Recent Newsletter's Interpretation of Financial Results is Incorrect

(SAN JOSE, CALIF.) March 27, 2000-Calpine Corporation [NYSE:CPN], one of the nation's fastest growing power companies, reported today that recently announced projects put the company ahead of schedule to achieve its current growth objectives. In spite of this progress, an independent newsletter issued March 24, 2000 portrayed Calpine's financial position in an inaccurate and misleading fashion.

"Calpine is a leader in the U.S. power industry. Our current project portfolio includes 70 projects in operation, construction or development, totaling approximately 17,000 megawatts. This is an enormous program that will continue to grow and provide significant long-term value as we move toward our goal of having over 25,000 megawatts in operation by the end of 2004," stated Calpine Chairman, President and CEO Peter Cartwright. "Our current operating portfolio continues to perform ahead of our expectations, and we expect to exceed the current First Call consensus for earnings per share in 2000 of $2.26-31% higher than 1999 results," continued Cartwright.

"I want to assure our investors of the quality of our reported earnings, and toward that end we make the following observations," added Cartwright.

Calpine currently has 26 power plants under construction or in announced development, compared to eight plants at the beginning of 1999. With this growth in the development program, the company incurred $77.6 million in capitalized interest and development costs in 1999, a significant increase from 1998. These costs will continue to increase and be substantial as the development program rolls out. In accordance with generally accepted accounting principles (GAAP), Calpine is required to capitalize interest during construction and development costs until the plant enters commercial operation. At this time, the costs begin to be amortized over the life of the power plant.

One of Calpine's competitive advantages is the ability to optimize its operating portfolio to enhance long-term value. Recent successes include the restructuring of the Gilroy power sales agreement with Pacific Gas and Electric Company (PG&E). With this amendment, Calpine has the opportunity to earn assured payment streams from PG&E. The project will be available in 2002 for Calpine to market its output into the very attractive northern California power market as part of the company's system of efficient gas-fired and geothermal power facilities. The company is in active discussions to utilize this model to restructure an additional 500 megawatts of generation in northern California. Calpine is also looking to restructure power sales agreements at its other plants across the country.

Another optimization success is Calpine's restructuring of its investment in the Sumas project. This investment is based on a pre-determined 24.5% pre-tax rate of return. In late 1998, the partnership agreement was amended to provide dividend distributions sooner than forecast. Calpine is using these distributions to invest in the accelerated growth of the development program. The company has fully amortized its investment and recognizes earnings from this project upon the receipt of the quarterly cash distributions.

The company enhanced its portfolio of low-cost gas resources in the Sacramento Basin with the acquisition of Vintage Petroleum, Inc.'s interest in the Rio Vista Gas Unit. The recognition of earnings from these assets began after the transaction was completed on December 31, 1999.

In the third quarter of 1999, the company reclassed its recognition of revenue and expenses related to third party sales and purchases of electricity and gas to be consistent with industry practices. This change had no impact to Calpine's net earnings.

"In structuring each acquisition and development project, we carefully work to maximize the economic value of each asset. All elements of the transactions are reviewed with Arthur Andersen, our outside accountants, to insure the proper recognition of earnings in accordance with GAAP," said Calpine Executive Vice President and Chief Financial Officer Ann B. Curtis. "We are well on our way toward becoming the premier power company in the U.S. The significant growth that Calpine has achieved during the past year has provided, and will continue to provide, solid financial performance and success in the years to come," added Curtis.

The company has scheduled a conference call for this morning at 8:30 a.m. Pacific Standard Time. To participate in a listen-only mode, please call (800) 322-9079.

About Calpine

Calpine Corporation is a leading U.S. power company dedicated to providing customers with reliable and competitively priced electricity. Calpine currently has interests in approximately 17,000 megawatts of capacity in operation, under construction or in announced development in 20 states-enough energy to power approximately 17 million households. Calpine has headquarters in San Jose, Calif., with regional offices in Houston, Texas; Pleasanton, Calif.; and Boston, Mass. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. To learn more about Calpine, visit its website at www.calpine.com.

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 ("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) changes in government regulations and anticipated deregulation of the electric energy industry; (ii) commercial operations of new plants that may be delayed or prevented because of various development and construction risks, such as a failure to obtain financing and the necessary permits to operate or the failure of third-party contractors to perform their contractual obligations (iii) cost estimates are preliminary and actual cost may be higher than estimated, (iv) the assurance that the Company will develop additional plants, (v) a competitor's development of a lower-cost generating gas-fired power plant or (vi) the risks associated with marketing and selling power from power plants in the newly competitive energy market. Prospective investors are also referred to the other risks identified from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission. ###