------------------------

                                            $665,602        $660,229
                                           --------------------------
                                           --------------------------
See accompanying notes to the consolidated financial statements


CALPINE POWER, L.P.
CONSOLIDATED STATEMENTS OF EARNINGS AND PARTNERS' EQUITY
(thousands, except for per Unit amounts) (unaudited)

                                        Three months    Three months
                                               ended           ended
                                      March 31, 2005  March 31, 2004
---------------------------------------------------------------------
REVENUES

 Electricity and thermal                    $ 28,775        $ 26,757

 Interest - Whitby                               837             846

          - Other income                         127              68
                                           --------------------------
                                              29,739          27,671
                                           --------------------------

EXPENSES

 Operating and maintenance                     4,336           4,777

 Depreciation                                  5,402           5,203

 Accretion                                        50              46

 Interest                                        164               -

 General and administrative                      152               3

 Foreign exchange loss (gain)                    (22)           (126)
                                           --------------------------
                                              10,082           9,903
                                           --------------------------

NET EARNINGS                                  19,657          17,768

PARTNERS' EQUITY, BEGINNING OF PERIOD        631,353         644,508

Special distributions                              -          (1,697)

Distributions                                (18,774)        (20,828)
                                           --------------------------

PARTNERS' EQUITY, END OF PERIOD             $632,236        $639,751
                                           --------------------------
                                           --------------------------


Net earnings per Unit (Note 6):

 Class A Priority Unit                      $ 0.2694        $ 0.2550
                                           --------------------------
                                           --------------------------

 Class B Subordinated Unit                  $ 0.2535        $ 0.2022
                                           --------------------------
                                           --------------------------
See accompanying notes to the consolidated financial statements


CALPINE POWER, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands) (unaudited)

                                        Three months    Three months
                                               ended           ended
                                      March 31, 2005  March 31, 2004
---------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings                                $ 19,657        $ 17,768
Adjustments for non-cash items:
 Depreciation                                  5,402           5,203
 Accretion                                        50              46
 Foreign exchange                                (22)           (126)
                                           --------------------------

Cash from operations before working
 capital changes                              25,087          22,891
Change in non-cash working capital (Note 7)    1,194           8,937
                                           --------------------------

Net cash provided by operating activities     26,281          31,828
                                           --------------------------

INVESTING ACTIVITIES
Capital expenditures                             (54)         (6,878)
Change in non-cash working capital (Note 7)      (44)           (349)
                                           --------------------------

Net cash used in investing activities            (98)         (7,227)
                                           --------------------------

FINANCING ACTIVITIES
Loan payable                                   4,007               -
Payment of principal on loan payable          (2,199)              -
Special distributions on the Class B
 Subordinated Units                                -          (1,697)
Distributions                                (17,917)        (22,610)
                                           --------------------------

Net cash used in financing activities        (16,109)        (24,307)
                                           --------------------------

Foreign exchange gain on cash held in
 foreign currency                                 22             126
                                           --------------------------

INCREASE IN CASH AND CASH EQUIVALENTS         10,096             420
Cash and cash equivalents,
 beginning of period                          13,715          15,168
                                           --------------------------

Cash and cash equivalents, end of period    $ 23,811        $ 15,588
                                           --------------------------
                                           --------------------------

Represented by:
Cash and cash equivalents                   $ 23,811        $ 15,588
                                           --------------------------

                                            $ 23,811        $ 15,588
                                           --------------------------
                                           --------------------------

SUPPLEMENTARY CASH FLOW INFORMATION
Interest received                           $  2,627        $    818
Interest paid                               $    349        $      -

See accompanying notes to the consolidated financial statements


CALPINE POWER, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Tabular amounts are in thousands except for per Unit amounts)
(unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of Calpine Power, L.P. (the "Partnership") have been prepared by Calpine Canada Power Ltd. (the "Manager") in accordance with Canadian generally accepted accounting principles. The accounting policies applied are consistent with those outlined in the Partnership's annual consolidated financial statements for the year ended December 31, 2004. These consolidated financial statements for the three months ended March 31, 2005 do not include all disclosures required in the annual consolidated financial statements and should be read in conjunction with the annual financial statements included in the 2004 Calpine Power Income Fund (the "Fund") Annual Report.

The Partnership's earnings are subject to seasonality from its Island Cogeneration Facility, which earns more revenue during winter months due to increased requested output from contract counterparties.

Certain comparative figures have been reclassified to conform with the 2005 presentation.

2. MAINTENANCE RESERVE

At March 31, 2005, a maintenance reserve of $12.4 million (December 31, 2004 - $10.9 million) has been accumulated within cash and cash equivalents to partially fund future maintenance costs.

3. WHITBY LOAN

Cash received during the three months ended March 31, 2005 in the amount of $2.5 million (March 31, 2004 - $750 thousand) associated with the Whitby Loan has been applied to the accrued interest receivable balance consistent with the terms of the loan agreement. As at March 31, 2005, the fair market value of the Whitby Loan was determined to be approximately $38.9 million (December 31, 2004 - $40.3 million).

4. CAPITAL ASSETS

---------------------------------------------------------------------
                                               Accumulated  Net Book
                                        Cost  Depreciation     Value
---------------------------------------------------------------------
As at March 31, 2005
Land                                $    334      $      -  $    334
Power generation plants
 and equipment                       632,131        46,363   585,768
---------------------------------------------------------------------
                                    $632,465      $ 46,363  $586,102
---------------------------------------------------------------------
---------------------------------------------------------------------
As at December 31, 2004
Land                                $    334      $      -  $    334
Power generation plants
 and equipment                       632,077        40,961   591,116
---------------------------------------------------------------------
                                    $632,411      $ 40,961  $591,450
---------------------------------------------------------------------
---------------------------------------------------------------------

5. LOAN PAYABLE

In January 2005, an additional $4.0 million was advanced to the Partnership by the Fund to complete the financing of the capital upgrade at the Island Cogeneration Facility. Interest is charged at a rate of 10 basis points over the rate per the Fund's credit facility which averaged 4.56% for the three months ended March 31, 2005. Although the loan is a demand loan, it is not expected to be fully repaid until sometime after 2007. During the three months ended March 31, 2005, the Partnership repaid $2.2 million to the Fund in satisfaction of the loan. As at March 31, 2005, the fair market value of the loan was determined to be approximately $13.8 million (December 31, 2004 - $12.2 million).

6. PARTNERS' EQUITY

The Partnership is authorized to issue an unlimited number of Class A Priority Units and an unlimited number of Class B Subordinated Units. For the three months ended March 31, 2005, the holder of Class A Priority Units, CCT, received the first $0.0798 of Distributable Cash per Class A Priority Unit per month (in addition to an amount equal to certain management and administrative expenses incurred directly by the Fund) on a cumulative basis in priority to any payments on the Class B Subordinated Units. For the three months ended March 31, 2005, the holder of Class B Subordinated Units, the Manager, was entitled to receive up to $0.0798 of Distributable Cash per Class B Subordinated Unit per month which amounts are cumulative for a fiscal year (and if unpaid at the end of a fiscal year, this entitlement terminates for such fiscal year) following the priority payment of Distributable Cash to the holder of Class A Priority Units. Each year until 2022, the Distributable Cash entitlements increase at an annual rate of 1%. Holders of Class A Priority Units and Class B Subordinated Units are entitled to share equally, on a class basis, any Distributable Cash in excess of their prior entitlements in any calendar year.

Class      Class
                                       A Units    B Units      Total
---------------------------------------------------------------------
As at December 31, 2004               $476,649   $154,704   $631,353
Net earnings                            14,008      5,649     19,657
Distributions declared                 (13,439)    (5,335)   (18,774)
                                     ---------- ---------- ----------
As at March 31, 2005                  $477,218   $155,018   $632,236
                                     ---------- ---------- ----------
                                     ---------- ---------- ----------

Net earnings per Class A Priority Unit and Class B Subordinated Unit for the three months ended March 31, 2005 have been calculated based on a weighted average of 52,001,352 Class A Priority Units (December 31, 2004 - 52,001,352) and 22,286,294 Class B Subordinated Units (December 31, 2004 - 22,286,294).

7. WORKING CAPITAL

Change in non-cash            Three months ended  Three months ended
 working capital                  March 31, 2005      March 31, 2004
---------------------------------------------------------------------
Operating activities:
Accounts receivable                     $ (1,177)            $ 8,325
Interest receivable                        1,664                 (96)
Prepaid expenses                          (1,088)             (1,179)
Accounts Payable and
 accrued Liabilities                       2,004               1,925
Interest payable                            (185)                  -
Inventory                                    (24)                (38)
                              ---------------------------------------
                                        $  1,194             $ 8,937
                              ---------------------------------------
                              ---------------------------------------
Investing activities:
Accounts payable
 - accrued capital                      $    (44)            $  (349)
                              ---------------------------------------
                                        $    (44)            $  (349)
                              ---------------------------------------
                              ---------------------------------------

8. RELATED PARTY TRANSACTIONS

Interest earned with respect to the Whitby Loan was $837 thousand for the three months ended March 31, 2005 (March 31, 2004 - $846 thousand).

The Calgary Energy Centre and Calpine Energy Services Canada Partnership ("CESCP") entered into a tolling agreement whereby the Calgary Energy Centre earns revenue through monthly payments, composed of both a fixed and variable portion, received from CESCP in exchange for providing the full operating capacity of the plant. For the three months ended March 31, 2005, the Partnership recognized revenues of $13.8 million (March 31, 2004 - $13.7 million) from CESCP related to this agreement.

As at March 31, 2005 and December 31, 2004, the Partnership had the following balances receivable from (payable to) related parties in the normal course of business:

As at           As at
                                            March 31,    December 31,
                                                2005            2004
---------------------------------------------------------------------
Accounts receivable from Calpine             $ 4,622         $ 3,664
Accounts receivable from the Fund                213              28
Loan and interest receivable from
 Calpine Canada Whitby Holdings Company       37,988          39,652
Distributions payable to Calpine
 Commercial Trust                             (4,730)         (3,890)
Distributions payable to the Manager          (1,778)         (1,761)
Accounts payable to Calpine                   (1,755)         (1,613)
Accounts payable to the Fund                    (159)           (306)
Loan payable to the Fund                     (13,801)        (11,993)
---------------------------------------------------------------------

Calpine Power Income Fund (TSX:CF.UN)