Calpine acquires interest in 827 MW of gas-fired plants; company becomes major Texas independent power producer.

SAN JOSE, Calif.--(BUSINESS WIRE)--June 24, 1997--Calpine Corporation (NYSE:CPN), the San Jose-based power company, today announced it has purchased a 50% interest in two gas-fired power plants with a combined capacity of 827 megawatts.

Calpine purchased the interest in the Texas plants for $35.4 million from a subsidiary of Houston, TX-based Enron Corp. In a separate agreement with the projects' lenders, the company purchased all outstanding non-recourse project debt totaling $155.6 million.

Calpine has assumed the operations and maintenance of the 450 megawatt Texas City Power Plant, located in Texas City, and the 377 megawatt Clear Lake Power Plant in Pasadena.

As a result of this acquisition, and the recently announced addition of two East Coast power plants, Calpine will increase its net ownership interest in power facilities to 1,582 megawatts.

As announced in March 1997, the company entered into a purchase agreement with Enron to acquire its interest in Enron/Dominion Cogen Corp., owner of the two gas-fired plants. Dominion Cogen, Inc., a subsidiary of Richmond, VA-based Dominion Resources, Inc., owns the remaining 50% interest.

The acquisition of the power plants and outstanding project debt was financed with $125.0 million of non-recourse debt provided by The Bank of Nova Scotia and approximately $70.0 million of equity from Calpine.

Peter Cartwright, president of Calpine, stated, "This strategic acquisition makes Calpine a leading independent power producer in the Texas market. Including the 240 megawatt Pasadena Power Plant, which Calpine will bring on line in 1998, the three Texas power plants will generate more than 1,000 megawatts of low-cost, reliable electricity." Calpine's new power assets include: -0-

--The Texas City Power Plant -- In operation since 1987, Texas City is a natural gas-fired, combined-cycle cogeneration facility. The plant sells electricity to Texas Utilities Electric Company and Union Carbide Corporation under contracts extending through 1999. In addition to electricity, Texas City also provides thermal energy to Union Carbide's chemical plant.

--The Clear Lake Power Plant -- A natural gas-fired, combined- cycle cogeneration facility, Clear Lake entered commercial operation in 1984. Electricity is sold to Texas New Mexico Power Company, Houston Lighting & Power Company, and Hoescht Celanese Chemical Group, Inc. under three long-term contracts extending through 2004- 2005. As a cogenerator, the plant also provides thermal energy to Hoescht Celanese's chemical plant. -0-

Recognizing the significance of the Texas power market, Calpine has opened a regional office in Houston.

Calpine Corporation is a leading power company providing electricity and thermal energy to customers in the U.S. and selected international markets. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN.

CONTACT: Calpine Corporation

Katherine Potter, 408/995-5115

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