Calpine to Acquire Development Rights for 500-Megawatt Power Plant in Pittsburg, Calif.; Energy Deliveries Scheduled in Time to Meet Peak Summer Demand in 2001.

SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 5, 1999--

Calpine Corporation (NYSE:CPN) announced today that it has entered into an agreement with Enron Capital & Trade Resources (ECT) to acquire the development rights for a 500-megawatt natural gas-fired power plant in Pittsburg, Calif.

The energy facility is in the final stages of permitting and is expected to enter construction in late September upon final licensing by the California Energy Commission (CEC). Energy deliveries are scheduled to begin in June 2001 in time to help meet peak summer power demand.

"This acquisition is part of Calpine's program to develop clean, competitively-priced sources of electricity for Northern Californians," said Calpine's Senior Vice President-Business Development Ron Walter.

"The demand for power is growing rapidly, and shortages are already evident in the San Francisco Bay Area. Environmentally responsible, highly efficient power facilities like the proposed Pittsburg facility are vital for ensuring a reliable and competitive energy market," continued Walter.

The $350 million facility will be built adjacent to USS POSCO Industries, the largest employer in Pittsburg. As a cogenerator, the power plant will provide electricity and industrial steam, totaling approximately 55 megawatts of capacity, to USS POSCO under a long-term agreement. The balance of the plant's output will be sold into California's deregulated electric power market and under bilateral agreements.

Pittsburg Mayor Federal Glover stated, "The Calpine/Enron agreement is a win/win for the Pittsburg community and the greater Bay Area. The city will secure a significant, long-term source of tax revenue to help fund needed community programs, while benefiting from a reliable source of energy to further fuel economic development for Pittsburg and other Contra Costa communities. Calpine has proven itself to be a good corporate neighbor. We look forward to a long and mutually rewarding relationship."

The Calpine and ECT agreement is subject to certain conditions, including receipt of the final licensing from the CEC, which is expected in mid-September. Until that time, ECT will continue to own and be responsible for the project.

"ECT and the City of Pittsburg have done an excellent job in developing the Pittsburg facility. We look forward to building and operating a model energy center for the community and the greater Bay Area," stated Ron Walter.

Greg Piper, managing director of Enron North America, stated, "Enron and the City of Pittsburg are proud to have brought the project to this stage in its development. Calpine has an outstanding track record for power plant development, construction and operations. We feel confident that Calpine will create an exemplary power facility as envisioned by Enron and the City of Pittsburg."

Calpine currently has a separate project in development in Pittsburg at the Dow Chemical Company facility -- the 880-megawatt Delta Energy Center, which Calpine is developing jointly with Bechtel Enterprises Holdings, Inc.

Based in San Jose, Calpine Corporation is a leading independent power company dedicated to providing customers with competitively priced electricity and thermal energy. Calpine currently has approximately 8,500 megawatts of capacity in operation, under construction or in announced development in 12 states -- enough energy to power eight and a half 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, please visit Calpine's 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 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) the assurance that the Company will develop additional plants, (iv) a competitor's development of a lower-cost generating gas-fired power plant or (v) 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.