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Calpine receives court approval to sell Russell City Energy Center

22 September 2006 — The U.S. Bankruptcy Court for the Southern District of New York approved the sale of a 35-percent equity interest in Calpine Corp.’s 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-MW, natural gas-fired power plant to be built in Hayward, Calif. that will help power the San Francisco Bay Area.

Construction of the 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 10-year tolling agreement.