Calpine completes sale of its Saltend Energy Centre

SAN JOSE, Calif., July 29, 2005 (PR Newswire – First Call) — A Calpine Corporation subsidiary has completed the sale of its 1,200-megawatt Saltend Energy Centre in Hull, England for a total purchase price of £490 million, or approximately $US848 million, plus adjustments for working capital of $US14.5 million. The transaction, which has generated total gross proceeds to Calpine of $US862.5 million (subject to post-closing adjustment), is part of the company’s strategic program to reduce debt and optimize its power plant portfolio.

Calpine has sold the natural gas-fired Saltend power plant to a company indirectly owned by International Power plc and Mitsui & Co., Ltd. Calpine acquired the plant in August 2001 for the sterling equivalent of approximately $810 million. With the completion of this transaction, Calpine no longer owns any interest in Saltend.

“The sale of Saltend has allowed Calpine to capture significant value for our investment,” said Calpine Chief Financial Officer Bob Kelly. “The proceeds from this sale will allow Calpine to reduce debt and focus our efforts on the North American power market.”

The two existing series of Redeemable Preferred Shares relating to the Saltend Energy Centre were redeemed in connection with the sale. The remaining net proceeds are being held under the control of Calpine’s subsidiary Calpine Canada Resources Company pursuant to an interim order issued yesterday, pending final decision, by the Supreme Court of Nova Scotia in the current litigation commenced in May by Harbert Distressed Investment Master Fund, Ltd. The final decision of that Court is expected within the next week.

About Calpine [ www.calpine.com ]

Calpine Corporation is a North American power company dedicated to providing electric power to customers from clean, efficient, natural gas-fired and geothermal power plants. The company generates power at plants it owns or leases in 21 states in the United States and three provinces in Canada. The company is included in the S&P 500. Calpine was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN.

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