SAN JOSE, CA - Calpine Corporation [NYSE:CPN] has completed the purchase of the Brazos Valley Power Plant in Fort Bend County, Texas, for approximately $175 million. Fueled by natural gas, the combined-cycle facility is designed to generate 570 megawatts of electricity for the growing Texas power market.

Calpine's wholly owned subsidiary, Calpine Construction Finance Company, L.P. (CCFC I), acquired the companies that owned the Brazos Valley project with net proceeds of approximately $150 million from the January sale of its half-interest in the Lost Pines 1 Power Project. As a result, CCFC I had the opportunity to defer tax liability by conducting a like-kind exchange. With the expected cash flow and earnings from the plant, the acquisition represented the best investment opportunity for Calpine, CCFC I and CCFC I bondholders, who consented to the acquisition.

Peter Gross, vice president, Calpine marketing and sales, said the deal was financially advantageous, noting, "The addition of Brazos Valley to Calpine's portfolio will provide further opportunities to enhance the efficiencies of our operating system, lower our cost of production and better meet our customers' needs."

Calpine is the largest independent power producer in ERCOT and has the cleanest, most fuel-efficient fleet of natural gas-fired facilities. With this transaction, Calpine has 11 power plants in ERCOT, capable of generating more than 6,700 megawatts of electricity for the growing ERCOT market. The company's system of plants is designed to sell power under both short- and long-term contracts to wholesale and industrial power customers.

Brazos Valley is located about 25 miles southwest of Houston. It entered commercial operations in July 2003 and is powered by two General Electric 7FA turbines.

CCFC1 acquired Brazos Valley from a consortium of banks that had provided construction financing for the power plant and had taken possession of the plant from the original developer in 2003.

Calpine Corporation, celebrating its 20th year in power in 2004, is a leading North American power company dedicated to providing electric power to wholesale and industrial customers from clean, efficient, natural gas-fired and geothermal power facilities. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom and is building a plant in Mexico. Calpine is also the world's largest producer of renewable geothermal energy, and owns or controls approximately one trillion cubic feet equivalent of proved natural gas reserves in the United States and Canada. For more information about Calpine, visit 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. You 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 laws and regulations, (ii) the results of proceedings before regulatory bodies or courts with jurisdiction over the project, and, (iii) other market responses of competitors. You 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, including the risk factors identified in its Annual Report on Form 10-K for the year ended December 31, 2003, which also can be found on the Company's website at www.calpine.com. All information set forth in this news release is as of today's date, and the Company undertakes no duty to update this information.

Calpine Corporation

Calpine Corporation

Calpine Corporation is helping meet the needs of an economy that demands more and cleaner sources of electricity. Founded in 1984, Calpine is a major U.S. power company, capable of delivering nearly 25,000 megawatts of clean, cost-effective, reliable and fuel-efficient electricity to customers and communities in 18 states in the United States. The company owns, leases and operates low-carbon, natural gas-fired and renewable geothermal power plants. Using advanced technologies, Calpine generates electricity in a reliable and environmentally responsible manner for the customers and communities it serves. Please visit http://www.calpine.com for more information.

More from Calpine Corporation