Calpine Corporation (OTC Pink Sheets: CPNLQ) announced today that its subsidiary, Otay Mesa Energy Center LLC ("OMEC"), obtained a $377 million credit facility to finance the construction of its 596-megawatt Otay Mesa Energy Center near San Diego, Calif. The project finance facility for this indirect, stand-alone subsidiary is comprised of a construction loan that will convert to a term loan at commercial operations, expected in May 2009. The term loan will mature in April 2019. The loan facilities, jointly arranged by ING Capital LLC and BayernLB, are non-recourse to Calpine, and therefore neither Calpine nor any of its affiliates is responsible for the debt or any obligations of OMEC.

Concurrent with this financing, OMEC has executed a ten-year tolling agreement with San Diego Gas & Electric ("SDG&E") for the full output of the Otay Mesa Energy Center. Under the terms of the agreement, SDG&E will have the ability to dispatch power from the Otay Mesa plant to serve its energy customers, and the utility will supply natural gas to fuel the power plant. The agreement also provides SDG&E the option to purchase the plant at the end of the contract term in 2019. If SDG&E does not exercise its option, under certain circumstances, OMEC has the right to require SDG&E to purchase the plant.

Calpine Chief Executive Officer Robert P. May stated, "As one of California's largest, most environmentally responsible power producers, Calpine is dedicated to developing clean, reliable and cost-effective energy solutions for its customers. This financing will allow Calpine to complete construction for SDG&E of a needed, low-carbon energy resource - demonstrating that Calpine's customers, California and the environment can benefit from the continued development of new power generation facilities like the Otay Mesa Energy Center. We appreciate SDG&E's commitment to the development of clean, reliable power generation. Calpine also is very pleased with the continued support of two of its key relationship banks and looks forward to working with them on future transactions."

Calpine Construction Management Company, Inc. will be responsible for overseeing all aspects of construction for the plant, including management of the project's general contractor, a joint venture between ARB, Inc. and Barton Malow Company, named Otay Mesa Power Partners. Calpine plans to re-commence construction of the plant this month, and will complete start-up, testing and commissioning by May 2009. The company will operate and maintain the plant through its subsidiary, Calpine Operating Services Company, Inc. Comparable to the majority of Calpine's energy centers, the Otay Mesa Energy Center will use a combined-cycle design that will enable it to generate electricity up to 40 percent more efficiently than traditional natural gas-fueled facilities. The project also will incorporate best available emissions control technology significantly reducing emissions.

Calpine in California

Calpine has made an unprecedented investment in California's energy infrastructure through the construction and operation of the state's newest, cleanest and most fuel-efficient fleet of power plants and is the state's single largest renewable power producer. Since July 2001, Calpine has added more than 4,000 megawatts of clean, fuel-efficient capacity in California - an accomplishment unmatched by any other company in the energy industry. The company's fleet of natural gas-fueled, combined-cycle power plants is among the cleanest and most fuel-efficient of its kind, and, unlike traditional renewable resources such as wind and solar, Calpine's renewable geothermal power plants are capable of generating electricity twenty four hours a day, seven days a week. Today, Calpine currently operates 41 power plants in the state, which combined are capable of generating more than 5,250 megawatts of electricity. This is equivalent to almost 10-percent of peak California power demand and is enough electricity to power more than five million Californian households.

About Calpine

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 U.S. 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.

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 and its subsidiaries ("the Company") and its management and uses words such as "believe," "intend," "expect," "anticipate," "plan," "may," "will" and similar expressions to identify forward-looking statements. Such statements include, among others, those concerning the Company's expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results to differ materially from those anticipated in the forward-looking statements. Such risks and uncertainties include, but are not limited to: (i) the risks and uncertainties associated with the Company's Chapter 11 cases and Companies' Creditors Arrangement Act proceedings, including impact on operations; (ii) the Company's ability to attract, retain and motivate key employees and successfully implement new strategies; (iii) the Company's ability to successfully reorganize and emerge from Chapter 11; (iv) the Company's ability to attract and retain customers and counterparties; (v) the Company's ability to implement its business plan; (vi) financial results that may be volatile and may not reflect historical trends; (vii) the Company's ability to manage liquidity needs and comply with financing obligations; (viii) the direct or indirect effects on the Company's business of its impaired credit including increased cash collateral requirements; (ix) the expiration or termination of the Company's power purchase agreements and the related results on revenues; (x) potential volatility in earnings and requirements for cash collateral associated with the use of commodity contracts; (xi) price and supply of natural gas; (xii) risks associated with power project development, acquisition and construction activities; (xiii) risks associated with the operation of power plants, including unscheduled outages of operating plants; (xiv) factors that impact the output of the Company's geothermal resources and generation facilities, including unusual or unexpected steam field well and pipeline maintenance and variables associated with the waste water injection projects that supply added water to the steam reservoir; (xv) quarterly and seasonal fluctuations of the Company's results; (xvi) competition; (xvii) risks associated with marketing and selling power from plants in the evolving energy markets; (xviii) present and possible future claims, litigation and enforcement actions; (xix) effects of the application of laws or regulations, including changes in laws or regulations or the interpretation thereof; and (xx) other risks identified the risk factors identified in its Annual Report on Form 10-K for the year ended December 31, 2006, which can also be found on the Company's website at http://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.