Calpine’s Los Esteros Critical Energy Facility in commercial operation

SAN JOSE, Calif., March 31, 2003 — Calpine Corp. announced that its Los Esteros Critical Energy Facility has begun commercial operation. The state-of-the-art electric-generating facility can currently produce as much as 180 megawatts of electricity for peak demand periods and is contracted to deliver power to the California Department of Water Resources (DWR) through March 2006.

As a part of its plan to prevent future blackouts, the State of California engaged Calpine to build a series of “peaker” projects – facilities only operated at high-demand periods. The Los Esteros site was identified as being critical to supporting Silicon Valley’s power needs. The California Independent System Operator identified the San Jose area as being among the most generation-deficient areas in the state and among the most vulnerable metropolitan areas in Northern California.

The largest addition to Silicon Valley’s generating capacity to date, Los Esteros should help address the power supply imbalance. “As a San Jose-based company, Calpine is uniquely positioned to develop energy solutions suited to Silicon Valley’s needs,” said Bob Fishman, Calpine senior vice president. “Silicon Valley has long been dependent upon imported electricity. By locating Los Esteros close to the power demand, Calpine can help overcome electricity transmission constraints as well as addressing supply issues.”

Under the three-year DWR contract, Calpine will operate as many as 4,000 hours annually under the contract and receive fixed annual capacity payments averaging $38.8 million based off of current capacity. Calpine retains the opportunity to operate the Los Esteros project on a merchant basis during times it is not called upon by the State.

Calpine has made an unprecedented investment in California’s energy infrastructure through the construction and operation of the state’s newest, cleanest, and most efficient fleet of power projects. Since July 2001, Calpine has added more than 2,500 megawatts of new capacity in California — an accomplishment unmatched by any other company. Calpine has almost 3,900 megawatts in operation and more than 2,000 megawatts under construction throughout the state.

Calpine Corporation is a North American power company dedicated to providing wholesale and industrial customers with clean, efficient, natural gas-fired and geothermal power generation. It generates and markets power through plants it owns, operates, leases, and develops in 23 states in the United States, three provinces in Canada and in the United Kingdom.

Calpine is also the world’s largest producer of renewable geothermal energy, and it owns approximately 1 trillion cubic feet equivalent of proved natural gas reserves in Canada and the United States. 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.