Calpine Power Income Fund
TSX : CF.UN

Calpine Power Income Fund

August 12, 2006 20:36 ET

Calpine Power Income Fund Implements Unitholder Rights Plan

CALGARY, ALBERTA--(CCNMatthews - Aug. 12, 2006) - Calpine Power Income Fund ("CPIF") (TSX:CF.UN) today implemented a unitholder rights plan (the "Plan"). The Plan is designed to ensure that all of CPIF's unitholders (the "Unitholders") are treated fairly in the event that a take-over bid is made for the trust units of CPIF and that sufficient time and rights are available for CPIF's board of trustees and all Unitholders to fully evaluate any offer and pursue alternatives to maximize Unitholder value.

The rights issued to Unitholders under the Plan will entitle the holders thereof to acquire trust units of CPIF at a 50% discount to market upon a person or group acquiring 20% or more of the trust units of CPIF. However, the rights are not exercisable in the event of a "Permitted Bid". A Permitted Bid is a take-over bid made by way of a circular for all of the outstanding trust units, which remains open for at least 60 days and, under certain circumstances, a longer period of time until the satisfaction of certain conditions including conditions relating to management and administration of CPIF and its subsidiaries, that are designed to ensure that CPIF is in a position to effectively pursue alternatives to any take-over bid for the trust units of CPIF.

The rights will not be exercisable and will not trade separate and apart from the trust units at any time prior to a person or group acquiring, or announcing an intention to acquire (in a manner that does not constitute a Permitted Bid), 20% or more of the trust units of CPIF.

CPIF's board of trustees intends to schedule a special meeting of Unitholders no later than 6 months from the date of the Plan's adoption, in order to obtain Unitholder approval for the Plan. In the event that the Plan does not receive approval from the Unitholders, the rights issued pursuant to the Plan will be redeemed immediately at $0.0001 per right and the Plan will terminate. Provided the Plan receives the required Unitholder approval, the Plan will expire at the earlier of the Termination Time (as such term is defined in the Plan) and the termination of the annual meeting of the Unitholders in the year 2009.

The Plan is effective immediately but is subject to TSX acceptance.

The Plan was not adopted in response to, or in anticipation of, any specific effort to acquire control of CPIF.

Disclaimer

This press release has been prepared by the Fund (but not the Manager) and the Manager has not participated in the preparation or adoption of the Plan.

CPIF is an unincorporated open-ended trust that invests in electrical power assets. CPIF indirectly owns interests in power generating facilities in British Columbia, Alberta and California. In addition, CPIF owns a participating loan interest in a power plant in Ontario and a promissory note issued by Calpine Canada Power Ltd. CPIF is managed by Calpine Canada Power Ltd., which is headquartered in Calgary, Alberta.

The trust units of CPIF are listed on the Toronto Stock Exchange under the symbol CF.UN.

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