Calpine Reaches Claims Settlements With Calpine First Lien Debtholders and CalGen First Priority Noteholders



    SAN JOSE, Calif. and HOUSTON, Nov. 12 /CNW/ -- Calpine Corporation (OTC
Pink Sheets:   CPNLQ) and its affiliated debtors in possession (the "Debtors")
have reached a claims settlement with Law Debenture Trust Company of New York,
as successor indenture trustee (the "First Lien Trustee") for the 9.625% First
Priority Senior Secured Notes due 2014 (the "Calpine First Lien Debtholders").
 Additionally, Calpine reached a claims settlement with the holders of the
First Priority Secured Floating Rate Notes due 2009 issued by Calpine
Generating Company LLC ("CalGen") and CalGen Finance Corporation and First
Priority Secured Institutional Term Loans due 2009 issued by CalGen (the
"CalGen First Priority Noteholders") and the indenture trustee and
administrative agent for such notes (the "First Priority Debt
Representatives"). Both of these settlements are subject to approval by the
U.S. Bankruptcy Court.
    "In reaching these settlements, we have successfully addressed one of our
last major hurdles before emerging from Chapter 11 as a financially stable,
stand-alone company with an improved competitive position in the energy
industry," said Robert P. May, Calpine's Chief Executive Officer.  "We are
very pleased to have reached this agreement, and we continue to be proud of
what we have accomplished thus far in this process.  We remain on track with
our current timetable and expect to emerge from Chapter 11 prior to Jan. 31,
2008."
    Under the agreement with the Calpine First Lien Debtholders, the claims
for make whole premium and damages claims asserted by the First Lien Trustee
and disputed by the Debtors and the Official Committee of Unsecured Creditors
have been settled and will be allowed as claims against Calpine in the
aggregate amount of approximately $84 million plus interest, representing an
allowed secured claim of approximately $50.4 million, plus interest at the
contract non-default rate and an allowed unsecured claim of approximately
$33.6 million, plus interest at the contract non-default rate.  In addition,
the Debtors have agreed to pay up to $3.5 million of the reasonable
professional fees incurred by the First Lien Trustee.
    Under the agreement with the CalGen First Priority Noteholders, the
claims for contract damages and default interest asserted by the First
Priority Debt Representatives and disputed by the Debtors have been settled
and will be allowed as unsecured claims against CalGen in the aggregate amount
of approximately $50 million plus interest at the federal judgment rate,
representing approximately $20.1 million on account of make whole premium and
damages claims and approximately $29.1 million on account of default interest
claims.  In addition, the Debtors have agreed to pay up to $3 million of the
reasonable professional fees incurred by the First Priority Debt
Representatives and up to $684,000 of the reasonable professional fees
incurred by Whitebox Advisors LLC.
    The Debtors will seek approval of these agreements from the United States
Bankruptcy Court for the Southern District of New York on November 27, 2007.
    
    Calpine's court documents are available at http://www.kccllc.net/calpine.
    About Calpine
    
    Calpine Corporation is helping meet the needs of an economy that demands
more and cleaner sources of electricity.  Founded in 1984, Calpine is a major
U.S. power company, currently capable of delivering nearly 24,000 megawatts of
clean, cost-effective, reliable, and fuel-efficient electricity to customers
and communities in 18 states in the U.S.  The company owns, leases, and
operates low-carbon, natural gas-fired, and renewable geothermal power plants.
Using advanced technologies, Calpine generates electricity in a reliable and
environmentally responsible manner for the customers and communities it
serves.  Please visit http://www.calpine.com for more information.
    In addition to historical information, this news release contains
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. Words such as "believe," "intend," "expect,"
"anticipate," "plan," "may," "will" and similar expressions identify
forward-looking statements. Such statements include, among others, those
concerning the company's expected financial performance and strategic and
operational plans, as well as all assumptions, expectations, predictions,
intentions or beliefs about future events. You are cautioned that any such
forward-looking statements are not guarantees of future performance and that a
number of risks and uncertainties could cause actual results to differ
materially from those anticipated in the forward-looking statements. Such
risks and uncertainties include, but are not limited to: (i) the risks and
uncertainties associated with the company's Chapter 11 cases and Companies'
Creditors Arrangement Act proceedings, including its ability to successfully
reorganize and emerge from Chapter 11; (ii) its ability to implement its
business plan; (iii) financial results that may be volatile and may not
reflect historical trends; (iv) seasonal fluctuations of results; (v)
potential volatility in earnings associated with fluctuations in prices for
commodities such as natural gas and power; (vi) its ability to manage
liquidity needs and comply with covenants related to our existing financing
obligations and anticipated exit financing; (vii) the direct or indirect
effects on the company's business of its impaired credit including increased
cash collateral requirements in connection with the use of commodity
contracts; (viii) transportation of natural gas and transmission of
electricity; (ix) the expiration or termination of power purchase agreements
and the related results on revenues; (*) risks associated with the operation of
power plants including unscheduled outages; (xi) factors that impact the
output of its geothermal resources and generation facilities, including
unusual or unexpected steam field well and pipeline maintenance and variables
associated with the waste water injection projects that supply added water to
the steam reservoir; (xii) risks associated with power project development and
construction activities; (xiii) its ability to attract, retain and motivate
key employees; (xiv) its ability to attract and retain customers and
counterparties; (xv) competition; (xvi) risks associated with marketing and
selling power from plants in the evolving energy markets; (xvii) present and
possible future claims, litigation and enforcement actions; (xviii) effects of
the application of laws or regulations, including changes in laws or
regulations or the interpretation thereof; and (xix) other risks identified in
the company's annual and quarterly reports on Forms 10-K and 10-Q. All
information set forth in this news release is as of today's date, and the
company undertakes no obligation to update any forward-looking statements,
whether as a result of new information, future developments or otherwise.




For further information:

For further information: Media Relations, Mel Scott, +1-713-570-4553, 
scottm@calpine.com; or Investor Relations, Karen Bunton, +1-408-792-1121, 
karenb@calpine.com, both of Calpine Corporation Web Site:
http://www.calpine.com

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CALPINE CORPORATION

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