Current CPNLQ shareholders to be offered warrants for 10% of re-org

SAN JOSE, Calif. and HOUSTON, Dec. 21, 2007 (Canada NewsWire) - Calpine Corporation (OTC: CPNLQ) announced today that as part of its Sixth Amended Joint Plan of Reorganization (the "Plan"), it will issue warrants to purchase approximately 50 million shares of its new common stock, or about 10 percent of the common stock to be issued pursuant to the Plan, to holders of its currently outstanding common stock. Each warrant will represent the right to purchase a single share of Calpine's new common stock. The exercise price per share has not yet been determined, but it is expected to be based on a stipulated reorganized equity value of $11.942 billion. For illustrative purposes, assuming the issuance of 500 million shares on the effective date, the exercise price would be $23.88 per share. The expiration date of the warrants will be Aug. 25, 2008 or the date that is six months after the effective date of the Plan, which ever is later. No fractional warrants will be issued and no cash in lieu of fractional warrants will be distributed. The warrants will be transferable, but they will not be listed on any exchange.

The specific number of warrants to be issued, the exercise price and expiration date have not yet been determined. In addition, the exercise price, when issued, is intended to be "out-of-the-money," although the extent to which it is or is not "out-of-the-money" will depend on the market price of the new Calpine common stock, which can not be known at this time. There can be no assurance that the warrants will be "in-the-money" at any time prior to their expiration date.

The currently outstanding shares of common stock will be cancelled on the effective date of the Plan and will no longer represent an interest in Calpine Corporation.

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.

Forward Looking Statement>>

In addition to historical information, this release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. We use 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 our 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 our Chapter 11 cases and Companies' Creditors Arrangement Act (CCAA) proceedings of certain of Calpine's Canadian affiliates, including our ability to successfully reorganize and emerge from Chapter 11; (ii) our ability to implement our business plan; (iii) financial results that may be volatile and may not reflect historical trends; (iv) seasonal fluctuations of our results; (v) potential volatility in earnings associated with fluctuations in prices for commodities such as natural gas and power; (vi) our 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 our business of our 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 our 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 our 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) our ability to attract, retain and motivate key employees; (xiv) our ability to attract and retain customers and contract 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 from time-to-time in Calpine's reports and registration statements filed with the SEC, including, without limitation, the risk factors identified in its Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10-Q. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements and Calpine undertakes no obligation to update any such statements. Unless specified otherwise, all information set forth in this release is as of today's date and Calpine undertakes no duty to update this information. For additional information about Calpine's chapter 11 reorganization or general business operations, please refer to Calpine's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, Calpine's Quarterly Reports on Form 10-Q, and any other recent Calpine report to the Securities and Exchange Commission. These filings are available by visiting the Securities and Exchange Commission's website at http://www.sec.gov or Calpine's website at http://www.calpine.com.

SOURCE: Calpine Corporation

Media Relations, Mel Scott, +1-713-570-4553, scottm@calpine.com, or Investor
Relations, Norma Dunn, +1-713-830-8883, ndunn@calpine.com, both of Calpine
Corporation

Calpine Corporation Web Site

Press Release on Calpine Corporation Warrant Offering