March 2, 2004

HARVARD ELECTRICITY POLICY GROUP Natural Gas and Electricity

CALPINE

Ron Walter Executive Vice President

CALPINE

CALPINE CORPORATION — THE FIRST 20 YEARS  Largest Independent Power Company in North America  Most Modern, Efficient Fleet of Power Generation Assets  87 Plants, 22,130 mw in Operation Today  Growing to Over 30,000 mw in 2006  Proved Gas Reserves – 1 tcf  Assets Managed by Calpine Energy Services  3.4% of U.S. Electrical Consumption  3% of U.S. Natural Gas Supply R020415 March 2, 2004 1

CALPINE

CALPINE’S GROWING PORTFOLIO

Net Megawatts 7,860 4,040 9,750 2,630 15,200 13,400 19,050 22,130 25,680 27,090 29,720 4,400 3,355 1999 5,849 2000 11,130 2001 2002 In Operation 2003 In Construction 2004

Assumes No New Projects

2005 2006

R020415 March 2, 2004 2

CALPINE

CALPINE’S POWER PORTFOLIO

1 1 1 1 39 3 1 1

R020415

87 13

In Operation Under Construction 12 - New Projects 1 - Expansion Projects

1 1 10 1 2 1 2 1 1 2 1 2 3 1 1 1 3 4 2 3 1 1 1 3 1 1 1

March 2, 2004 3

CALPINE

MOST EFFICIENT NORTH AMERICAN POWER GENERATION FLEET Combined-Cycle Megawatts By Company

30,000 25,000 20,000 15,000 10,000 5,000 0 Calpine Duke (2) FPL (1) FPL (2) Southern Operation (2) Xcel (2) Construction Southern (1) Progress (1) Exelon (2)

(1) Regulated (2) Non-Regulated Source: Company Data R020415 March 2, 2004 4

CALPINE

Natural Gas Will Remain the Fuel of Choice for Power Generation

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CALPINE

THE PRICE OF NATURAL GAS WILL BE REASONABLE  Responds Well to Market Forces  Spot Prices vs. Long-Term Prices  Expected Range of Prices  < $2.50/mmbtu – No New Investment  > $5.00/mmbtu – New Supply  Calpine Strategy to Manage Price Risk R020415 March 2, 2004 6

CALPINE

THE SUPPLY OF NATURAL GAS WILL REMAIN SUFFICIENT     Proven Reserves Don’t Tell the Whole Story 2003 Report of Potential Gas Committee  1,311 Trillion Cubic Feet   65X Annual Production Rate 3.3% Increase in Supply From 2000 New Supply   Eastern Canada Deep Gulf    MacKenzie Delta Alaska LNG LNG   Large World Resource Base U.S. Deliverability    1 bcf 2003 4 bcf 2004 9 bcf 2007 R020415 March 2, 2004 7

CALPINE

NATURAL GAS CONSUMPTION FOR POWER GENERATION GROWING MODESTLY  New Natural Gas-Fired Plants are 40% More Efficient  During the Height of the New Power Plant Additions January 2002 – January 2003  Megawatt-Hours Increased by 8%  Gas Consumption Increased by 2%  Less Efficient Plants are Being Displaced / Retired R020415 March 2, 2004 8

CALPINE

ENVIRONMENTAL BENEFITS OF NATURAL GAS  Lower Air Emissions  98.7% Less NOx Than Coal    99.9% Less SO 2 65% Less CO 2 100% Less Mercury  Lower Land Use  40% – 60% Lower Water Consumption  Reduces Global Warming R020415 March 2, 2004 9

CALPINE

MARKET FORCES ARE BEST DRIVER FOR CHOICES ON FUEL USE  Government Intervention Has Not Been Successful  Nuclear Energy  Fuel Use Act  Clean Coal  Renewable Standards  Economics and Environmental Considerations Should Shape Fuel Use  Supply and Price of Natural Gas Will Best be Moderated by Market Forces R020415 March 2, 2004 10