Gas

Calpine announces plans to build 900-MW Sherry Energy Center in Wisconsin

SAN JOSE, Calif., July 17, 2001— Calpine Corp. announced plans to build a 900-MW electric generating facility called the Sherry Energy Center in Wood County, Wisc.

Calpine has entered into agreements to supply 225 megawatts of electric capacity and energy from the plant to Wisconsin Electric Power Company (WEPCo) and 141 megawatts of electric capacity and energy to Wisconsin Public Service Corporation (WPSC).

The Sherry Energy Center will be located adjacent to the existing Arpin substation on the important Arpin-Eau Claire transmission line.

Fueled by clean natural gas, the 900-megawatt Sherry Energy Center will include a 600- megawatt combined-cycle facility incorporating two combustion turbines and one steam turbine, and a 300-megawatt simple-cycle plant incorporating four combustion turbines. The facility will deliver power to Wisconsin’s grid at a time when the state is in great need of additional generating resources to meet its rapidly growing electric requirements. The Sherry Energy Center will be one of the most fuel-efficient facilities in the state, while having one of the lowest emissions rates.

The power sale agreement with WEPCo is for a term of ten years. Under the agreement, WEPCo will have dispatch rights for 225 megawatts produced by the combined-cycle plant and will manage the purchase and delivery of fuel used to generate power for its use. The power sale to WPSC is also for a term of ten years. Under the WPSC agreement, WPSC will have dispatch rights for two of the simple-cycle units, totaling 141 megawatts, and will manage the purchase and delivery of fuel used to generate power for its use. Calpine will sell the remaining output to other Wisconsin utilities and wholesale power purchasers.

John King, Calpine’s senior vice president, said, “We commend WEPCo and WPSC for making these commitments to secure a vital new source of clean, reliable and affordably priced electricity to help meet Wisconsin’s rapidly growing power demand. We are proud to be working with these two companies to help provide the power supplies that Wisconsin needs.”

Construction of the $470 million Sherry Energy Center is expected to begin during the second quarter of 2002, with commercial operation of the simple-cycle units starting in the second quarter of 2003. The combined-cycle plant is expected to enter commercial operation in the second quarter of 2004. Calpine will manage the construction of the project, and will own and operate the facility as part of its new fleet of fuel-efficient power facilities throughout the United States.

Based in San Jose, Calif., Calpine Corporation is dedicated to providing customers with reliable and competitively priced electricity. Calpine is focused on clean, efficient combined-cycle, natural gas-fired generation and is the world’s largest producer of renewable geothermal energy. Calpine has launched the largest power development program in North America. To date, the company has approximately 34,600 megawatts of base load capacity and 8,000 megawatts of peaking capacity in operation, under construction, pending acquisitions and in announced development in 29 states, the United Kingdom and Canada. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information about Calpine, visit its Website at www.calpine.com.