Calpine Reports 200% Increase in Earnings Per Share for First Quarter 2000.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--April 27, 2000

Calpine Corporation (NYSE:CPN), the nation's fastest growing independent power company, today announced record financial results for the quarter ended March 31, 2000.

Net income was $18.1 million for the quarter ended March 31, 2000, representing a 364% increase over 1999 first quarter net income of $3.9 million. Diluted earnings per share for the first quarter rose to $0.27 per share, from $0.09 per share for the same period last year. Revenue for the quarter rose 56% to $235.4 million, from $150.6 million a year ago. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) increased 113% to $108.6 million for the quarter, compared to $51.1 million a year ago. Total assets at March 31, 2000 were $4.5 billion as compared to $4.0 billion at December 31, 1999.

Earnings for the quarter benefited primarily from Calpine's acquisition of 14 geothermal power plants in May 1999 at The Geysers and its purchase of Cogeneration Corporation of America in December 1999. In addition, the company's earnings benefited from continued outstanding plant performance throughout Calpine's national power portfolio.

"Our strong earnings reflect Calpine's continued success as the nation's leading independent power company," stated Calpine CEO and President Peter Cartwright. "We continue to make great strides in advancing our program to repower America, while turning in another consecutive quarter of exceptional financial results. By the end of 2004, we expect to have 25,000 megawatts of clean, cost-competitive generation in place. We're well on our way to achieving this goal. To date, Calpine has 17,200 megawatts of generation in operation, under construction or in announced development throughout the U.S.

Highlights of recent activities include:

Development Program -- Calpine continues to lead the nation in the development of modern natural gas-fired energy centers. Calpine currently has more than 13,800 megawatts of generating facilities under construction or in announced development.

      --  Calpine announced it has acquired a 50% interest in the Aries
        Power Plant, a 600-megawatt natural gas-fired energy center
        currently under construction near Pleasant Hill, Mo. The Aries
        Power Plant marks Calpine's entry into the Southwest Power
        Pool -- a strategically important energy market. Construction
        of the $280 million facility began in October 1999. Commercial
        operation for the first 330 megawatts is expected to begin in
        June 2001, with the plant entering full production in January
        2002.

      --  Calpine entered into an agreement to provide the Sacramento
        Municipal Utility District (SMUD) with a five-year supply of
        electricity from its 545-megawatt Sutter Power Plant,
        currently under construction in Sutter County, north of
        Sacramento, Calif. Calpine will provide 150 megawatts of
        electricity to SMUD's growing customer base beginning with
        plant start-up in the summer of 2001--in time to help offset
        anticipated system strains in northern California.

      --  Expanding its development program into the Pacific Northwest,
        Calpine acquired the development rights for the Hermiston
        Energy Center, a 540-megawatt combined-cycle facility fueled
        by natural gas. The new energy center, located in Hermiston,
        Ore., will have access to the California-Oregon border and the
        Mid-Columbia markets.

      --  Calpine entered the Alabama electric power market with the
        announcement of plans to build, own and operate a natural
        gas-fired cogeneration facility at Solutia, Inc.'s Decatur,
        Ala. chemical facility. The proposed Decatur Energy Center
        will generate 700 megawatts of electricity for Solutia's
        industrial processing and for Alabama's growing power market.
        Permitting for the $350 million facility has commenced.
        Construction is scheduled to begin in mid-2000, with energy
        deliveries slated to begin in the summer of 2002.

      --  Calpine expanded its operations in the fast-growing Florida
        energy market with the development of two new natural
        gas-fired energy centers. Calpine will be investing $750
        million to build, own and operate the 1,080-megawatt Blue
        Heron Energy Center, to be located in Indian River County
        outside the City of Vero Beach, and the 540-megawatt Osprey
        Energy Center, which will be built adjacent to Calpine's
        existing Auburndale power facility. In addition, Calpine has
        opened a Tampa, Fla. office to manage the company's Southeast
        development activities.

      --  Voters in Oxford, Conn. approved agreements that will allow
        Calpine to move ahead with its proposed Towantic Energy
        Center, a 500-megawatt natural gas-fired facility under
        development in Oxford, Conn. During a townwide referendum,
        voters approved the sale of town-owned land for the project,
        as well as a Tax Stabilization Agreement that will levelize
        the property taxes paid to the Town over a 22-year period.

      --  Calpine has announced plans for its first energy facility in
        Mississippi. The Lone Oak Energy Center will be an
        800-megawatt natural gas-fired energy facility to be located
        in Lowndes County. The facility represents an investment of
        $425 million and is expected to enter production in early
        2003.

      --  Permitting efforts are under way for Calpine's second energy
        center in Alabama. Calpine is developing the Hillabee Energy
        Center, a 700-megawatt natural gas-fired facility to be
        located in Tallapoosa County, north of Alexander City. The
        proposed facility will serve Southeast wholesale customers
        beginning in early 2003. Calpine expects to begin construction
        in the first quarter of 2001.

      --  Calpine has partnered with Cleco Midstream Resources to
        develop the Acadia Energy Center. The partners plan to build,
        own and operate the 1,000-megawatt natural gas-fired
        generating facility near Eunice, La. Cleco announced the
        energy center in late 1999. The proposed $500 million facility
        will be designed to help relieve the transmission-constrained
        Southwest Power Pool market. Construction is slated to begin
        in mid-2000, with energy deliveries scheduled for June 2002.

      --  Extending its market presence in the rapidly growing south
        Texas power market, Calpine acquired a 78.5% interest in the
        500-megawatt Hidalgo Energy Center -- under construction in
        Edinburg, Texas -- for $235 million. The Hidalgo facility will
        sell power into ERCOT's wholesale market, utilizing Calpine's
        unique system approach. Construction of the facility began in
        February 1999, and commercial operation is expected to begin
        in June 2000. Calpine will operate and maintain the plant.

      --  The 540-megawatt Wawayanda Energy Center, under development
        near Middletown, N.Y., represents Calpine's flagship project
        for developing a strong position in the New York merchant
        power market. The new natural gas-fired facility will
        complement Calpine's existing power assets on Long Island.
        Commercial operation will begin in early 2004.

      --  A 50-megawatt expansion program is under way at Calpine's
        117-megawatt Morris Cogeneration Facility. Calpine is
        installing a steam turbine at its Morris, Ill. facility to
        maximize fuel efficiency, lower operating costs and increase
        plant output. In addition, the company has entered into a
        power sales agreement to deliver approximately 100 megawatts
        of capacity from its Morris plant to Commonwealth Edison
        Company (COMED). COMED is currently purchasing 50 megawatts of
        electricity, and upon completion of the expansion in June
        2000, will take the second 50-megawatt segment.

      --  Calpine recently unveiled its plans to build, own and operate
        the Calgary Energy Centre. The facility will be the first
        independent power project announced in the Calgary area, and
        represents Calpine's first investment in the Canadian power
        market. The facility will help increase security of
        electricity supply for Alberta and Calgary and will have the
        ability to produce an additional 50 megawatts of electricity
        during peak power demand periods.

Acquisition Program -- Acquiring strategic power and natural gas assets is a key component of Calpine's growth strategy. In 2000, Calpine announced the completion of two major acquisitions, significantly strengthening its position as a low-cost power provider.

      --  To help fuel its natural gas power program in northern
        California, Calpine acquired 90 billion cubic feet of proven,
        natural gas reserves from Vintage Petroleum, Inc. for
        approximately $71.5 million. This acquisition established
        Calpine as the largest natural gas producer in the Sacramento
        basin.

      --  Calpine further expanded its northern California gas
        operations with the acquisition of the 130-mile Steelhead gas
        pipeline and the remaining interest in the Sacramento River
        Gas System. The new pipelines have doubled Calpine's existing
        capacity to deliver gas to its existing and future power
        plants in the region.

      Capital Program

      --  Calpine raised $360 million through a private placement of
        convertible preferred securities, priced to yield 5-1/2%, with
        a conversion premium of 27%. Proceeds from the offering will
        be used to finance the company's power plant development and
        construction program.

      --  Duff & Phelps Credit Rating Co. (DCR) upgraded Calpine's
        senior unsecured debt to investment grade "BBB-" from "BB+"
        and convertible preferred securities to "BB" from "BB-".
        Calpine's rating outlook is stable. DCR's upgrade was
        attributed to Calpine's outstanding natural gas-fired and
        geothermal plant performance, and the company's unique,
        integrated approach that focuses on developing its low-cost
        generating portfolio.

About Calpine

Calpine Corporation, the leading independent power company in the United States, is dedicated to providing customers with clean, reliable and competitively priced electricity. Calpine is active in 20 states and Alberta, Canada. Calpine's corporate headquarters are located in San Jose, Calif., with regional offices in Houston, Texas; Pleasanton, Calif.; and Boston, Mass. Calpine currently has approximately 17,200 megawatts of capacity in operation, under construction or in announced development -- enough energy to power more than 17 million households. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information about Calpine, please see our website at www.calpine.com.

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

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                            (Table Follows)

                 CALPINE CORPORATION AND SUBSIDIARIES
                 Consolidated Statements of Operations
               For the Three Months Ended March 31, 2000
               (in thousands, except per share amounts)
                              (unaudited)

                                               Three Months Ended
                                                     March 31,

                                                2000          1999
Revenue:
 Electricity and steam sales               $ 193,924     $  128,026
 Oil and gas revenue                           8,575             --
 Service contract revenue                     23,129         11,502(1)
 Income from unconsolidated investments
  in power                                     9,774         10,812
 Interest income on loans to power
  projects                                        --            303
                                           ---------       ---------
Total revenue                                235,402         150,643

Cost of revenue:
 Plant operating expense                       40,604        24,055(2)
 Fuel expense                                  73,652        53,937
 Depreciation expense                          27,818        18,979
 Operating lease expense                       10,458         5,593
 Production royalties expense                   3,707         2,417
 Service contract expense                      20,488        10,175(1)
                                            ---------     ---------
   Total cost of revenue                      176,727       115,156

Gross profit                                   58,675        35,487

Project development expense                     3,755         1,956
General and administrative expense              8,619         9,112(2)
                                            ---------     ---------
 Income from operations                        46,301        24,419

Other expense (income):
 Interest expense                              17,907        21,027
 Interest income                               (7,562)       (2,778)
 Distributions on trust preferred
  securities                                    6,978            --
 Minority interest expense                        217            --
 Other income, net                             (1,053)         (163)
                                             ---------     ---------
  Income before provision for income taxes     29,814         6,333

Provision for income taxes                     11,687         2,483
                                            ---------      ---------
  Net income                                $  18,127     $   3,850
                                            =========     ==========

Basic earnings per common share:
 Weighted average shares outstanding           63,337        41,190
 Basic earnings per share                   $    0.29     $    0.09

Diluted earnings per common share:
 Weighted average shares outstanding           67,314        43,890
 Diluted earnings per share                 $    0.27     $    0.09

Depreciation and amortization               $  29,911     $  19,455
Interest expense per indenture              $  21,447     $  23,103
EBITDA                                      $ 108,558     $  51,138
EBITDA to total interest expense               5.06x          2.21x

(1) Service contract revenue and expense in 1999 have been reclassed to conform with the 2000 presentation.

(2) Certain 1999 expenses have been reclassed from general and administrative expense to plant operating expense to conform with 2000 presentation.