Calpine Reports Earnings Per Share Up 59% For 1999.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--February 3, 2000

Calpine Corporation (NYSE:CPN), one of the nation's fastest growing power companies, today reported record financial results for the quarter and year ended December 31, 1999.

Net income for the year ended December 31, 1999 was $95.1 million, representing a 108% increase over 1998 net income of $45.7 million. Diluted earnings per share rose 59% to $1.73 per share, from $1.09 in 1998. Revenue for the year increased 52% to $847.7 million, from $555.9 million a year ago. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was $392.2 million for 1999, up 54% from $255.3 million in 1998. Total assets at December 31, 1999 were $3.9 billion as compared to $1.7 billion at December 31, 1998.

For the quarter ended December 31, 1999, net income was $30.8 million, an increase of 120% compared to $14.0 million for the fourth quarter 1998. Diluted earnings per share for the quarter were $0.48 per share, up 45% from $0.33 per share for the same period in 1998. Revenue for the quarter increased 43% to $247.5 million compared to $173.0 million for the same period a year ago. EBITDA for the fourth quarter was $123.9 million, up 81% from $68.3 million in 1998.

The increase in earnings for both the quarter and year ended December 31, 1999 was primarily the result of the company's acquisition of 14 geothermal power plants -- totaling approximately 700 megawatts -- from Pacific Gas and Electric Company, completed in May 1999. For certain of these facilities, revenue includes amounts received under a Reliability Must Run contract with the California Independent System Operator, which was recently approved by the Federal Energy Regulatory Commission.

&uot;Calpine entered the ranks as one of the nation's most profitable power companies in 1999, reflecting the strength of our organization and the company's outstanding plant performance,&uot; stated Calpine President and Chief Executive Officer Peter Cartwright. &uot;Calpine's stock rose 407% in 1999 -- the highest increase amongst leading energy and power companies.&uot;

&uot;Our goal remains clear and consistent: develop, acquire, own and operate clean, efficient and reliable electric generating facilities to meet increasing demand and replace America's aging power fleet,&uot; continued Cartwright. &uot;In 1999, we revised our five-year power portfolio target to 25,000 megawatts by year-end 2004. Today, we're well on our way to achieving this goal with 14,000 megawatts in operation, under construction or in announced development.&uot;

    Highlights for 1999 include:

Acquisition Program - Calpine became the world's largest
geothermal power provider in 1999 and significantly strengthened its
gas-fired operations and fuels capabilities.

-- Acquired 15 power plants and related steam fields at The
   Geysers of northern California, adding 770 megawatts.

-- Increased Calpine's gas-fired portfolio by 20% with the acquisition
   of Cogeneration Corporation of America.

-- Purchased Sheridan Energy, adding strategic natural gas reserves
   in northern California and Gulf Coast states and in-house
   fuels capabilities.

    Calpine leads the U.S. power industry with the largest
construction and development program. Today, 10 projects are in
construction totaling 4,376 net megawatts and 11 facilities are in
announced development, which will add 6,278 net megawatts of
generation by 2003.


Construction Program - In 1999, Calpine began construction of six
new energy facilities.

-- Initiated construction for 730-megawatt Magic Valley Generating
   Station in south Texas.

-- Announced 540-megawatt gas-fired facility in Westbrook Maine;
   construction underway; energy deliveries slated for January 2001.

-- Received California Energy Commission License for 545-megawatt
   Sutter Power Plant -- first new power plant under construction in
   California's deregulated power industry; five-year contract in
   place with Sacramento Municipal Utility District; commercial
   operation scheduled for summer 2001.

-- Commenced construction for 545-megawatt natural gas-fired
   facility on Fort Mojave Indian Reservation in Arizona; South
   Point Power Plant to enter commercial operation in early 2001.

-- Entered joint venture with Lower Colorado River Authority to
   develop 545-megawatt Lost Pines 1 Power Plant currently under
   construction in Bastrop County, Texas.

-- Initiated construction for Los Medanos Energy Center, a
   500-megawatt natural gas-fired cogeneration facility in
   Pittsburg, Calif. at USS-POSCO's steel facility.

-- Completed $265 million financing for 545-megawatt Pasadena Power
   Plant expansion in Texas; construction is underway; start-up
   scheduled for June 2000.


Development Program - Calpine announced six new strategic
development opportunities in 1999.

-- Introduced 600-megawatt Metcalf Energy Center in San Jose,
   Calif.; plant to provide needed generation to Bay Area in 2003.

-- Announced partnership with Pinnacle West Capital Corporation to
   develop 545-megawatt natural gas-fired facility at Arizona
   Public Service's West Phoenix Power Station.

-- Entered Pennsylvania power market; announced plans for
   545-megawatt natural gas-fired facility in Ontelaunee Township.

-- Launched 800-megawatt cogeneration plant at Bayer Corporation's
   chemical facility in Baytown, Texas; final stages of
   permitting; start-up slated for late 2001.

-- Initiated development of 560-megawatt Channel Energy Center at
   Lyondell-Citgo's Houston, Texas refinery.

-- Launched Towantic Energy Center, a 500-megawatt natural gas-fired
   facility to be located in Oxford, Conn.

-- Increased number of gas turbines on order to 69, providing Calpine
   with a distinct competitive advantage in building its
   25,000-megawatt power portfolio.


Operations/Enhancement Program - Calpine's value-added approach
to power generation provides unique opportunities to maximize
efficiencies and profitability.

-- Amended power purchase agreement with Pacific Gas and Electric
   Company for the electric output of Gilroy, Calif. natural
   gas-fired plant, providing Calpine earlier access to California's
   deregulated power market.

-- Acquired PowerSuite, a fully integrated, real-time business
   management system, to enhance Calpine's power generation
   capabilities.


Finance Program - In 1999, Calpine raised approximately $3
billion to fund continued growth.

-- Completed successful capital offerings, raising nearly $1.5
   billion.

-- Secured $1 billion revolving credit facility to fund construction
   -- the first deal of its kind and magnitude in the industry.

-- Completed two-for-one stock split.

-- Achieved BB+ credit rating by all 3 major rating agencies.

About Calpine Corporation

Calpine Corporation is a leading U.S. power company dedicated to providing customers with reliable and competitively priced electricity. Calpine currently has interests in approximately 14,000 megawatts of capacity in operation, under construction or in announced development in 18 states -- enough energy to power approximately 14 million households. Calpine has headquarters in San Jose, Calif., with regional offices in Houston, Texas; Pleasanton, Calif.; and Boston, Mass. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. To learn more about Calpine, visit its website at www.calpine.com.

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

                CALPINE CORPORATION AND SUBSIDIARIES
                Consolidated Statements of Operations
  For the Three and Twelve Months Ended December 31, 1999 and 1998
              (in thousands, except per share amounts)
                             (unaudited)

                          Three Months Ended     Twelve Months Ended
                              December 31,           December 31,
                            1999      1998         1999      1998

Revenue:
 Electricity and steam
  sales                   $230,560  $160,538     $760,325  $507,897
 Service contract
  revenue from related
  parties                    8,688     3,886       43,773    20,249
 Income from
  unconsolidated
  investments in power
  projects                   2,430     8,609       36,593    25,240
 Interest income on
  loans to power
  projects                      --        --        1,226     2,562
 Other revenue               5,818        --        5,818        --
  Total revenue            247,496   173,033      847,735   555,948

Cost of revenue:
 Plant operating
  expenses                  36,854    24,903      118,334    74,486
 Fuel expenses              74,469    61,211      268,734   181,593
 Depreciation               26,518    21,456       82,812    73,988
 Production royalties        4,022     2,686       13,767    10,714
 Operating lease
  expenses                  10,055     6,139       33,594    17,129
 Service contract
  expenses                   7,556     5,703       40,236    17,417
  Total cost of
   revenue                 159,474   122,098      557,477   375,327

Gross profit                88,022    50,935      290,258   180,621

Project development
 expenses                    3,045     2,324       10,712     7,165
General and
 administrative
 expenses                   18,789     8,349       53,044    26,780
  Income from operations    66,188    40,262      226,502   146,676

Other expense (income):
Interest expense            20,972    21,588       91,162    86,726
Distributions on
 trust preferred
 securities                  2,565        --        2,565        --
Interest income             (7,801)   (2,959)     (24,106)  (12,348)
Other income, net              (72)     (241)      (1,335)   (1,075)
  Income before
   provision for
   income taxes             50,524    21,874      158,216    73,373

Provision for
 income taxes               19,758     7,841       61,973    27,054
  Income before
   extraordinary charge     30,766    14,033       96,243    46,319
  Extraordinary charge
   net of tax benefit
   of $--, $--, $793
   and 441                      --        --        1,150       641
  Net income              $ 30,766  $ 14,033     $ 95,093  $ 45,678

Basic earnings
 per common share:
 Weighted average
  shares outstanding        59,888    40,314       52,328    40,242
 Income before
  extraordinary charge    $   0.51  $   0.35     $   1.84  $   1.15
 Extraordinary charge     $     --  $     --     $  (0.02) $  (0.01)
 Net income               $   0.51  $   0.35     $   1.82  $   1.14

Diluted earnings per
 common share:
 Weighted average
  shares outstanding        63,716    42,610       55,661    42,328
 Income before
  extraordinary charge    $   0.48  $   0.33     $   1.73  $   1.09
 Extraordinary charge     $     --  $     --     $  (0.02) $  (0.01)
 Net income               $   0.48  $   0.33     $   1.71  $   1.08

 Depreciation and
  amortization            $ 26,597  $ 17,061     $ 83,040  $ 82,913
 Interest expense
  per indenture           $ 24,754  $ 23,828     $103,403  $ 93,015
 EBITDA                   $123,921  $ 68,290     $392,160  $255,306
 EBITDA to total
  interest expense            5.01x     2.87x        3.79x     2.74x