Calpine Receives Court Approval for the Sale of Power Systems Manufacturing, LLC for $242 Million

    SAN JOSE, Calif., March 7 /CNW/ -- Calpine Corporation (OTC Pink Sheets:  
CPNLQ) announced today that it has received approval from the U.S. Bankruptcy
Court, Southern District of New York for the sale of substantially all of the
assets of Power Systems Mfg., LLC (PSM), a subsidiary of Calpine, to Alstom
Power, Inc. for a cash purchase price of $242 million. The asset sale will
advance Calpine's restructuring program to further focus the Company's
resources on those core business activities involving the production and sale
of power in key markets in which Calpine can best compete. The Company expects
to close the transaction, pending certain regulatory approvals, in the next 30
    Calpine Chief Executive Officer Robert P. May stated, "The sale of PSM
represents another successful step toward emerging from Chapter 11 as a
stronger, more competitive power company.  We continue to identify and execute
on opportunities that generate near-term results and enhance the long-term
value of Calpine for all of our stakeholders.  The sale of PSM represents a
new beginning for PSM to grow and strengthen its business.  For Calpine, the
sale will eliminate the capital commitment associated with the research,
development and manufacturing of turbine components, while maintaining our
ability to enhance our operations with the purchase of innovative PSM turbine
products and services."
    Calpine is PSM's largest customer, and both Calpine and PSM desire to
continue their business relationship after the sale.  Calpine will purchase,
on a preferential basis from PSM, turbine parts to be used in certain of
Calpine's combustion gas turbines throughout the Company's fleet of clean,
reliable and fuel-efficient natural gas-fired power generation facilities.
    Formed in 1998 and located in Jupiter, Florida, PSM designs, manufactures
and sells highly engineered turbine and combustion aftermarket components for
industrial, heavy-duty gas turbines.  Under the leadership of Tom Churbuck and
due to the strength of its highly skilled and experienced team of
professionals, PSM has quickly grown to become recognized as a quality source
of alternative technology for the industrial gas turbine market.  With its
dedicated staff of over 100 employees, whom are expected to be retained by
Alstom, PSM also provides turbine services, which include system
modernizations and conversions, maintenance and fuel system repairs, to
independent power producers, industrial self-generators and electric
    In January, the Company initially obtained a $200 million bid from
Marubeni Corporation and in February, Calpine received approval from the
Bankruptcy Court of the bidding procedures to sell substantially all of the
assets of PSM.  In accordance with bidding procedures approved by the
Bankruptcy Court, Calpine held an auction on March 5, 2007 to allow other
potential buyers to bid on the assets of PSM.  At the conclusion of this
auction, Alstom Power, Inc. was selected as the winning bidder.  Proceeds from
the sale will be used to reduce debt and enhance liquidity.
    Calpine Corporation is helping to 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 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 Company's
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 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 Relations, Mel Scott, +1-713-570-4553, or; or Investor Relations, Rick Barraza, +1-408-792-1125, or Web Site:

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