Calpine Power Income Fund
TSX : CF.UN

Calpine Power Income Fund

January 17, 2006 00:57 ET

Calpine Power Income Fund Commences Process to Market Calgary Generation Capacity

CALGARY, ALBERTA--(CCNMatthews - Jan. 17, 2006) - Calpine Power Income Fund (TSX:CF.UN) (the "Fund") announces that a process to market the generation capacity of the Calgary Energy Centre power plant has commenced, following the repudiation of the tolling agreement under which the generation capacity of the plant was provided to a subsidiary of Calpine Corporation.

The Fund has been advised by Calpine Energy Services Canada Partnership ("CESCP") that CESCP has repudiated the tolling agreement between CESCP and Calpine Power L.P. The Fund owns an indirect 70% priority partnership interest in Calpine Power L.P., which is one of the main sources of cash distributions for the Fund.

"CLP and the Fund, together with Calpine Canada Power Ltd, as Manager of the Fund, have been considering alternative arrangements to enter into both short and long term tolling arrangements for the Calgary Energy Centre," says Toby Austin, President and Chief Executive Officer of Calpine Canada Power Ltd. "Although this decision by Calpine will impact revenue of CLP in the short term, we are confident that alternate tolling arrangements will be put in place relatively quickly."

In addition, the Fund recently retained BMO Nesbitt Burns to provide financial advice to the Fund (including CLP) relating to the effects on the Fund of the restructuring of Calpine Corporation. CESCP and Calpine Canada Power Ltd. filed under the Companies Creditors Arrangement Act (Canada), in connection with the filing by Calpine Corporation for voluntary reorganization under Chapter 11 of the US Bankruptcy Code. The other subsidiaries of Calpine Corporation that are central to the Fund, have not filed in any reorganization proceedings.

The Fund continues to be in a strong cash position and confirms that it will make the December distribution payment to unitholders scheduled for January 20. The trustees of the Fund will, at their regularly scheduled meeting on January 19, consider what impact, if any, the repudiation of the tolling agreement will have on the January distribution to unitholders, expected to be made on February 20.

CESCP did not make its December 2005 toll payment by January 16 as required by the tolling agreement. All payments from Calpine Canada Power Ltd. on the manager loan are current.

Calpine Power Income Fund is an unincorporated open-ended trust that invests in electrical power assets. The Fund indirectly owns interests in power generating facilities in British Columbia, Alberta and California. In addition, the Fund owns a participating loan interest in a power plant in Ontario and has made a loan to Calpine Canada Power Ltd. The Fund is managed by Calpine Canada Power Ltd., which is headquartered in Calgary, Alberta.

The Calpine Power Income Fund units are listed on the Toronto Stock Exchange under the symbol CF.UN. For further information on the Fund, please visit its website at www.calpinepif.com.

Forward-Looking Information Disclaimer

This news release may contain forward-looking information as defined under applicable Canadian securities laws, including information regarding possible events, conditions or results with respect to Calpine Power Income Fund. This information is subject to a number of risks that may cause actual results to differ materially from the forward-looking information. Some of the factors that could cause such differences include the outcome of the voluntary reorganization filings by Calpine Corporation and applicable subsidiaries, including Calpine Canada Power Ltd., performance or non-performance by Calpine Corporation and applicable subsidiaries of contracts with Calpine Power Income Fund and its applicable subsidiaries or investees, legislative or regulatory developments, competition, general economic conditions and other risks identified in the management discussion and analysis of Calpine Power Income Fund for the fiscal year ended December 31, 2005 and the fiscal quarter ended September 30, 2005, each of which is available on www.SEDAR.com and the Fund's website at www.calpinepif.com.

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