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September 21, 2006

Calpine Recieves Court Approval to Sell An Interest in Its Russell City Energy Center to GE Energy Financial Services

SAN JOSE, CALIF., Sep 21, 2006 —

The U.S. Bankruptcy Court for the Southern District of New York today approved the sale of a 35–percent equity interest in Calpine Corporation's [OTC Pink Sheets: CPNLQ] Russell City Energy Center to GE Energy Financial Services for approximately $44 million. Calpine will own the remaining 65–percent interest. GE Energy Financial Services' equity will be applied toward completion of development and construction of the power plant, and it also will provide related credit support for the project. The Russell City Energy Center is a proposed 600–megawatt, natural gas–fired power plant to be built in Hayward, Calif. that will help power the San Francisco Bay Area.

"With the growing demand for power in California, especially the Bay Area, the Russell City Energy Center is well positioned to help meet demand in a manner that is environmentally friendly and cost–effective," stated Calpine Chief Executive Officer Robert P. May. "Calpine looks forward to building upon our long–term relationship with GE. With a strong record of achievement in the power industry, GE Energy Financial Services will be a valued strategic partner to Calpine."

"Russell City represents a unique opportunity to invest in a critical new–build generation facility in the highly sought–after California market," said Leanne Bell, Managing Director for Power at GE Energy Financial Services. "This investment will help California meet its power needs and is consistent with our growth strategy. GE Energy Financial Services also values the opportunity to partner with Calpine, an experienced developer familiar with the California market."

Construction of the fuel–efficient, combined–cycle power plant is scheduled to begin by the spring of 2008 and to be completed in mid–2010, in time to help meet peak electricity summer demand. In March 2006, a Calpine affiliate agreed in a letter of intent to sell the Russell City Energy Center's full output to Pacific Gas and Electric Company (PG&E). Calpine and PG&E expect to replace the letter of intent in October 2006 with a ten–year tolling agreement.

About GE

GE (NYSE: GE) is Imagination at Work –– a diversified technology, media and financial services company focused on solving some of the world?s toughest problems. With products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and advanced materials, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit www.ge.com.

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 North American power company, capable of delivering more than 26,000 megawatts of clean, reliable and fuel–efficient electricity to customers and communities in 20 U.S. states and three Canadian provinces. The company owns, leases and operates fuel–efficient natural gas–fired and renewable geothermal power plants. Please visit www.calpine.com for more information.

CONTACTS:

GE Energy Financial Services: Andy Katell, 203–961–5773

Calpine Corporation:
Media Relations, Katherine Potter, 408–792–1168, or kpotter@calpine.com

Investors Relations, Karen Bunton, 408–792–1121, or karenb@calpine.com

Calpine Corporation Forward–Looking Statement:
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. 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 Company's ability to continue as a going concern; (ii) the ability of the Company to operate pursuant to the terms of the debtor–in–possession facility; (iii) the Company's ability to obtain court approval with respect to motions in the Chapter 11 proceeding prosecuted by it from time to time; (iv) the ability of the Company to develop, execute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases; (v) risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; (vi) the ability of the Company to obtain and maintain normal terms with vendors and service providers; (vii) the Company's ability to maintain contracts that are critical to its operations; (viii) the potential adverse impact of the Chapter 11 cases on the Company's liquidity or results of operations; (ix) the ability of the Company to fund and execute its business plan;(x) the ability of the Company to attract, motivate and/or retain key executives and associates; (xi) the ability of the Company to attract and retain customers and (xii) other risks identified from time–to–time in the Company's 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, 2005, and its Quarterly Report on Form 10–Q for the quarter ended June 30,2006, which can also be found on the Company's website at www.calpine.com. All information

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