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October 11, 2006

Calpine Sells Its Entire Leasehold Interest in the Fox Energy Center to GE Energy Financial Services

KAUKAUNA, WIS., Oct 11, 2006 —

Calpine Corporation [OTC Pink Sheets: CPNLQ] announced today that one of its non–debtor subsidiaries has completed the sale of its entire leasehold interest in the 560–megawatt Fox Energy Center, located in Kaukauna, Wis., to affiliates of GE Energy Financial Services, the plant's owner/lessor. With this sale, Calpine continues to advance its Chapter 11 restructuring program to strengthen its business – financially and operationally – and to position the company for future growth.

The Fox Energy Center is a natural gas–fired, combined–cycle facility that supplies electricity to Wisconsin Public Service Corporation under a ten–year power sales agreement. In consideration of the sale, Calpine receives a cash payment from GE Energy Financial Services of approximately $16.3 million and eliminates approximately $352.3 million of obligations under a non–recourse sale/leaseback transaction.

Robert P. May, Calpine's Chief Executive Officer, stated, "The sale of the Fox Energy Center will enhance Calpine's liquidity and reduce project debt, allowing Calpine to further focus its resources on our core power and trading operations. As part of our restructuring, Calpine continues to evaluate every aspect of our power and contractual portfolio. Our goal is to determine the right asset base and market mix to achieve near–term results while positioning Calpine for long–term growth."

Calpine operated, maintained and held a leasehold interest in the facility through its subsidiary, CPN Fox. Another business unit of GE, GE Energy, has hired all of Calpine's former Fox Energy Center personnel to continue to operate and maintain the power plant. The U.S. Bankruptcy Court for the Southern District of New York and the Federal Energy Regulatory Commission have approved the sale.

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 nearly 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 integrated systems of fuel–efficient natural gas–fired and renewable geothermal power plants. Please visit www.calpine.com for more information.

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 set forth in this news release is as of today's date, and the Company undertakes no duty to update this information.

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