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Calpine Comments on NRG Unsolicited Proposal

05/21/2008

Calpine Advises Shareholders to Take No Action at This Time

HOUSTON & SAN JOSE, Calif.--(BUSINESS WIRE)--May 21, 2008--Calpine Corporation (NYSE:CPN) today confirmed that on May 14, 2008, it received an unsolicited proposal from NRG Energy, Inc. (NYSE:NRG) regarding a potential combination between Calpine and NRG. The terms of NRG's proposal included an all-stock merger transaction at a fixed exchange ratio of 0.534x, which implies a premium of 6.7% based on the closing prices of both companies' stocks as of today, May 21, 2008.

Consistent with its fiduciary duties and in consultation with its financial advisor and legal counsel, Calpine's Board of Directors will continue to review the NRG proposal to determine if it is in the best interest of Calpine's shareholders. Calpine said that its shareholders need not take any action at this time.

Goldman Sachs & Co is serving as financial advisor to Calpine, and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel.

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, 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 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.

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. Words such as "believe," "intend," "expect," "anticipate," "plan," "may," "will" and similar expressions identify forward-looking statements. Such statements include, among others, those concerning 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) Calpine's ability to implement its business plan; (ii) financial results that may be volatile and may not reflect historical trends; (iii) seasonal fluctuations of results and exposure to variations in weather patterns; (iv) potential volatility in earnings associated with fluctuations in prices for commodities such as natural gas and power; (v) ability to manage liquidity needs and comply with covenants related to the Exit Credit Facility and other existing financing obligations; (vi) Calpine's ability to complete the implementation of its Plan of Reorganization and the discharge of its chapter 11 cases including successfully resolving any remaining claims; (vii) disruptions in or limitations on the transportation of natural gas and transmission of electricity; (viii) the expiration or termination of power purchase agreements and the related results on revenues; (ix) risks associated with the operation of power plants including unscheduled outages; (x) factors that impact the output of Calpine'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; (xi) risks associated with power project development and construction activities; (xii) ability to attract, retain and motivate key employees including filling certain significant positions within Calpine's management team; (xiii) ability to attract and retain customers and counterparties; (xiv) competition; (xv) risks associated with marketing and selling power from plants in the evolving energy markets; (xvi) present and possible future claims, litigation and enforcement actions; (xvii) effects of the application of laws or regulations, including changes in laws or regulations or the interpretation thereof; and (xviii) 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, 2007. 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, 2007, 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.

CONTACT: Calpine Corporation 
Media Relations:
Mel Scott, 713-570-4553
scottm@calpine.com
or
Investor Relations:
Andre K. Walker, 713-830-8775
andrew@calpine.com
or
Wilkinson Brimmer Katcher
Joele Frank or Ed Trissel, 212-355-4449

SOURCE: Calpine Corporation