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Calpine announces sale of up to 300 MW to Brazos Electric Power Cooperative

Two-year agreement provides electric service for Texas cooperative customers

SAN JOSE, Calif., May 9, 2003 — Calpine Corp., a North American power company and the largest independent producer in Texas, announced that it has signed a two-year agreement to provide up to 300 megawatts of power to Brazos Electric Power Cooperative, Inc. (Brazos Electric).

Calpine will supply Brazos Electric with clean, reliable electricity through its fully integrated system of energy-efficient power plants strategically located throughout the Electric Reliability Council of Texas (ERCOT). This agreement is customized to meet Brazos Electric’s unique energy requirements, adding greater flexibility and ensuring higher reliability for the cooperative’s customers.

Power deliveries will begin during the first quarter of 2004. Calpine will receive energy payments based on varying peak and off-peak fixed heat rates, plus a fixed-capacity payment.

“To best serve Brazos Electric’s energy requirements, Calpine created a 300-megawatt ‘virtual power plant.’ This product is designed to provide maximum operational flexibility and reliability in an economic and environmentally responsible manner,” said Calpine’s Vice President of Power Marketing Carey Jordan. “The structure of the ERCOT wholesale market enables Calpine to provide customers with custom-tailored energy products and access to our system of clean, cost-competitive electric-generating facilities.”

Rather than supplying Brazos Electric from a single operating plant, which could result in certain operating limitations, Calpine’s “virtual power plant” gives Brazos Electric maximum flexibility and system reliability, backed by Calpine’s 6,000-megawatt system of power plants located throughout the ERCOT market. Further, Calpine eliminates outage risks and price volatility for the customer by supplying 100 percent firm on-peak and off-peak power and by eliminating the need to purchase power in the spot market.

In addition to serving Brazos Electric, Calpine provides various products to other ERCOT customers, including Reliant Resources, Magic Valley Electric Cooperative and new retail electric providers entering the retail market. Calpine’s portfolio and full array of energy products allows Calpine to develop high-value product structures, manage risk, sell firm products and provide competitive pricing.

By June of 2004, Calpine will add an additional 1,000 megawatts of capacity in ERCOT, bringing the company’s total portfolio to more than 7,000 megawatts of generation. The company employs approximately 750 Texas residents to meet the power demands of large utilities, municipals, cooperatives and industrial customers.

Calpine’s modern fleet of highly efficient power plants incorporates fuel-efficient combined-cycle technology and state-of-the-art emissions-reduction controls. According to the Environmental Protection Agency’s data, Calpine’s fleet of new combined-cycle facilities consistently outperforms the average Texas fossil-fueled power plant in curbing emissions that contribute to the formation of ozone, greenhouse gases and acid rain. Compared to the average Texas fossil-fueled power plant, Calpine’s facilities generate 88 percent less nitrogen oxide, 50 percent less carbon dioxide, and nearly 100 percent less sulfur dioxide emissions.

About Calpine

Based in San Jose, Calif., Calpine Corporation is an independent power company dedicated to providing clean, efficient, natural gas-fired power generation. It generates and markets power through plants it develops, owns and operates 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, owning approximately one 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. For more information, visit Calpine’s website at www.calpine.com.