Calpine in Negotiations to Acquire Unocal Steam Fields; Company Announces Plans to Acquire PG&E Sonoma Geothermal Power Plants.

SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 12, 1999--Calpine Corporation (NYSE:CPN), the San Jose, Calif.-based independent power company, today announced it is in negotiations to acquire Unocal Corporation's geothermal steam field assets located at The Geysers area of Northern California -- the world's largest producing geothermal resource.

Calpine currently holds a 25 percent interest in the 14,000-acre steam field operation through its joint venture with Unocal. The steam field fuels Pacific Gas and Electric Company's (PG&E) 12 Sonoma County power plants, totaling 544 megawatts of capacity. The Unocal acquisition is expected to close within the next two months. n bid for these assets. In December 1998, Calpi PG&E acquisitions, Calpine will own and operate over 800 megawatts of low-cost geothermal production. The coed Geysers consolidation program, Calpine is unlong-term goal of unifying Geysers steam field and power plant operations; maximizing efficiency, lowering co. The company has been an active participant atvative programs to extend resource production. Iing regions of The Geysers reservoir. The wasteurther extend resource production.

Calpine Corporation is a leading independent power company dedicated to providing customers with low-cost electricity and thermal energy throughout the U.S. Calpine currently has 5,900 megawatts of capacity in operation, under construction or in development. The company was founded in San Jose, Calif. in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information, please visit Calpine's website at www.calpine.com.

The matters discussed in this news release may be considered "forward looking" statements within the meaning of Section 27A of the Securities and Exchange Act of 1993, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include declarations regarding the intent, belief or current expectations of 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; actual results could differ materially from those indicated by such forward-looking statements. Among the important factors that could cause results to differ materially from those indicated by such forward-looking statements are: (i) that the information is of a preliminary nature and may be subject to further adjustments, (ii) risks associated with power plant and steam field acquisitions, (iii) changes in government regulation, (iv) general operating risks, (v) the dependence on third parties, (vi) the dependence on senior management and (vii) other risks identified from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission.