Calpine Reports Record Earnings for 1996.

SAN JOSE, Calif.--(BUSINESS WIRE)--April 1, 1996--Calpine Corp., the San Jose-based power producer, today reported record earnings for 1995, with a 39% increase in revenue and 23% increase in net income over 1994 levels.

For the year ended Dec. 31, 1995, revenue was $132.1 million and net income was $7.4 million, compared with $94.8 million and $6 million for 1994.

In 1995, Calpine's earnings benefited from the company's strategic acquisitions and investments. The company: -0-

- Acquired the Watsonville and Greenleaf 1 and 2 gas-fired facilities totalling 128 megawatts;

- Purchased an additional working interest in certain steam fields at The Geysers geothermal resource;

- Invested $8.8 million in enhancements to its Geysers geothermal projects; and

- Launched its first foreign venture at the Cerro Prieto geothermal resource in Baja California, Mexico, with an investment of up to $18.5 million structured as a senior secured loan to the project. -0-

Electricity and steam sales revenue increased primarily due to the operation of the Greenleaf and Watsonville facilities during 1995, which contributed $28.3 million and $5.9 million respectively. The company acquired the Greenleaf facilities, consisting of two 49.5 megawatt gas-fired cogeneration facilities, in April 1995.

In June 1995, the company acquired the operating lease of the Watsonville 28.5 megawatt gas-fired cogeneration facility. In addition, 1995 included a full year of revenue from Thermal Power Co., which contributed $5.2 million to the increase in total revenue. TPC, which was acquired in September 1994, owns a 25% undivided interest in 604 megawatts of geothermal steam fields at The Geysers.

Record earnings were achieved in spite of curtailments of purchases by the company's major customer, Pacific Gas and Electric Co., due to low gas prices and an abundance of low-cost hydroelectric power.

Earnings before interest, tax, depreciation and amortization increased from $53.7 million in 1994, to $69.5 million in 1995.

1995 Highlights

Commenting on 1995, Ann Curtis, senior vice president, stated, "1995 was an exciting and successful year for Calpine. Against a backdrop of deregulation in the U.S. power market, we made tremendous progress toward our goal of becoming a major nationwide power company.

"In 1995, our asset base grew to more than 550 million, with the acquisition of strategic gas-fired projects in the U.S. and our entry into the international power market with a project in Mexico."

Strategic Business Segments

U.S. Power Market -- In response to the increasingly competitive power industry and to further expand its customer base, Calpine launched an integrated national power marketing unit, Calpine Power Services Co., which received FERC certification in March 1995. The company named Rodney Boucher president and CEO of the new power marketing unit.

Calpine Power Services was recently short-listed to supply approximately 5,000 megawatts of electricity to Oglethorpe Power Corp. This is one of the largest power marketing transactions in the United States.

International Power Market -- The opening of the international power sector to private investment has created new opportunities for power companies like Calpine. The company is initially focusing on geothermal opportunities in Latin America and Southeast Asia where Calpine has a competitive advantage.

Ken Kerr, formerly a senior executive of Magma Power Co. and Dow Chemical Corp., recently joined as senior vice president, responsible for Calpine's international business.

Project Acquisition/Development

Calpine currently has more than 5,000 megawatts of projects under development or evaluation in the United States and in Southeast Asia. Near-term projects under development include: -0-

- King City Facility -- Calpine is currently in final negotiations to acquire a long-term operating lease for a 120-megawatt gas-fired cogeneration facility located in King City, Calif. The facility sells electricity to PG&E under the terms of a 30-year power sales agreement which expires in 2019. The company anticipates finalizing this acquisition in April.

- Pasadena Facility -- The 240-megawatt Pasadena gas-fired cogeneration project is nearing construction, with the plant scheduled to begin commercial operation in 1998. The project will provide 90 megawatts of electricity and roughly 200,000 pounds of steam per hour to Phillips Petroleum's Houston Chemical complex in Pasadena, Texas. The remaining capacity will be marketed to utilities, electric cooperatives and municipalities.

1996 Overview

Calpine is entering 1996 with the strongest project development backlog in the company's history. In addition to expanding its asset base through the strategic development and acquisition of operating facilities, Calpine will further strengthen its integrated power marketing capabilities in the United States to increase revenue and further expand its customer base.

The company will be challenged by curtailment of its Geysers operations due to a surplus of hydro power and low gas prices, which will continue in 1996.

Calpine Corp. is a leading U.S. power company, with operations in selected international markets. The company develops, owns and operates gas-fired and geothermal power generating facilities and is a national power marketer. -0-

                   Calpine Corp. and Subsidiaries
            Condensed Consolidated Statements of Operations
           For the Years Ended Dec. 31, 1995, 1994 and 1993
               (In thousands, except per share amounts)

                                Year Ended  Year Ended  Year Ended
                                  Dec. 31,    Dec. 31,    Dec. 31,
                                    1995       1994         1993

Revenue
Electricity and steam sales       $127,799    $ 90,295    $ 53,000
Service contract revenue
 from related parties                7,153       7,221      16,896
Income (loss) from
 unconsolidated investments in
 power projects                     (2,854)     (2,754)         19
   Total revenue                   132,098      94,762      69,915

Cost of revenue
Plant operating expenses,
 depreciation, production
 royalties and operating
 lease expenses                     71,542      47,299      28,164
Service contract expenses            5,846       5,546      14,337
    Total cost of revenue           77,388      52,845      42,501

Gross profit                        54,710      41,917      27,414

Project development expenses         3,087       1,784       1,280
General and administrative
 expenses                            8,937       7,323       5,080
Provision for write-off of project
 development costs                      --       1,038          --

   Income from operations           42,686      31,772      21,054

Other (income) expense
 Interest expense                   32,154      23,886      13,825
 Other income, net                  (1,895)     (1,988)     (1,133)
   Income before provision for
    income taxes and cumulative
    effect of change in accounting
    principle                       12,427       9,874       8,362
Provision for income taxes           5,049       3,853       4,195

    Income before cumulative
     effect of change in
     accounting principle            7,378       6,021       4,167
Cumulative effect of adoption of
 SFAS No. 109                           --          --        (413)
Net income                         $ 7,378    $  6,021     $ 3,754
Weighted average shares
 outstanding                         2,214       2,177       2,164
Earnings per share
  Income before cumulative effect
   of change in accounting
   principle                       $  3.33     $  2.77     $  1.93
  Cumulative effect of adoption
   of SFAS No. 109                      --          --     $ (0.19)
   Net income                      $  3.33     $  2.77     $  1.74
Depreciation and amortization      $26,896     $21,580     $12,540
EBITDA                             $69,515     $53,707     $42,370

CONTACT: Calpine Corp., San Jose

Katherine Potter, 408/995-5115