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15 April 2004 - Calpine Power Income Fund has agreed to acquire a 120 MW natural gas-fired, combined-cycle cogeneration facility (the King City Facility) located in King City, California.

In addition, the Fund has agreed to purchase a $53.4m promissory note issued by Calpine Canada Power Ltd, the manager of the Fund and a wholly owned subsidiary of Calpine Corporation. The Fund intends to acquire the King City Facility from an unrelated third party, BAF Energy A California Limited Partnership.

The acquisition by the Fund of the King City Facility and the promissory note will result in the Fund acquiring two different payment streams. The first payment stream will be pursuant to a 24-year lease of the King City Facility by Calpine King City Cogen, LLC, a wholly-owned subsidiary of Calpine. Calpine King City currently leases the King City Facility from the existing owner and will enter into the Lease with a wholly owned subsidiary of the Fund. The King City Facility has a long-term Power Purchase Agreement supported by the underlying credit of an investment grade utility. The second payment stream will be pursuant to the promissory note issued by the Manager. The purpose of the loan is to assist the Fund to establish cash reserves to levelize distributions related to the King City Facility over the term of the Lease.

The Fund intends to finance the transaction using a combination of a public offering of approximately $107m in subscription receipts exchangeable for trust units of the Fund and a non-recourse loan facility provided by a third party.

Closing of the Transaction is expected to occur on May 19, 2004 and is subject to a number of closing conditions, including the approval of the Fund's unitholders, other than Calpine and certain related parties for Calpine, in accordance with securities regulatory requirements. A special and annual meeting of unitholders, will be held on Tuesday, May 18, 2004 at the Palliser Hotel, in Calgary, Alberta to consider the Transaction, among other things.

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