Calpine Receives Written Opinion from the Court Allowing It to Proceed With Its $5 Billion Replacement DIP Financing



    
    Expected Benefits of the Replacement DIP Facility Include:

    Simplified Capital Structure;

    Estimated Annual Cash Interest Savings of Approximately $100 Million;

    Ability to Provide Liens to Counterparties to Enhance Hedging Program; and

    Options for $2 Billion Upsizing and Exit Financing Rollover
    

    SAN JOSE, Calif., March 6 /CNW/ -- Calpine Corporation (OTC Pink Sheets:  
CPNLQ) announced today that it has received from the U.S. Bankruptcy Court for
the Southern District of New York a written opinion that will allow the
company to proceed with its plans for a $5 billion replacement
debtor-in-possession credit facility (Replacement DIP Facility).  If the
company is successful in completing this refinancing, the Replacement DIP
Facility will be used to refinance the company's existing $2.0 billion DIP
financing; to repay approximately $2.5 billion of secured debt at Calpine
Generating Company, LLC (CalGen), one of Calpine's largest operating
subsidiaries; and for working capital and other general corporate purposes.
    Robert P. May, Calpine's Chief Executive Officer, stated, "Moving forward
with this refinancing is a major milestone in Calpine's restructuring program
that will help us achieve our strategic goals.  With this Replacement DIP
Facility, Calpine will continue to advance its plans to significantly reduce
costs and simplify the company's capital structure.  In addition, this
proposed financing will provide Calpine the potential opportunity to put in
place an attractive exit financing to help ensure that Calpine emerges from
Chapter 11 as a profitable and competitive power company positioned for future
growth.  We remain committed to moving through our restructuring as quickly as
possible, and I am encouraged by the speed with which, working with our
stakeholders, we have initiated this proposed financing."
    Credit Suisse, Goldman Sachs, JPMorgan and Deutsche Bank will act as
co-lead arrangers for Calpine's Replacement DIP Facility.  This proposed new
facility is expected to close within the next 30 days and will consist of:

    
    -- A $4 billion Senior Secured Term Loan;
    -- A $1 billion Senior Secured Revolving Credit Facility;
    -- A $2 billion expansion option;
    -- The ability to provide liens to counterparties to enhance Calpine's
       hedging program; and
    -- A rollover option that allows, but does not obligate, Calpine to
       convert the Replacement DIP into an exit financing.
    

    Upon completion, the Replacement DIP Facility will remain in place until
the earlier of an effective Plan of Reorganization or the second anniversary
of the closing date of the Replacement DIP Facility.  If the Replacement DIP
Facility is converted to an exit financing, the final maturity will be seven
years from the closing date of the Replacement DIP Facility.  The Replacement
DIP Facility will be secured by substantially all of the assets which secure
the existing $2.0 billion DIP facility, liens on all of Calpine's unencumbered
assets, and junior liens on all encumbered assets of Calpine and its debtor
subsidiaries. The Court's written opinion also stated that the CalGen lenders
have an unsecured claim for an amount that is presently estimated as
approximately $76 million.

    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, capable of delivering nearly 25,000 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.

    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 and its subsidiaries ("the
Company") and its management and uses words such as "believe," "intend,"
"expect," "anticipate," "plan," "may," "will" and similar expressions to
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.  Readers 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 impact on operations; (ii)
the Company's ability to attract, retain and motivate key employees and
successfully implement new strategies; (iii) the Company's ability to
successfully reorganize and emerge from Chapter 11; (iv) the Company's ability
to attract and retain customers and counterparties; (v) the Company's ability
to implement its business plan; (vi) financial results that may be volatile
and may not reflect historical trends; (vii) the Company's ability to manage
liquidity needs and comply with financing obligations; (viii) the direct or
indirect effects on the Company's business of its impaired credit including
increased cash collateral requirements; (ix) the expiration or termination of
the Company's power purchase agreements and the related results on revenues; (*)
potential volatility in earnings and requirements for cash collateral
associated with the use of commodity contracts; (xi) price and supply of
natural gas; (xii) risks associated with power project development,
acquisition and construction activities; (xiii) risks associated with the
operation of power plants, including unscheduled outages of operating plants;
(xiv) factors that impact the output of the Company's 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; (xv) quarterly and
seasonal fluctuations of the Company's results; (xvi) competition; (xvii)
risks associated with marketing and selling power from plants in the evolving
energy markets; (xviii) present and possible future claims, litigation and
enforcement actions; (xix) effects of the application of laws or regulations,
including changes in laws or regulations or the interpretation thereof; and
(xx) other risks identified the risk factors identified in its Annual Report
on Form 10-K for the year ended December 31, 2005, and its Quarterly Report on
Form 10-Q for the quarter ended September 30, 2006, which can also be found on
the Company's website at http://www.calpine.com. All information set forth in
this news release is as of today's date, and the Company undertakes no duty to
update this information.





For further information:

For further information: Media, Mel Scott, +1-713-570-4553, 
mscott@calpine.com, or Investors, Karen Bunton, +1-408-792-1121, 
karenb@calpine.com Web Site: http://www.calpine.com/

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CALPINE CORPORATION

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