Two New Calpine Power Plants Begin Commercial Operations in California

  Two New Calpine Power Plants Begin Commercial Operations in California

     Russell City and Los Esteros Represent more than 900 MW of Capacity

Business Wire

HOUSTON -- August 13, 2013

Calpine Corporation (NYSE:CPN) has successfully commenced commercial
operations at its Russell City Energy Center and Los Esteros Critical Energy
Facility, both located in the San Francisco Bay area. Together, the two plants
bring on-line more than 900 megawatts of modern, efficient and environmentally
responsible combined-cycle natural gas-fired power generation capacity capable
of meeting the electric needs of about 750,000 households. The full power
output of both plants will be delivered to Calpine’s customer, Pacific Gas and
Electric Company (PG&E), which will also supply the natural gas fuel, under
10-year power purchase agreements.

“We are most pleased to begin commercial operations at these two plants with
proven state-of-the-art technology,” said Jack Fusco, Calpine’s Chief
Executive Officer. “Bringing this new capacity on-line demonstrates Calpine’s
continued commitment to helping meet the power needs of our customers and,
importantly, to helping ensure the grid’s reliability by producing flexible,
natural gas-fired capacity so critical to the challenges posed by integration
of intermittent renewable resources such as wind and solar. We are
particularly proud of the environmental attributes of these facilities, with
Russell City being the nation’s first power plant to volunteer to accept a
permit with a limit on greenhouse gas emissions. In addition, the two plants
together will use up to 6 million gallons of recycled wastewater from the
local municipalities that would otherwise be discharged into the San Francisco
Bay.”

The innovative 619-megawatt Russell City Energy Center, located in Hayward,
California, uses the most advanced emissions control technology available
today for a natural gas-fired power plant. The fuel-efficient, combined-cycle
configuration allows Russell City Energy Center to respond to dynamic grid
conditions while still minimizing greenhouse gas emissions. Additionally, the
zero-liquid discharge plant will conserve water by using reclaimed wastewater
from the City of Hayward’s Water Pollution Control Facility for all cooling
and boiler makeup. This environmentally responsible process will prevent up to
four million gallons of wastewater from being discharged into San Francisco
Bay each day.

Calpine owns 75% of the project, or 464 megawatts of dispatchable capacity,
and GE (NYSE:GE) unit GE Energy Financial Services owns the balance.

“Beginning commercial operations at Russell City is the culmination of years
of work with our long-term development partner Calpine, and reflects our
commitment to providing our expertise and capital to build America’s critical
energy infrastructure,” said Alex Urquhart, president and CEO of GE Energy
Financial Services.

Approximately 650 local union workers were employed during peak construction
at Russell City, and the plant now employs 30 full-time operations staff. The
plant has generated more than $25 million to date in initial sales and
property tax revenue, and recurring property tax revenues during operation are
estimated at approximately $5 million annually to help fund local government
services.

Located in San Jose, the Los Esteros Critical Energy Facility first began
commercial operations in March 2003 as a 188-megawatt peaking power plant. The
plant has now been upgraded to a combined-cycle facility capable of generating
up to 309 megawatts. The upgrade and addition of heat-recovery steam
generators and a steam turbine generator not only increases the plant’s
generation capacity, it improves efficiency and environmental performance. The
plant’s unique configuration enables a high degree of flexibility in
generation output. It can ramp up and down quickly as the grid demands and
remains capable of operating much like a peaking facility if needed. By using
recycled wastewater from the San José-Santa Clara Regional Wastewater
Facility, Los Esteros also will prevent up to an additional two million
gallons per day from being discharged into San Francisco Bay.

Construction at Los Esteros employed approximately 300 local union workers at
its peak. With the plant now commercially operational, 19 employees work on
site full time, and another four serve Los Esteros in addition to other nearby
Calpine plants. The upgraded plant is expected to contribute approximately $3
million annually in recurring tax revenues to local governments and generated
approximately $5 million in one-time tax revenue as a result of the
construction upgrade.

“Achieving commercial operations for these plants represents years of
sustained effort by dozens of Calpine employees and contractors, and we are
grateful for their dedication,” Mr. Fusco said. “These additions bring our
total to 37 power plants in California with the capacity to generate more than
6,300 megawatts, including over 5,600 megawatts of natural gas-fired
generation and 725 megawatts of renewable, baseload geothermal capacity at The
Geysers.”

About Calpine

Calpine Corporation generates more electricity than any other independent
power producer in America, with a fleet of 93 power plants in operation or
under construction, representing more than 28,000 megawatts of generation
capacity. Serving customers in 20 states and Canada, we specialize in
developing, constructing, owning and operating natural gas-fired and renewable
geothermal power plants that use advanced technologies to generate power in a
low-carbon and environmentally responsible manner. Our clean, efficient,
modern and flexible fleet is uniquely positioned to benefit from the secular
trends affecting our industry, including the abundant and affordable supply of
clean natural gas, stricter environmental regulation, aging power generation
infrastructure and the increasing need for dispatchable power plants to
successfully integrate intermittent renewables into the grid. We focus on
competitive wholesale power markets and advocate for market-driven solutions
that result in nondiscriminatory forward price signals for investors. Please
visit www.calpine.com to learn more about why Calpine is a generation ahead –
today.

Forward-Looking Information

In addition to historical information, this release contains 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.
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 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. Please see the risks identified in this release or
in Calpine’s reports and registration statements filed with the Securities and
Exchange Commission, including, without limitation, the risk factors
identified in its Annual Report on Form 10-K for the year ended Dec. 31, 2012.
These filings are available by visiting the Securities and Exchange
Commission’s website at www.sec.gov or Calpine’s website at www.calpine.com.
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.

Contact:

Calpine Corporation
Media Relations:
Norma F. Dunn, 713-830-8883
norma.dunn@calpine.com
or
Investor Relations:
Bryan Kimzey, 713-830-8775
bryan.kimzey@calpine.com