CPN Calpine Corp.

Mountainview Decision a Threat to California Economy Calpine Requests FERC to Re-Evaluate Decision on Highly Suspect Utility Transaction SAN JOSE, Calif., March 30 /PRNewswire-FirstCall/ -- In order to help establish a fair, open, and transparent power market in California and prevent inflated power costs from impacting the state's economy and utility ratepayers for the next 30 years, Calpine Corporation has petitioned the Federal Energy Regulatory Commission (FERC) to rehear its decision approving the Mountainview power plant transaction between Southern California Edison (Edison) and an unregulated subsidiary. Calpine views the Mountainview transaction to be a highly suspect arrangement that burdens California ratepayers with power priced hundreds of millions of dollars over viable alternatives. Also very troubling to Calpine, Mountainview shifts responsibility for cost over-runs associated with the construction and operation of the facility to consumers, potentially further increasing the cost of power to California consumers. According to public records, the more recent large, utility power projects built in California resulted in more than $9 billion in cost over-runs. "California needs new power plants built, but the Mountainview deal makes a bad situation worse," said Calpine Vice President Curt Hildebrand. "Mountainview's costs saddle us all with an unnecessarily high price for power. As Californians, we need to encourage new industries to locate their facilities in California and discourage companies from leaving our state. Mountainview, as currently structured, will continue to burden California ratepayers with higher power costs compared to our neighboring states." In the filing, Calpine cites its concern regarding utility self-dealing and non-competitive affiliate transactions at the expense of ratepayers and the negative impacts on California's economy. Calpine is not alone in voicing such concerns. FERC acknowledges in its February 25th Order on Mountainview, that in affiliate transactions there is the potential for "abuse of self- dealing" as well as "long-term harm to the wholesale competitive market." Such statements validate Calpine's objections to the approval of the Mountainview transaction. The alternative to the ill-conceived Mountainview deal is fair and open bidding. A fair and open process for procuring long-term energy contracts is the best way to attract the investment capital California needs to build power plants, and guarantees utility consumers the lowest cost electricity. Moreover, competition shifts the significant risks of cost overruns away from ratepayers. "As Californians, we should all be joining with Governor Schwarzenegger in looking for ways to make our state a more attractive location for new investment, new industry and new jobs," Hildebrand said. "By burdening Californians with unnecessarily high power costs for years to come, the Mountainview deal is a significant step in the wrong direction in the drive for a more competitive, investment-friendly business climate." Cost over-runs by utilities traditionally are borne by customers. The same is true for Mountainview. Not only are Edison customers responsible for the project's inflated power costs, they are also responsible for cost over- runs the utility incurs in building and operating the project. History shows, as well, that utility cost over-runs are common. According to public records detailing the construction of the more recent utility-built power projects in California -- Diablo Canyon, Helms Pumped Storage, and San Onofre Nuclear Generating Station 2&3 -- costs surpassed initial estimates by 1,670 percent, 360 percent, and 930 percent, respectively. A competitive solicitation for the power Edison needswould deliver all the benefits of the Mountainview project with considerable savings to the California economy. FERC's efforts to ensure that adequate supplies of power are available to California are commendable, but the open-ended costs and risks associated with Mountainview, without the protection of continuing regulatory oversight by the California Public Utilities Commission, warrant a re-evaluation of the project. Calpine's Track Record in California San Jose-based Calpine has made an unprecedented $5 billion investment in California's energy infrastructure through the construction and operation of the state's newest, cleanest and most efficient fleet of power projects. The state's single largest producer of power from renewable resources, Calpine is also the first company to license and construct a major California power project in more than a decade and is responsible for the first baseload generation built in the San Francisco Bay Area in more than 30 years. Since July 2001, Calpinehas added almost 2,500 megawatts of new capacity in California -- an accomplishment unmatched by any other company in the energy industry. When the state asked for long-term, fixed-price contracts, Calpine was the first generator to step forward with stable, low-priced power. When the crisis eased, Calpine volunteered to restructure these contracts to better suit California's needs. About Calpine 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, the United Kingdom, and it is building a power 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. The company is listed on the S&P 500, and was named FORTUNE's 2004 America's Most Admired Energy Company. Calpine was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information about Calpine, visit http://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) the timing and extent of deregulation of energy markets and the rules and regulations adopted on a transitional basis with respect thereto; (ii) commercial operations of new plants that may be delayed or prevented because of various development and construction risks, such as a failure to obtain the necessary permits to operate, failure of third-party contractors to perform their contractual obligations or failure to obtain financing on acceptable terms; (iii) unscheduled outages of operating plants; (iv) cost estimates are preliminary and actual costs may be higher than estimated; (v) a competitor's development of lower cost generating gas-fired power plants; (vi) risks associated with marketing and selling power from power plants in the newly-competitive energy market; and (vii) other risks identified from time-to-time in our reports and registration statements filed with the SEC, including the risk factors identified in its Annual Report on Form 10-K for the year ended December 31, 2002, its Form 8-K filed on Oct. 23, 2003 and its quarterly report on Form 10-Q for the quarter ended September 30, 2003, which can 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. DATASOURCE: Calpine Corporation CONTACT: media, Kent Robertson, +1-408-621-1447, or investors, Karen Bunton, +1-408-995-5115 ext. 1121, both of Calpine Corporation Web site: http://www.calpine.com/

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