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Calpine Announces Bidding Results for Sale of Partially Completed Power Plant in Fremont, Ohio

01/29/2008

SAN JOSE, Calif., and HOUSTON, Jan. 29 /PRNewswire-FirstCall/ -- Calpine Corporation (Pink Sheets: CPNLQ) and its affiliated debtors and debtors in possession (collectively, "Calpine") announced today that it has successfully completed a Court-approved bidding process for a partially completed power plant located in Fremont, Ohio (the Fremont Project). Pursuant to a sale auction held Jan. 28, 2008, Calpine received a high bid of $253.6 million from FirstEnergy Generation Corp.

The high bid exceeds the initially proposed sale price of $124 million as established by an Asset Purchase Agreement dated Nov. 16, 2007 between Calpine and American Municipal Power -- Ohio, Inc. Calpine will seek final approval for the sale from the U.S. Bankruptcy Court for the Southern District of New York on Jan. 30, with closing anticipated to occur in February 2008.

"The Fremont Project was determined to be a non-strategic asset in the context of our successful Chapter 11 restructuring," according to Robert P. May, Calpine's Chief Executive Officer. "We are extremely pleased with the bidding results for the divestiture of this asset and are now looking ahead to emerging from bankruptcy in the very near future as a stronger and more competitive power company."

The Fremont Project is a partially completed natural gas-fueled power plant located in Fremont, (Sandusky County) Ohio. Fremont is a clean and highly efficient combined-cycle generating facility capable of generating 550- megawatts of baseload capacity and up to 700-megawatts of total capacity. Calpine initiated construction activities at the site in 2001 but subsequently placed the project on hold due to adverse market conditions.

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, currently capable of delivering nearly 24,000 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.

Forward Looking Information

In addition to historical information, this release contains forward- looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. We use 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 our expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You 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 our Chapter 11 cases and Companies' Creditors Arrangement Act (CCAA) proceedings of certain of Calpine's Canadian affiliates, including our ability to successfully reorganize and emerge from Chapter 11; (ii) our ability to implement our business plan; (iii) financial results that may be volatile and may not reflect historical trends; (iv) seasonal fluctuations of our results; (v) potential volatility in earnings associated with fluctuations in prices for commodities such as natural gas and power; (vi) our ability to manage liquidity needs and comply with covenants related to our existing financing obligations and anticipated exit financing; (vii) the direct or indirect effects on our business of our impaired credit including increased cash collateral requirements in connection with the use of commodity contracts; (viii) transportation of natural gas and transmission of electricity; (ix) the expiration or termination of our power purchase agreements and the related results on revenues; (x) risks associated with the operation of power plants including unscheduled outages; (xi) factors that impact the output of our 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; (xii) risks associated with power project development and construction activities; (xiii) our ability to attract, retain and motivate key employees; (xiv) our ability to attract and retain customers and contract counterparties; (xv) competition; (xvi) risks associated with marketing and selling power from plants in the evolving energy markets; (xvii) present and possible future claims, litigation and enforcement actions; (xviii) effects of the application of laws or regulations, including changes in laws or regulations or the interpretation thereof; and (xix) other risks identified from time-to-time in Calpine's reports and registration statements filed with the SEC, including, without limitation, the risk factors identified in its Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10-Q. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements and Calpine undertakes no obligation to update any such statements. Unless specified otherwise, all information set forth in this release is as of today's date and Calpine undertakes no duty to update this information. For additional information about Calpine's chapter 11 reorganization or general business operations, please refer to Calpine's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, Calpine's Quarterly Reports on Form 10-Q, and any other recent Calpine report to the Securities and Exchange Commission. These filings are available by visiting the Securities and Exchange Commission's website at http://www.sec.gov or Calpine's website at http://www.calpine.com .

SOURCE Calpine Corporation 
CONTACT: Media Relations, Mel Scott, +1-713-570-4553,
scottm@calpine.com, or Investor Relations, Norma Dunn, +1-713-830-8883,
norma.dunn@calpine.com, both of Calpine Corporation/
Web site: http://www.calpine.com