Cogeneration Corp of America – ‘DEFS14A’ for 12/16/99

On:  Tuesday, 11/16/99   ·   For:  12/16/99   ·   Accession #:  950124-99-6156   ·   File #:  1-09208

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Definitive Proxy Solicitation Material — Special Meeting   —   Schedule 14A
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Document/Exhibit                   Description                      Pages   Size 

 1: DEFS14A     Definitive Proxy Solicitation Material -- Special    115    577K 
                          Meeting                                                

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DEFS14A
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PROXY STATEMENT PURSUANT TO SECTION 14(A) 
OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [X]                                           

Filed by a party other than the Registrant [ ]                        

Check the appropriate box:                                            

     [ ] Preliminary Proxy Statement        [ ] Confidential, for Use of the SEC
                                          Only (as permitted by Rule
                            14a-6(e)(2))

[X] Definitive Proxy Statement                                        

[ ] Definitive Additional Materials                                   

[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section  
240.14a-12                                                                      
Cogeneration Corporation of America 
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              

[ ] No fee required                                                   

[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.                                                                           

(1) Title of each class of securities to which transaction applies:   

common stock, par value $.01                                    

--------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:      

    6,857,269 shares of common stock outstanding; options to purchase an
       aggregate of 797,000 shares of common stock outstanding as of September
       20, 1999 that are exercisable or will become exercisable as a result of
      the transaction; and warrant to purchase an aggregate of 16,500 shares
of common stock outstanding as of September 20, 1999 that is    
exerciseable.                                                   

--------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed  
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):                                 

$25.00 per share                                                

--------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:                  

      $183,463,413.00 (including the spread between $25.00 per share and the
       exercise price for the shares of common stock issuable upon exercise of
options and warrant).                                           

--------------------------------------------------------------------------------

(5) Total fee paid:                                                   

$36,692.69                                                      

--------------------------------------------------------------------------------

[X] Fee paid previously with preliminary materials.                   

--------------------------------------------------------------------------------

    [ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid   
previously. Identify the previous filing by registration statement number, or   
the Form or Schedule and the date of its filing.                                

(1) Amount Previously Paid: $                                         

--------------------------------------------------------------------------------

(2) Form, Schedule or Registration Statement                          
No.:                                                                            

--------------------------------------------------------------------------------

(3) Filing Party:                                                     

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(4) Date Filed:                                                       

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[COGENERATION CORPORATION OF AMERICA LOGO]

COGENERATION CORPORATION OF AMERICA 

One Carlson Parkway, Suite 240
Minneapolis, Minnesota 55447-4454 

November 12, 1999 

Dear Stockholder:                                                               

  You are cordially invited to attend a special meeting of stockholders of
Cogeneration Corporation of America ("CogenAmerica") to be held on December 16, 
1999 at 9:00 a.m., local time, at The Marquette Hotel, Universe Room, 50th      
Floor, 710 Marquette Avenue, Minneapolis, Minnesota. Stockholders of record as  
of November 12, 1999 are entitled to vote at the special meeting.               

  At the special meeting, you will be asked to approve (1) the merger of a
subsidiary of Calpine Corporation with and into CogenAmerica and (2) an         
amendment to CogenAmerica's certificate of incorporation to facilitate the      
merger. As a result of the merger, you will receive $25.00 in cash for each     
share of CogenAmerica common stock which you own and CogenAmerica will be owned 
80% by Calpine and 20% by NRG Energy, Inc., an existing stockholder.            

THE COGENAMERICA BOARD OF DIRECTORS, BASED UPON THE UNANIMOUS         
RECOMMENDATION OF THE INDEPENDENT DIRECTORS COMMITTEE, COMPRISED OF THREE       
DISINTERESTED DIRECTORS, HAS DETERMINED THAT THE MERGER AGREEMENT IS ADVISABLE  
AND IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF COGENAMERICA  
(OTHER THAN NRG ENERGY, INC.), AND HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT
AND THE AMENDMENT AND HAS UNANIMOUSLY RECOMMENDED THAT THE COGENAMERICA         
STOCKHOLDERS APPROVE AND ADOPT THE MERGER AGREEMENT AND THE AMENDMENT.          

Approval and adoption of the merger agreement at the special meeting  
requires the affirmative vote of the holders of more than 66 2/3% of the        
outstanding shares of CogenAmerica common stock entitled to vote at the special 
meeting. Approval of the charter amendment at the special meeting requires the  
affirmative vote of the holders of more than 50% of the outstanding shares of   
CogenAmerica common stock entitled to vote at the special meeting.              

    EVEN IF YOU PLAN TO ATTEND THE MEETING, WE URGE YOU TO MARK, SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT PROMPTLY. You have the option to revoke it at  
any time or to vote your shares personally on request if you attend the special 
meeting of stockholders. If the merger agreement and the charter amendment are  
approved by the stockholders, you will receive instructions as soon as          
practicable after completion of the merger on how to surrender your shares to   
receive payment.                                                                
              Sincerely,

                     DAVID H. PETERSON
                               David H. Peterson, Chairman

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[COGENERATION CORPORATION OF AMERICA LOGO]

COGENERATION CORPORATION OF AMERICA 
One Carlson Parkway, Suite 240
Minneapolis, Minnesota 55447-4454 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS 
TO BE HELD ON DECEMBER 16, 1999 

To the Stockholders of Cogeneration Corporation of America:                     

Notice is hereby given that a special meeting of stockholders of      
Cogeneration Corporation of America ("CogenAmerica"), will be held on December  
16, 1999 at 9:00 a.m., local time, at The Marquette Hotel, Universe Room, 50th  
Floor, 710 Marquette Avenue, Minneapolis, Minnesota:                            

     (1) To consider and vote upon a proposal to approve and adopt the
Agreement and Plan of Merger, dated as of August 26, 1999, pursuant to
    which Calpine East Acquisition Corp., a Delaware corporation ("Acquisition
     Sub") and a subsidiary of Calpine Corporation, a Delaware corporation, will
be merged with and into CogenAmerica, and each outstanding share of   
CogenAmerica common stock, $.01 par value, other than shares owned by 
     CogenAmerica, Acquisition Sub and stockholders who exercise their appraisal
    rights, will be converted into the right to receive $25.00 in cash. A copy
     of the merger agreement is attached as Appendix A to the accompanying proxy
    statement. The merger agreement is also summarized in the proxy statement.

    (2) To consider and vote upon a proposal to amend CogenAmerica's
certificate of incorporation to permit NRG Energy, Inc., a Delaware   
corporation ("NRG"), to transfer and contribute shares of CogenAmerica
common stock owned by NRG to Acquisition Sub immediately prior to     
     consummation of the merger so that, upon completion of the merger, NRG will
retain a 20% equity interest in CogenAmerica. A copy of the proposed  
  amendment is attached as Appendix B to the accompanying proxy statement.
The amendment is also summarized in the proxy statement.              

        (3) To consider and act upon such other matters as may properly come
before the special meeting or any adjournment or adjournments thereof.

 A proxy card and a proxy statement containing more detailed information
with respect to the matters to be considered at the special meeting accompany   
this notice.                                                                    

THE INDEPENDENT DIRECTORS COMMITTEE AND THE BOARD OF DIRECTORS OF     
COGENAMERICA HAVE UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE CHARTER     
AMENDMENT AND RECOMMEND THAT THE STOCKHOLDERS APPROVE AND ADOPT THE MERGER      
AGREEMENT AND THE CHARTER AMENDMENT.                                            

Only holders of CogenAmerica common stock of record at the close of   
business on November 12, 1999, are entitled to notice of, and to vote at, the   
special meeting. The quorum required to hold the special meeting is 60% of the  
shares of CogenAmerica                                                          

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common stock entitled to vote at the meeting, present in person or by proxy. The
affirmative vote of more than 66 2/3% of the outstanding shares of CogenAmerica 
common stock is required to approve the merger agreement and the affirmative    
vote of more than 50% of the outstanding shares of CogenAmerica common stock is 
required to approve the amendment to CogenAmerica's certificate of              
incorporation. Each stockholder who signs and returns a proxy in the form       
enclosed with this proxy statement may revoke the same at any time prior to its 
use by giving notice of such revocation to CogenAmerica in writing or in person 
at the special meeting. Unless so revoked, the shares represented by each proxy 
will be voted at the special meeting and at any adjournments thereof. Presence  
at the special meeting of a stockholder who has signed a proxy does not alone   
revoke that proxy.                                                              

    Holders of CogenAmerica common stock who do not vote their shares in favor
of the merger agreement and who strictly comply with Section 262 the Delaware   
General Corporation Law (the "DGCL") have appraisal rights to make written      
demand for payment of the "fair value" of their shares. For a description of the
appraisal rights of stockholders, see Section 262 of the DGCL, a copy of which  
is attached as Appendix D to the accompanying proxy statement. In addition, a   
description of procedures to be followed in order to exercise appraisal rights  
is set forth in the accompanying proxy statement.                               

It is very important that your shares be represented at the special   
meeting. You are urged to complete and sign the accompanying proxy card, which  
is solicited by the CogenAmerica Board of Directors, and mail it promptly in the
enclosed envelope.                                                              

                                      BY ORDER OF THE BOARD OF DIRECTORS

                      THOMAS L. OSTERAAS
                      Thomas L. Osteraas
             Secretary

Minneapolis, Minnesota                                                          
November 12, 1999                                                               

   PLEASE DO NOT SEND YOUR STOCK CERTIFICATES AT THIS TIME. IF THE MERGER IS
COMPLETED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF YOUR STOCK  
CERTIFICATES.                                                                   

  WHETHER OR NOT YOU ARE ABLE TO ATTEND THE MEETING, PLEASE SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE WHICH      
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.                             

    THE TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
THE TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED  
IN THIS DOCUMENT, INCLUDING THE ACCOMPANYING PROXY STATEMENT. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.                                                    

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COGENERATION CORPORATION OF AMERICA 
One Carlson Parkway, Suite 240
Minneapolis, Minnesota 55447-4454 

PROXY STATEMENT 
FOR SPECIAL MEETING OF STOCKHOLDERS 
TO BE HELD ON DECEMBER 16, 1999 

QUESTIONS AND ANSWERS ABOUT THE MERGER

Q: What will happen in the merger?                                              

A: In the merger, a subsidiary of Calpine Corporation will be merged into       
CogenAmerica, and CogenAmerica will be the surviving corporation. At the time of
the merger, each outstanding share of CogenAmerica common stock (other than     
shares owned by CogenAmerica, by Calpine's acquisition subsidiary and by        
stockholders who exercise their appraisal rights) will be converted into the    
right to receive $25.00 per share in cash. After the merger, CogenAmerica will  
no longer be publicly traded and will be owned 80% by Calpine and 20% by NRG    
Energy, Inc., an existing stockholder of CogenAmerica. To review the structure  
of the merger in greater detail, see pages 19 and 20 of this proxy statement.   

Q: Why does the CogenAmerica Board of Directors recommend the merger?           

A: The CogenAmerica Board of Directors believes that the sale of CogenAmerica is
in your best interests by providing you the right to receive $25.00 per share in
cash for your shares of CogenAmerica common stock. To review the background of  
and reasons for the merger in greater detail, see pages 13 through 19 and 20    
through 24 of this proxy statement.                                             

Q: What will I receive in the merger?                                           

A: You will have the right to receive $25.00 in cash, without interest, for each
share of CogenAmerica common stock that you own. For example, if you own 100    
shares of CogenAmerica common stock, you will have the right to receive merger  
consideration of $2,500.00 in cash upon completion of the merger.               

Q: When do you expect the merger to be completed?                               

A: We are working to complete the merger by December 31, 1999.                  

Q: What are the tax consequences of the merger to me?                           

A: The merger will be a taxable transaction for federal income tax purposes to  
CogenAmerica stockholders and option holders. To review the federal income tax  
consequences to you in greater detail, see page 45 of this proxy statement. Your
tax consequences will depend on your personal situation. You should consult your
tax advisor for a full understanding of the tax consequences of the merger to   
you.                                                                            

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Q: What am I being asked to vote upon?                                          

A: You are being asked to approve and adopt the merger agreement that provides  
for the merger and the amendment to CogenAmerica's certificate of incorporation 
that permits NRG to transfer a portion of its shares of CogenAmerica common     
stock to Acquisition Sub which will allow NRG to retain a 20% interest in       
CogenAmerica after the merger. The Board of Directors and the Independent       
Directors Committee of CogenAmerica have unanimously approved the merger        
agreement and the amendment, and recommend that the CogenAmerica stockholders   
vote "FOR" the approval and adoption of the merger agreement and the amendment. 

Q: What do I need to do now?                                                    

A: Simply indicate on your proxy card how you want to vote and then sign, date  
and mail the proxy card in the enclosed envelope as soon as possible so that    
your shares will be represented at the special meeting. In addition, you may    
attend the special meeting and vote your shares in person, rather than voting by
proxy. You may withdraw your proxy up to and including the day of the special   
meeting and either change your vote or attend the special meeting and vote in   
person.                                                                         

Q: If my shares are held in "street name" by my broker, will my broker vote my  
shares for me?                                                                  

A: Your broker will vote your shares only if you provide instructions on how to 
vote. You should instruct your broker how to vote your shares by following the  
directions your broker provides to you. If you do not provide instructions to   
your broker, your shares will not be voted and they will be counted as votes    
against the proposals to approve and adopt the merger agreement and the         
amendment.                                                                      

Q: Should I send in my stock certificates now?                                  

A: No. After the merger is completed we will send you written instructions for  
exchanging your CogenAmerica common stock certificates for the merger           
consideration.                                                                  

Q: Whom can I contact if I have additional questions or would like additional   
copies of the proxy statement or proxy card?                                    

A: You should contact either:                                                   
     Thomas L. Osteraas, Secretary
           Cogeneration Corporation of America
      One Carlson Parkway, Suite 240
  Minneapolis, MN 55447-4454
(612) 745-7900          

or our proxy solicitor:                                     
D.F. King & Co., Inc.   
77 Water Street         
New York, NY 10005      
Banks and Brokers call: 
(212) 269-5550      
  All others call toll-free:
(800) 848-3094      

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TABLE OF CONTENTS 

                                                                [Download Table]
                                                                   
Summary.....................................................      1
  The Companies.............................................      1
  The Special Meeting.......................................      2
  Record Date; Voting Power; Votes Required.................      2
  Potential Benefits and Detriments of the Merger to               
     Unaffiliated Stockholders; Benefits to Insiders........      3
  Recommendations of the Independent Directors Committee and       
     the Board of Directors.................................      3
  Opinion of CogenAmerica's Financial Advisor...............      4
  Terms of the Merger Agreement.............................      4
     General................................................      4
     Conditions to the Merger...............................      4
     No Solicitation........................................      5
     Termination............................................      5
     Fees and Expenses......................................      5
  Accounting Treatment......................................      6
  Conflicts of Interests....................................      6
     Board of Directors and Officers of CogenAmerica........      6
     NRG....................................................      6
  Regulatory Approvals......................................      6
  Appraisal Rights..........................................      7
The Special Meeting.........................................      8
  General...................................................      8
  Proposals to be Considered at the Special Meeting.........      8
  Record Date; Voting Power; Votes Required.................      8
  Voting Procedures; Proxies................................      9
Historical Market Information...............................     10
Selected Consolidated Financial Data of CogenAmerica........     11
Proposal 1: The Merger......................................     13
Special Factors.............................................     13
  Background of the Merger..................................     13
  Purpose, Timing and Structure of the Merger...............     19
  Reasons for the Merger....................................     20
  Recommendations of the Independent Directors Committee and       
     the Board of Directors.................................     24
  Opinion of Financial Advisor..............................     25
  Perspective of NRG on the Fairness of the Merger..........     30
  Plans for CogenAmerica After the Merger...................     31
  Certain Effects of the Merger.............................     32
  Unsolicited Offers From Third Parties.....................     32
  Conflicts of Interest.....................................     33
     Arrangements with NRG..................................     33
     Arrangements Between Calpine and NRG...................     34
     Directors and Officers of CogenAmerica.................     34
     Severance Agreements for Officers......................     35
     Indemnification........................................     35
Summary of Material Features of the Merger..................     37
  The Merger................................................     37
     General................................................     37

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                                                        [Enlarge/Download Table]
                                                                                                   
     Merger Consideration......................................................................  37
     Payment for Shares........................................................................  37
     Stock Options and Warrant.................................................................  37
     Closing of Transfer Books.................................................................  37
     Conditions to the Merger..................................................................  38
     Representations and Warranties............................................................  39
     Certain Covenants.........................................................................  39
     No Solicitation of Transactions...........................................................  40
     Termination...............................................................................  41
     Termination Fee...........................................................................  42
     Indemnification...........................................................................  42
     Amendment and Waiver......................................................................  43
     Expenses..................................................................................  43
  Effective Time...............................................................................  43
  Conversion of Common Stock...................................................................  43
  Payment for Stock Options....................................................................  44
  Conduct of Business Pending the Merger.......................................................  44
  Regulatory Filings and Approvals.............................................................  44
  Conditions to the Merger.....................................................................  45
  Federal Income Tax Consequences of the Transaction...........................................  45
  Financing of the Merger; Source of Funds.....................................................  46
  Anticipated Accounting Treatment.............................................................  46
  Appraisal Rights.............................................................................  46
Summary of Material Features of the Calpine/NRG Agreement......................................  50
Proposal 2: The Charter Amendment..............................................................  52
Summary of the Amendment.......................................................................  52
Management of CogenAmerica.....................................................................  52
Interest in Securities of CogenAmerica.........................................................  52
Certain Transactions in Common Stock and Stock Options.........................................  55
Expenses of the Transaction....................................................................  55
Independent Accountants........................................................................  55
Where You Can Find More Information............................................................  56
Incorporation of Certain Documents by Reference................................................  57
Stockholder Proposals..........................................................................  57
Other Matters..................................................................................  57
Appendix to the Proxy Statement................................................................  59
APPENDICES                                                                                         
APPENDIX A -- Agreement and Plan of Merger..................................................... A-1
APPENDIX B -- Amendment to CogenAmerica Certificate of Incorporation........................... B-1
APPENDIX C -- Opinion of Donaldson Lufkin & Jenrette Securities Corporation.................... C-1
APPENDIX D -- Text of Section 262 of the Delaware General Corporation Law...................... D-1

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SUMMARY 

    This summary highlights selected information from this proxy statement and
may not contain all of the information that is important to you. For a more     
complete understanding of the merger and for a more complete description of the 
legal terms of the merger, you should read this proxy statement carefully, as   
well as the appendices to this proxy statement, including the merger agreement. 
For additional information on CogenAmerica, see "Where You Can Find More        
Information" (page 56).                                                         

THE COMPANIES                                                                   

Cogeneration Corporation of America                                     
One Carlson Parkway, Suite 240                                          
Minneapolis, Minnesota 55447-4454                                       
Telephone: (612) 745-7900                                               

Cogeneration Corporation of America, a Delaware corporation, is an    
independent power producer engaged primarily in the business of developing,     
owning and managing the operation of cogeneration projects which produce        
electricity and thermal energy for sale under long-term contracts with          
industrial and commercial users and public utilities. CogenAmerica's current    
project portfolio consists of (1) a 122 megawatt ("MW") cogeneration facility in
Parlin, New Jersey, (2) a 58 MW cogeneration facility in Newark, New Jersey, (3)
a 117 MW cogeneration facility in Morris, Illinois, (4) a 110 MW cogeneration   
facility in Pryor, Oklahoma, (5) an 83% interest in two standby/peak shaving    
facilities with an aggregate capacity of 22 MW in Philadelphia, Pennsylvania,   
and (6) a 50% interest in a 150 MW cogeneration facility in Philadelphia,       
Pennsylvania. Through its United Kingdom subsidiary called Puma, CogenAmerica   
also designs and assembles diesel and natural gas fueled power generation       
systems ranging in size from 5 kilowatts to 5 MW. The CogenAmerica common stock 
trades on the The Nasdaq Stock Market under the symbol "CGCA".                  

Calpine Corporation                                                     
50 West San Fernando Street                                             
San Jose, California 95113                                              
Telephone: (408) 995-0505                                               

     Calpine Corporation, a Delaware corporation, is a leading independent power
company engaged in the development, acquisition, ownership and operation of     
power generation facilities and the sale of electricity predominantly in the    
United States.                                                                  

Calpine East Acquisition Corp.                                          
50 West San Fernando Street                                             
San Jose, California 95113                                              
Telephone: (408) 995-0505                                               

     Calpine East Acquisition Corp., a Delaware corporation ("Acquisition Sub"),
is currently a wholly-owned subsidiary of Calpine. Calpine formed Acquisition   
Sub shortly before execution of the merger agreement for the purpose of carrying
out the merger. Immediately prior to the merger NRG will contribute to          
Acquisition Sub approximately                                                   

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1.4 million shares of its CogenAmerica common stock in exchange for a 20%       
interest in Acquisition Sub.                                                    

NRG Energy, Inc.                                                      
1221 Nicollet Mall, Suite 700                                         
Minneapolis, Minnesota 55403-2445                                     
Telephone: (612) 373-5300                                             

 NRG Energy, Inc., a Delaware corporation, is one of the world's leading
independent power producers, specializing in the development, construction,     
operation, maintenance and ownership of low-cost, environmentally sensitive     
power plants. Established in 1989 as a wholly owned subsidiary of Northern      
States Power Company, NRG has a diversified energy portfolio of projects in the 
United States, Europe, the Pacific Rim, and Latin America. NRG is involved in   
approximately 15,000 MW of projects utilizing diverse fuel types including      
natural and landfill gas, hydro and solid fuels such as coal, lignite, biomass  
and refuse-derived fuel.                                                        

THE SPECIAL MEETING (PAGE 8)                                                    

   The special meeting will be held on December 16, 1999 at 9:00 a.m., local
time, at The Marquette Hotel, Universe Room, 50th Floor, 710 Marquette Avenue,  
Minneapolis, Minnesota. At the special meeting, stockholders will be asked to   
consider and vote upon a proposal to approve and adopt the merger agreement and 
a proposal to approve the amendment to CogenAmerica's certificate of            
incorporation. The special meeting has been called by order of the CogenAmerica 
Board of Directors.                                                             

RECORD DATE; VOTING POWER; VOTES REQUIRED (PAGE 8)                              

    Holders of record of CogenAmerica common stock at the close of business on
November 12, 1999 are entitled to notice of and to vote at the special meeting. 
As of that date, there were 6,857,269 shares of CogenAmerica common stock issued
and outstanding held by approximately 2,200 holders of record. Holders of record
of CogenAmerica common stock on the record date are entitled to one vote per    
share on any matter that may properly come before the special meeting. The      
quorum required to hold the special meeting is 60% of the shares of CogenAmerica
common stock entitled to vote at the meeting, present in person or by proxy. If 
a quorum is present, the affirmative vote of the holders of more than 66 2/3% of
the outstanding shares of CogenAmerica common stock is required to approve and  
adopt the merger agreement and the affirmative vote of the holders of more than 
50% of the outstanding shares of CogenAmerica common stock is required to       
approve the amendment to CogenAmerica's certificate of incorporation.           

     On the record date, NRG owned 3,106,612 shares of CogenAmerica common stock
or approximately 45.3% of the outstanding shares. Pursuant to the contribution  
and stockholder agreement dated as of August 26, 1999 (the "Calpine/NRG         
Agreement") between NRG and Calpine, NRG has granted its proxy to Calpine to    
vote the CogenAmerica shares held by NRG for approval and adoption of the merger
agreement and the charter amendment.                                            

If either proposal is not approved, the merger will not be completed, 
CogenAmerica will remain a public company and the stockholders of CogenAmerica  
will not have the right to receive $25.00 per share for the CogenAmerica common 
stock. A stockholder who wishes to exercise appraisal rights under the Delaware 
General Corporation Law                                                         

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("DGCL") must vote against or fail to vote for approval and adoption of the     
merger agreement.                                                               

POTENTIAL BENEFITS AND DETRIMENTS OF THE MERGER TO UNAFFILIATED STOCKHOLDERS;   
BENEFITS TO INSIDERS (PAGES 20, 32 AND 33)                                      

    The primary benefit of the merger to you is the opportunity to sell all of
your shares of CogenAmerica common stock at a cash price which represents a     
substantial premium over historical trading prices. The merger consideration of 
$25.00 per share in cash represents a premium of approximately 48.6% over the   
average market price for CogenAmerica common stock for the 20 trading days      
preceding the announcement of the execution of the merger agreement on August   
27, 1999. As a result of the merger, however, you will not be entitled to       
participate in future earnings or growth of CogenAmerica. In addition, you will 
be required to recognize a taxable gain as a result of the merger if your cost  
basis in your shares of CogenAmerica common stock is less than $25.00 per share.

     Upon completion of the merger, Calpine will own 80% and NRG will own 20% of
the equity interests of CogenAmerica. As the stockholders of CogenAmerica,      
Calpine and NRG will have complete control over the management and conduct of   
CogenAmerica's business, all income generated by CogenAmerica and any future    
increase in CogenAmerica's value. Similarly, Calpine and NRG will also bear the 
risk of any losses incurred in the operation of CogenAmerica and any decrease in
the value of CogenAmerica. Calpine will have operating control over CogenAmerica
subject to certain limitations set forth in the Calpine/NRG Agreement.          

    Like the unaffiliated stockholders of CogenAmerica, the executive officers
and directors of CogenAmerica will have the right to receive $25.00 per share   
for each of their shares of CogenAmerica common stock. In addition, the officers
and directors of CogenAmerica who hold options will have the right to receive   
(a) the excess of $25.00 over the exercise price of each option multiplied by   
(b) the number of shares of CogenAmerica common stock purchasable upon exercise 
of the option (after giving effect to any acceleration of the option as a result
of the merger), net of withholding and applicable taxes.                        

    At November 12, 1999, the executive officers and directors of CogenAmerica
beneficially owned 737,000 shares of CogenAmerica common stock, including       
647,000 shares subject to options that will become exercisable as a result of   
the merger, representing an aggregate cash payment to such persons upon         
completion of the merger of $9,482,625. Because current NRG corporate policy    
prohibits NRG employees from receiving the economic benefit of options granted  
to them in their capacity as a director of an affiliated company, the three NRG 
employees, who currently serve as directors of CogenAmerica and were previously 
granted stock options in their capacity as directors of CogenAmerica, have      
agreed to cancel their stock options. The three NRG employees who serve as      
directors of CogenAmerica will receive no cash payment for cancellation of these
options.                                                                        

RECOMMENDATIONS OF THE INDEPENDENT DIRECTORS COMMITTEE AND THE BOARD OF         
DIRECTORS (PAGE 24)                                                             

 Because NRG will retain a 20% equity interest in CogenAmerica after the
merger and certain directors of CogenAmerica are or were officers of NRG, the   
Independent Directors                                                           

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Committee of the CogenAmerica Board of Directors reviewed and evaluated the     
proposals to acquire CogenAmerica. At special meetings held on August 26, 1999, 
the Independent Directors Committee and the Board of Directors of CogenAmerica  
each unanimously determined that the merger is in furtherance of and consistent 
with the long-term business strategies of CogenAmerica and is fair to and in the
best interest of the CogenAmerica stockholders (other than NRG). The            
CogenAmerica Board of Directors unanimously recommends that you vote "FOR"      
approval and adoption of the merger agreement and the charter amendment. You    
should refer to the matters considered by the Independent Directors Committee   
and the Board of Directors of CogenAmerica in determining whether to approve the
merger agreement, beginning at page 20.                                         

OPINION OF COGENAMERICA'S FINANCIAL ADVISOR (PAGE 25)                           

   Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), a nationally
recognized investment banking firm, rendered an opinion, dated August 26, 1999  
to the Independent Directors Committee of the CogenAmerica Board of Directors   
that, as of such date, based upon and subject to the assumptions, limitations   
and qualifications in the opinion, the consideration to be received by the      
holders (other than NRG) of CogenAmerica common stock in the merger is fair to  
the holders from a financial point of view. THE FULL TEXT OF THE WRITTEN OPINION
OF DLJ IS ATTACHED TO THIS PROXY STATEMENT AS APPENDIX C. YOU SHOULD READ THE   
FAIRNESS OPINION OF DLJ IN ITS ENTIRETY.                                        

TERMS OF THE MERGER AGREEMENT (PAGE 37)                                         

     The merger agreement is attached to this proxy statement as Appendix A. You
should read the merger agreement in its entirety. It is the legal document that 
governs the merger.                                                             

    General. The merger agreement provides that Acquisition Sub will be merged
into CogenAmerica and CogenAmerica will be the surviving corporation. As a      
result of the merger, the stockholders of CogenAmerica will have the right to   
receive $25.00 in cash, without interest, for each share of common stock that   
they own, other than shares owned by CogenAmerica, Acquisition Sub or           
CogenAmerica stockholders who exercise their appraisal rights.                  

 Conditions to the Merger. The completion of the merger depends upon the
satisfaction of a number of conditions, including:                              

   - approval of the merger agreement by the holders of more than 66 2/3% of
the outstanding shares of common stock;                           

    - approval of the charter amendment by the holders of more than 50% of the
outstanding shares of CogenAmerica common stock;                  

    - receipt of all necessary orders and consents of governmental authorities
     and other persons and the expiration of any regulatory waiting periods;

  - material accuracy of the representations and warranties of the parties
  and the fulfillment of each party's promises contained in the merger
agreement;                                                        

     - absence of any court or governmental entity rendering the merger illegal;
and                                                               

   - absence of litigation having a material adverse effect on CogenAmerica.

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   Each party may waive the satisfaction of any condition to its obligations
under the merger agreement, other than approval of the merger agreement and the 
charter amendment by the CogenAmerica stockholders. EVEN IF THE COGENAMERICA    
STOCKHOLDERS APPROVE THE MERGER AGREEMENT, THERE CAN BE NO ASSURANCE THAT THE   
CONDITIONS TO THE OBLIGATIONS OF THE PARTIES TO COMPLETE THE MERGER WILL BE MET 
OR WAIVED OR THAT THE MERGER WILL BE COMPLETED.                                 

No Solicitation. Until completion or abandonment of the merger,       
CogenAmerica and its affiliates are not permitted to solicit, initiate or       
encourage any acquisition proposals from any other party. CogenAmerica may      
respond to unsolicited acquisition proposals and enter into discussions if,     
after receiving advice of counsel, the CogenAmerica Board of Directors          
determines such response is necessary to fulfill its fiduciary obligations and  
such proposal provides for consideration to CogenAmerica stockholders that is   
superior to the consideration to CogenAmerica stockholders under the merger     
agreement.                                                                      

Termination. Either CogenAmerica or Calpine may terminate the merger  
agreement under certain circumstances, including if:                            

- CogenAmerica and Calpine mutually consent in writing;     

          - the merger is not completed by the close of business on February 28,
         2000 or, if the special meeting has not been held by February 28,
          2000, then the merger is not completed by the close of business on
March 31, 2000;                                         

     - legal constraints or prohibitions prevent the completion of the
merger;                                                 

       - CogenAmerica stockholders do not approve the merger agreement and
the charter amendment;                                  

- the other party breaches in a material manner any of its  
           representations, warranties or covenants under the merger agreement
            and the breach is not cured within 30 business days after notice; or

     - CogenAmerica enters into or the CogenAmerica Board of Directors
        approves an agreement for CogenAmerica to be acquired by another
    party for consideration to CogenAmerica stockholders that is
            superior to the consideration to CogenAmerica stockholders under the
            merger agreement (a "Superior Proposal") so long as (a) CogenAmerica
     notifies Calpine of the Superior Proposal, (b) Calpine has an
   opportunity to respond, and (c) CogenAmerica pays Calpine a
termination fee of $7,500,000.                          

     In addition, Calpine may terminate the merger agreement if the CogenAmerica
Board of Directors withdraws or modifies its recommendation that CogenAmerica   
stockholders approve the merger agreement, or recommends an alternative         
acquisition proposal.                                                           

     Fees and Expenses. Each of CogenAmerica, Calpine and Acquisition Sub agreed
to pay its own fees and expenses. CogenAmerica will pay a termination fee of    
$7,500,000 to Calpine if the merger agreement is terminated by reason of a      
superior proposal permitting termination of the merger agreement or if          
CogenAmerica is acquired by another party within 12 months following termination
of the merger agreement under certain circumstances specified in the merger     
agreement.                                                                      

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ACCOUNTING TREATMENT (PAGE 46)                                                  

    CogenAmerica believes that the merger will be accounted for by Acquisition
Sub using the purchase method of accounting in accordance with generally        
accepted accounting principles.                                                 

CONFLICTS OF INTERESTS (PAGE 33)                                                

Board of Directors and Officers of CogenAmerica. Four members of the  
CogenAmerica Board of Directors were, at the time the CogenAmerica Board of     
Directors approved the merger agreement, officers of NRG. However, none of the  
NRG officers on the Board of Directors were members of the Independent Directors
Committee. Because current NRG corporate policy prohibits NRG employees from    
receiving the economic benefit of options granted to them in their capacity as a
director of an affiliated company, the NRG employees, who currently serve as    
directors of CogenAmerica and were previously granted stock options in their    
capacity as directors of CogenAmerica, have agreed to the cancellation of their 
stock options. The NRG employees who serve as directors of CogenAmerica will    
receive no cash payment for cancellation of these options. The officers of      
CogenAmerica, including its President and Chief Executive Officer who is also a 
director of CogenAmerica, own or have options to purchase a substantial number  
of shares of CogenAmerica common stock. All three disinterested directors of    
CogenAmerica who comprise the Independent Director Committee own or have options
to purchase a substantial number of shares of CogenAmerica common stock.        

 NRG. As of the close of business on November 12, 1999, NRG beneficially
owned 3,106,612 shares of CogenAmerica common stock which represents            
approximately 45.3% of the outstanding shares. Pursuant to the Calpine/NRG      
Agreement, NRG has agreed to contribute immediately prior to completion of the  
merger part of its holdings (approximately 1.4 million shares of common stock)  
to Acquisition Sub in exchange for a 20% interest in Acquisition Sub. NRG has   
granted its proxy to Calpine to vote the CogenAmerica shares held by NRG for    
approval and adoption of the merger agreement and the charter amendment at the  
special meeting. In addition, NRG or its subsidiaries and CogenAmerica or its   
subsidiaries are currently parties to agreements (the "Affiliate Agreements")   
pursuant to which (1) NRG has agreed to offer to sell to CogenAmerica certain   
independent power plants developed by NRG, (2) NRG has agreed to provide certain
management services to CogenAmerica and CogenAmerica has agreed to reimburse NRG
for its costs incurred to provide the management services, and (3) NRG has      
agreed to manage the operation of independent power plants owned by CogenAmerica
in Morris, Illinois, and in Newark and Parlin, New Jersey, and CogenAmerica has 
agreed to pay NRG certain management fees and reimburses NRG for its operating  
costs. In connection with the completion of the merger, NRG and CogenAmerica    
will terminate these agreements and exchange mutual general releases.           

REGULATORY APPROVALS (PAGE 44)                                                  

CogenAmerica is required to make filings with or obtain approvals from
regulatory authorities in connection with the merger. These filings and         
approvals include filings with the Securities and Exchange Commission (the      
"SEC"), the Federal Trade Commission, the Department of Justice, the Federal    
Energy Regulatory Commission ("FERC") and the New Jersey Department of          
Environmental Protection. The filings with the SEC consist of this proxy        
statement and a Schedule 13E-3 providing certain disclosures to                 

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CogenAmerica stockholders concerning the merger and the parties to the          
transactions contemplated by the merger agreement. An application and notice was
filed with the Federal Trade Commission and the Department of Justice as        
required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act") on October 13, 1999. An application and notice was filed with   
the FERC on September 17, 1999. The requisite filings under the New Jersey      
Industrial Site Recovery Act were made on August 31, 1999.                      

APPRAISAL RIGHTS (PAGE 46)                                                      

    Any stockholder of CogenAmerica who does not vote in favor of the proposal
to approve the merger agreement and who strictly complies with the applicable   
provisions of Section 262 of the DGCL has appraisal rights to receive cash for  
the "fair value" for such holder's shares of CogenAmerica common stock, which   
may be more than, the same as, or less than the agreed consideration of $25.00  
per share. "Fair value" will be determined based on the value of the shares     
immediately before completion of the merger without any appreciation or         
depreciation in anticipation of the merger and may be more than, the same or    
less than the merger consideration of $25.00 per share. To exercise appraisal   
rights with respect to the merger, you must follow the required procedures      
precisely, which include the requirement to give written notice to CogenAmerica 
before the special meeting of your intent to demand payment. A stockholder who  
wishes to exercise appraisal rights under the DGCL must vote against or fail to 
vote for approval and adoption of the merger agreement. The provisions of       
Section 262 of the DGCL are attached to this proxy statement as Appendix D.     

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THE SPECIAL MEETING 

GENERAL                                                                         

  This proxy statement is furnished in connection with the solicitation of
proxies by the CogenAmerica Board of Directors for the special meeting of       
Stockholders of CogenAmerica to be held on December 16, 1999 at 9:00 a.m., local
time, at The Marquette Hotel, Universe Room, 50th Floor, 710 Marquette Avenue,  
Minneapolis, Minnesota and at any adjournments thereof.                         

PROPOSALS TO BE CONSIDERED AT THE SPECIAL MEETING                               

At the special meeting, the CogenAmerica stockholders will be asked to
consider and vote upon:                                                         

- a proposal to approve and adopt the merger agreement,               

- a proposal to approve and adopt the charter amendment, and          

    - consider and act upon such other matters as may properly come before the
special meeting.                                                  

   The merger is conditioned on the approval of the merger agreement and the
charter amendment by the CogenAmerica stockholders. Subject to the receipt of   
regulatory approvals, approval by the CogenAmerica stockholders and satisfaction
of other conditions, the merger agreement provides for the merger of Acquisition
Sub with and into CogenAmerica. If the proposed merger is completed, each issued
and outstanding share of CogenAmerica common stock at the effective time of the 
merger (other than shares owned by CogenAmerica, by Acquisition Sub and by      
stockholders who exercise their appraisal rights) will be converted into the    
right to receive $25.00 in cash. The charter amendment enables NRG to transfer  
and contribute to Acquisition Sub immediately prior to completion of the merger 
approximately 1.4 million shares of its CogenAmerica common stock in exchange   
for a 20% equity interest in Acquisition Sub. After completion of the merger,   
CogenAmerica will be owned 80% by Calpine and 20% by NRG.                       

RECORD DATE; VOTING POWER; VOTES REQUIRED                                       

    Only holders of record of CogenAmerica common stock on the record date are
entitled to notice of and to vote at the special meeting. As of November 12,    
1999, there were 6,857,269 shares of CogenAmerica common stock issued and       
outstanding and held by approximately 2,200 holders of record. Holders of record
of CogenAmerica common stock on the record date are entitled to one vote per    
share on any matter that may properly come before the special meeting. The      
quorum required to hold the special meeting is 60% of the shares of CogenAmerica
common stock entitled to vote at the meeting, present in person or by proxy. If 
a quorum is present, the affirmative vote of the holders of more than 66 2/3% of
the total voting power of the shares of CogenAmerica common stock entitled to   
vote is required to approve and adopt the merger agreement, and the affirmative 
vote of the holders of more than 50% of the shares of CogenAmerica common stock 
entitled to vote is required to approve the charter amendment.                  

     On the record date, NRG owned 3,106,612 shares of CogenAmerica common stock
or approximately 45.3% of the outstanding shares. Pursuant to the Calpine/NRG   
Agreement, NRG granted its proxy to Calpine to vote the CogenAmerica shares held
by NRG for                                                                      

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approval and adoption of the merger agreement and the charter amendment.        
Accordingly, CogenAmerica needs the affirmative vote of an additional 1,464,901 
shares to approve and adopt the merger agreement and 322,023 shares to approve  
the charter amendment.                                                          

VOTING PROCEDURES; PROXIES                                                      

     If you fail to vote, or vote to abstain, it will have the same legal effect
as a vote cast against the proposals. Your broker and, in many cases, your      
nominee will not have discretionary power to vote on the proposals to be        
presented at the special meeting. Accordingly, you should instruct your broker  
or nominee how to vote. A broker non-vote will have the same effect as a vote   
against the proposals.                                                          

 If there are insufficient votes to approve the proposals at the special
meeting and if you authorized your shares to be voted in favor of the           
adjournment of the special meeting in order to provide additional time to       
solicit additional proxies in favor of the proposals, your shares will be voted 
to adjourn the special meeting in order to solicit additional proxies in favor  
of the proposals. If the special meeting is adjourned or postponed for any      
purpose, at any subsequent reconvening of the special meeting, your proxy will  
be voted in the same manner as it would have been voted at the original         
convening of the meeting unless you withdraw or revoke your proxy. Your proxy   
may be voted this way even though it may have been voted on the same or any     
other matter at a previous meeting.                                             

     Under Delaware law, if you do not vote in favor of the proposals and comply
with certain notice requirements and other procedures, you will have the right  
to dissent and to be paid cash for the "fair value" of your shares as finally   
determined under such procedures. This payment may be more, the same as or less 
than the consideration to be received by other CogenAmerica stockholders under  
the terms of the merger agreement. If you fail to follow such procedures        
precisely, you may lose your appraisal rights. See "Appraisal Rights."          

  Each stockholder who signs and returns a proxy in the form enclosed with
this proxy statement may revoke the same at any time prior to its use by giving 
notice of such revocation to CogenAmerica in writing or in person at the special
meeting. Signing and returning a later dated proxy in the form enclosed with    
this proxy statement will revoke a prior proxy. Presence at the special meeting 
of a stockholder who has signed a proxy does not alone revoke that proxy. Unless
so revoked, all of the shares represented by each proxy will be voted at the    
special meeting and at any adjournments thereof. IF NO INSTRUCTIONS ARE         
INDICATED, SUCH PROXIES WILL BE VOTED FOR THE PROPOSALS TO APPROVE AND ADOPT THE
MERGER AGREEMENT AND THE CHARTER AMENDMENT, FOR POSTPONEMENT OR ADJOURNING OF   
THE SPECIAL MEETING FOR THE PURPOSE OF SOLICITING ADDITIONAL PROXIES FOR        
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT, THE CHARTER AMENDMENT AND, IN THE
DISCRETION OF THE PERSONS NAMED ON THE PROXY, ON SUCH OTHER MATTERS AS MAY      
PROPERLY BE PRESENTED AT THE SPECIAL MEETING.                                   

 The cost of preparing, assembling and mailing this proxy statement, the
notice, the proxy card and other material which may be sent to the stockholders 
will be borne by CogenAmerica. In addition, directors, officers and regular     
employees of CogenAmerica and its subsidiaries, at no additional compensation,  
may solicit proxies by telephone, telegram or in person. Upon request,          
CogenAmerica will reimburse brokers and other persons holding shares for the    
benefit of others for their expenses in forwarding proxies and accompanying     
material and in obtaining authorization from beneficial owners of CogenAmerica  
common stock to give proxies. CogenAmerica has also retained D.F.               

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King & Co., Inc. to assist in the solicitation of proxies. The proxy solicitor  
will receive customary fees and expense reimbursement for its services.         

In order to assure the presence of the necessary quorum at the special
meeting, please sign and mail the enclosed proxy promptly in the envelope       
provided. No postage is required if mailed within the United States. The signing
of the proxy will not prevent you from attending the meeting and voting in      
person, should you so desire.                                                   

HISTORICAL MARKET INFORMATION 

 CogenAmerica common stock is currently traded on Nasdaq National Market
tier of The Nasdaq Stock Market under the symbol "CGCA". From March 1997 to     
November 1997, the CogenAmerica common stock was traded on the Nasdaq SmallCap  
Market. Prior to March 1997, the CogenAmerica common stock was not listed on an 
exchange or on The Nasdaq Stock Market, but traded from time to time on the pink
sheets and on the OTC Bulletin Board. The following table sets forth the high   
and low sales prices for each quarterly period since 1997 from the quotations   
published by Nasdaq-Amex Online. Such prices may have reflected inter-dealer    
prices, without retail mark-ups, mark-downs or commissions, and may not         
necessarily represent actual transactions.                                      

                                                                [Download Table]

                                                              HIGH      LOW  
                                                             -------  -------
                                                                             
1999:                                                                        
First Quarter............................................... $ 9.375  $  8.00
Second Quarter.............................................. $ 14.50  $ 8.125
Third Quarter............................................... $24.438  $ 14.75
Fourth Quarter (through November 8, 1999)................... $ 24.50  $23.813
1998:                                                                        
First Quarter............................................... $19.531  $15.125
Second Quarter.............................................. $ 18.25  $13.313
Third Quarter............................................... $ 15.00  $  7.25
Fourth Quarter.............................................. $ 10.00  $ 7.625
1997:                                                                        
First Quarter............................................... $ 13.75  $ 11.25
Second Quarter.............................................. $ 16.00  $11.125
Third Quarter............................................... $ 21.00  $ 14.25
Fourth Quarter.............................................. $22.375  $ 18.00

On August 26, 1999, the last trading day prior to announcement of the 
execution of the merger agreement, the closing sale price per share of          
CogenAmerica common stock on The Nasdaq Stock Market as published by Nasdaq-Amex
Online was $16.813. On November 8, 1999, the closing sale price per share of    
CogenAmerica common stock was $24.438. The high and low bid quotations during   
the period from August 26, 1999 (the date the merger was signed) through        
November 8, 1999 were $24.50 and $16.813, respectively.                         

CogenAmerica has not paid any cash dividends on its common stock.     

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SELECTED CONSOLIDATED FINANCIAL DATA OF COGENAMERICA

The following table shows summarized historical financial data for    
CogenAmerica. This information is based on historical information presented in  
CogenAmerica's filings with the SEC. You should read all of the summary         
financial information in the table in connection with this historical financial 
information. This historical financial information is incorporated into this    
proxy statement by reference. See "Where You Can Find More Information" on page 
56. Effective December 31, 1996, CogenAmerica changed its fiscal year end from  
June 30 to December 31.                                                         

                                                        [Enlarge/Download Table]

                            SIX MONTHS  SIX MONTHS      YEAR           YEAR        SIX MONTHS      YEAR       YEAR       YEAR   
                              ENDED       ENDED        ENDED          ENDED          ENDED        ENDED      ENDED      ENDED   
                             JUNE 30,    JUNE 30,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   JUNE 30,   JUNE 30,   JUNE 30, 
                               1999        1998         1998           1997         1996(1)        1996       1995       1994   
                            ----------  ----------  ------------   ------------   ------------   --------   --------   -------- 
                                                    (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                            
                                                                                                                                
STATEMENT OF OPERATIONS                                                                                                         
DATA:                                                                                                                           
Revenues:                                                                                                                       
Energy....................   $ 45,302    $ 21,801     $ 52,216       $ 43,210       $ 21,669     $ 66,623   $ 74,455   $ 62,647 
Equipment sales and                                                                                                             
 services.................      7,096       8,334       19,342         19,415         15,607       25,344     19,639     24,304 
Rental....................         --       1,481        2,438          2,179          1,062        1,895      2,362      5,372 
Development fees and                                                                                                            
 other....................         --          --           --             --          1,578        2,685      5,791     14,266 
   Total..................     52,398      31,616       73,996         64,804         39,916       96,547    102,247    106,589 
Income (loss) before                                                                                                            
 extraordinary item.......     12,816       4,052        8,002         23,352          4,780      (17,713)   (40,919)   (16,501)
Net income (loss)(4)......     12,816       4,052        8,002         23,352          6,423      (17,713)   (40,919)   (16,501)
Basic earnings (loss) per                                                                                                       
 share(2):                                                                                                                      
 Before extraordinary                                                                                                           
   Item...................   $   1.87    $   0.59     $   1.17       $   3.59       $   0.75     $  (4.24)  $ (11.02)  $  (4.45)
 Extraordinary item.......         --          --           --             --           0.25           --         --         -- 
 After extraordinary                                                                                                            
   Item...................   $   1.87    $   0.59     $   1.17       $   3.59       $   1.00     $  (4.24)  $ (11.02)  $  (4.45)
Diluted earnings (loss)                                                                                                         
 per share(2):                                                                                                                  
 Before extraordinary                                                                                                           
   Item...................   $   1.85    $   0.58     $   1.15       $   3.48       $   0.74     $  (4.24)  $ (11.02)  $  (4.45)
 Extraordinary item.......         --          --           --             --           0.25           --         --         -- 
 After extraordinary                                                                                                            
   Item...................   $   1.85    $   0.58     $   1.15       $   3.48       $   0.99     $  (4.24)  $ (11.02)  $  (4.45)
BALANCE SHEET DATA:                                                                                                             
   Total assets...........   $341,612    $263,178     $318,674       $227,894       $173,624     $178,162   $189,748   $237,816 
Long-term debt, net of                                                                                                          
 current maturities:                                                                                                            
 Loans due NRG............     40,123       4,439       36,123          4,439         14,388       96,929         --         -- 
 Nonrecourse long-term                                                                                                          
   debt(3)................    186,810     201,077      189,848        143,697        143,972       60,415      3,405     60,310 
 Recourse long-term                                                                                                             
   debt...................     45,225      25,000       45,225         46,323          6,339        6,374         --      7,073 
   Total..................    272,158     230,516      271,196        194,459        164,699      163,718      3,405     67,383 
COMPUTATION OF RATIO OF                                                                                                         
 EARNINGS TO FIXED                                                                                                              
 CHARGES(5):                                                                                                                    
Pre-tax income (loss) from                                                                                                      
 continuing operation.....   $ 20,623    $  6,814     $ 12,880       $  2,898       $  4,512     $(18,176)  $(38,239)  $(14,588)
Undistributed income of                                                                                                         
 equity investees less                                                                                                          
 than 50% owned...........      2,247       2,646        4,784            105            162           61         --         -- 
Capitalized interest......         --       1,979        3,858            674             --           --         --         -- 
Fixed charges of 50% owned                                                                                                      
 person...................        970          --           --             --             --           --         --         -- 
Pre-tax income (loss) from                                                                                                      
 continuing operations                                                                                                          
 before adjustments for                                                                                                         
 minority interests in                                                                                                          
 consolidated subsidiaries                                                                                                      
 or income or loss from                                                                                                         
 equity investees.........   $ 17,406    $  2,189     $  4,238       $  2,119       $  4,350     $(18,237)  $(38,239)  $(14,588)
Fixed charges:                                                                                                                  
 Interest expense and                                                                                                           
   amortization of debt                                                                                                         
   expense................     11,310       7,039       15,855         14,768          7,681       18,646     20,583     18,013 
 Capitalized interest.....         --       1,979        3,858            674             --           --         --         -- 
 Fixed charges of 50%                                                                                                           
   owned person...........        970                                                                                           
 Rentals at one-third.....         --          27           54             59            168          268        433        436 
Total fixed charges.......   $ 12,280    $  9,045     $ 19,767       $ 15,501       $  7,849     $ 18,914   $ 21,016   $ 18,449 

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                                                        [Enlarge/Download Table]

                            SIX MONTHS  SIX MONTHS      YEAR           YEAR        SIX MONTHS      YEAR       YEAR       YEAR  
                              ENDED       ENDED        ENDED          ENDED          ENDED        ENDED      ENDED      ENDED  
                             JUNE 30,    JUNE 30,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   JUNE 30,   JUNE 30,   JUNE 30,
                               1999        1998         1998           1997         1996(1)        1996       1995       1994  
                            ----------  ----------  ------------   ------------   ------------   --------   --------   --------
                                                    (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                           
                                                                                                                               
Pre-tax income (loss) from                                                                                                     
 continuing operations                                                                                                         
 before adjustments for                                                                                                        
 minority interests in                                                                                                         
 consolidated subsidiaries                                                                                                     
 or income or loss from                                                                                                        
 equity investees plus                                                                                                         
 fixed charges, less                                                                                                           
 preferred stock dividend                                                                                                      
 requirements of                                                                                                               
 consolidated                                                                                                                  
 subsidiaries.............   $ 29,686    $ 11,234     $ 24,005       $ 17,620       $ 12,199     $    677   $(17,223)  $  3,861
Ratio of earnings to fixed                                                                                                     
 charges..................        2.4         1.2          1.2            1.1            1.6           --         --         --
COMPUTATION OF BOOK VALUE                                                                                                      
 PER SHARE:                                                                                                                    
Stockholders' equity                                                                                                           
 (deficit)................   $ 16,601    $   (124)    $ (3,813)      $ (4,202)      $(30,513)    $(37,573)  $(40,758)  $    136
Weighted average shares                                                                                                        
 outstanding -- diluted...   $  6,942    $  6,999     $  6,966       $  6,725       $  6,463     $  4,182   $  3,712   $  3,712
Book value per share......   $   2.39    $  (0.02)    $   0.55       $  (0.62)      $  (4.72)    $  (8.98)  $ (10.98)  $   0.04

---------------                                                                 

(1) Effective July 1, 1996, CogenAmerica changed its fiscal year-end from June  
30 to December 31.                                                      

(2) Net income (loss) per share has been restated for all periods presented to  
reflect the common shares issued under the terms of the plan of         
reorganization for O'Brien Environmental Energy, Inc. (now called       
    Cogeneration Corporation of America) which emerged from reorganization under
Chapter 11 of the Federal bankruptcy laws on April 30, 1996.            

(3) Amount at June 30, 1995 excludes $60,310 of long-term project financing     
 which was included in current liabilities due to a default under the debt
agreement.                                                              

(4) Amount for 1997 reflects a net tax benefit of $20,454 resulting from the    
reduction of a tax valuation allowance. See Note 16 of CogenAmerica's   
   Consolidated Financial Statements incorporated by reference into this proxy
statement.                                                              

(5) For the purposes of determining the ratio of earnings to fixed charges,     
"earnings" consists of income (loss) before income tax expense and      
   extraordinary item plus fixed charges less undistributed equity in earnings
  of less than 50% owned investees and capitalized interest. "Fixed charges"
  consist of interest (whether expensed or capitalized) plus amortization of
 deferred financing costs and one-third of rental expense (this portion is
considered to be representative of the interest factor). Earnings were  
    insufficient to cover fixed charges for the fiscal year ended June 30, 1994,
1995 and 1996 in the amounts of $14.6 million, $38.2 million and $18.2  
million, respectively. For the six months ended June 30, 1999, pre-tax  
income (loss) from continuing operations includes a one-time gain in the
amount of $14,536 representing the fair value of additional ownership   
interest in the Grays Ferry Cogeneration Partnership resulting from     
settlement of litigation.                                               

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PROPOSAL 1: THE MERGER

SPECIAL FACTORS 

BACKGROUND OF THE MERGER                                                        

   CogenAmerica's predecessor, O'Brien Environmental Energy, Inc., filed for
protection under Chapter 11 of the Federal bankruptcy laws on September 28,     
1994. NRG proposed a plan of reorganization that was approved by the Bankruptcy 
Court and O'Brien emerged from bankruptcy on April 30, 1996 under the name NRG  
Generating (U.S.) Inc. ("NRG Generating") which subsequently changed its name to
Cogeneration Corporation of America. Under the reorganization plan, NRG advanced
NRG Generating $71.2 million under loan agreements, purchased approximately     
41.86% of the NRG Generating common stock for approximately $21.2 million,      
purchased certain subsidiaries of NRG Generating for $7.5 million and funded a  
cash distribution to the former O'Brien stockholders totaling $7.5 million. The 
former O'Brien stockholders also retained the remaining common stock or         
approximately 58.14% of the then outstanding shares that were publicly traded.  
In addition, as part of the reorganization plan, NRG and NRG Generating entered 
into a co-investment agreement under which NRG agreed to offer NRG Generating   
ownership interests in certain power projects that NRG initially developed or   
had the right under contract to acquire from a third party and a management     
services agreement under which NRG agreed to provide, at its cost, management   
and support services. Pursuant to the co-investment agreement, CogenAmerica     
acquired from NRG the Pryor, Oklahoma plant for $23.9 million in 1998 and the   
Morris, Illinois plant for a development fee of $4.8 million paid to NRG plus   
assumption of liabilities related to the project in 1997. Because of NRG's      
substantial ownership of CogenAmerica and the number of NRG representatives on  
the CogenAmerica Board of Directors, the new bylaws for CogenAmerica approved as
part of the bankruptcy reorganization plan established an Independent Directors 
Committee of the Board of Directors that is responsible for making all decisions
for CogenAmerica in connection with the co-investment agreement and the         
management services agreement with NRG. Under the bylaws, the Independent       
Directors Committee must consist of at least two disinterested directors.       
Currently, the Independent Directors Committee is comprised of the three        
disinterested directors on the CogenAmerica Board of Directors, Mark Liddell,   
Lawrence I. Littman, and Charles J. Thayer.                                     

From January 26, 1999 through May 13, 1999, CogenAmerica received     
indications of interest from four independent power companies, including Calpine
and Bidder A, to acquire 100% of the equity interests of CogenAmerica. These    
indications of interest were not solicited by the Company or, to the Company's  
knowledge, by any person acting on behalf of the Company or NRG. The indications
of interest were at prices that ranged from $16.00 to $19.00 per share in cash. 
During this period, the range of the public trading prices for CogenAmerica     
common stock was $8.00 to $13.00 per share.                                     

  Based on the level of interest from the four parties and the significant
premium in their indications of interest over the then market price of the      
CogenAmerica common stock, management informed the CogenAmerica Board of        
Directors of the indications of interest and sought advice from financial and   
legal advisors on how best to proceed in considering the offers. Management     
contacted DLJ since DLJ had previously served as CogenAmerica's investment      
banker and was familiar with CogenAmerica's business and the independent power  
and public utility industries. Management also sought advice from Kaplan,       
Strangis and Kaplan, P.A. ("KSK"), a Minneapolis, Minnesota law firm            

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experienced in acquisition and merger transactions. Copies of the indications of
interest from the four parties were also provided to the directors of           
CogenAmerica. Based upon the advice of DLJ and KSK, and after the directors had 
reviewed that advice and considered their alternatives, a meeting of the        
CogenAmerica Board of Directors was scheduled for May 20, 1999.                 

    At the meeting of the CogenAmerica Board of Directors on May 20, 1999, the
directors reviewed the indications of interest, counsel explained the fiduciary 
duties of the CogenAmerica Board of Directors under the circumstances and DLJ   
provided a presentation on current industry conditions and the strategic        
alternatives available to the CogenAmerica Board of Directors. The CogenAmerica 
Board of Directors determined that a sale of 100% of the equity interests of    
CogenAmerica should be explored, approved the engagement of DLJ and KSK, and    
authorized DLJ to assist management and counsel in the conduct of a process for 
the sale of CogenAmerica.                                                       

 Following the May 20, 1999 CogenAmerica Board of Directors meeting, DLJ
assisted management in preparing an "Information Package" to provide interested 
parties with relevant information on CogenAmerica and its business, assets,     
operations and personnel. The Information Package consisted of (i) the Annual   
Report of CogenAmerica for the year ended December 31, 1998; (ii) the Quarterly 
Report on form 10-Q of CogenAmerica for the Quarter ended March 31, 1999; (iii) 
the Proxy Statement dated April 26, 1999 for CogenAmerica's annual stockholders 
meeting; and (iv) a financial model based on management's internal projections  
for each of CogenAmerica's existing six plants and consolidated statements for  
CogenAmerica for the period from January 1, 1999 to December 31, 2009. From May 
25, 1999 through June 4, 1999, DLJ contacted 13 parties in the independent power
industry or the public utility industry that had the financial resources to     
acquire CogenAmerica and that had been active in acquiring generation capacity. 
Nine of the 13 parties indicated an interest in reviewing the Information       
Package for CogenAmerica, including Calpine and Bidder A. CogenAmerica executed 
confidentiality agreements with each of the eight bidders that had not          
previously executed a confidentiality agreement. After each bidder had signed a 
confidentiality agreement, it received an Information Package. After receiving  
the Information Package, the nine parties were requested to submit preliminary  
indications of interest on June 11, 1999. Seven parties submitted preliminary   
indications of interest, while two parties declined to make a submission. The   
preliminary indications of interest ranged from a low of $15.09 per share to a  
high of $24.00 per share for 100% of the equity interests in CogenAmerica. On   
June 11, 1999, DLJ received an unsolicited indication of interest from an       
investment fund for an acquisition of CogenAmerica.                             

   On June 21, 1999, the CogenAmerica Board of Directors met to consider the
preliminary indications of interest. DLJ summarized the current status of the   
solicitation process and described the terms of each preliminary indication of  
interest. DLJ also advised the CogenAmerica Board of Directors that an          
investment fund had approached DLJ with an unsolicited indication of interest in
acquiring CogenAmerica. The CogenAmerica Board of Directors decided to continue 
the sale process with the five highest bidders and the investment fund upon its 
execution of a confidentiality agreement. Continuation of the sale process      
included allowing the six bidders access to CogenAmerica's management and       
records for purposes of conducting due diligence. The CogenAmerica Board of     
Directors established July 13, 1999 as the date on which the six remaining      
parties would be required to submit firm offers. The CogenAmerica Board of      

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Directors also decided to invite the highest bidder from the June 11 round of   
bids to make a preemptive bid.                                                  

The due diligence process included an opportunity to review of the    
corporate, legal and financial records of CogenAmerica, including material      
contracts, and a management presentation with an opportunity to ask questions of
management. Each prospective bidder was also provided forms of merger agreement 
with CogenAmerica and a stockholder agreement with NRG that had been prepared by
CogenAmerica's outside counsel with the input of management and NRG, and        
approved by CogenAmerica and NRG. The highest bidder in the June 11, 1999 round 
of bids declined to submit a preemptive offer. On July 13, 1999, the six parties
submitted their bids and comments on the proposed forms of merger agreement and 
stockholder agreement. The cash bids ranged from a low of $18.50 per share to a 
high of $23.00 per share. All of the bids also required CogenAmerica and NRG to 
terminate the Affiliate Agreements.                                             

   On July 15, 1999, the CogenAmerica Board of Directors met to consider the
bids. DLJ summarized the current status of the solicitation process and         
described the terms of each bid. Counsel reviewed the changes proposed by the   
bidders to the forms of merger agreement and stockholder agreement. In this     
round, Calpine and Bidder A were the highest bidders with bids of $22.50 per    
share and $23.00 per share, respectively. The CogenAmerica Board of Directors   
determined that negotiations should proceed with Calpine and Bidder A on the    
terms of the merger agreement and the stockholder agreement and that each party 
should complete its due diligence.                                              

   Later that day, Calpine and Bidder A were notified that they were the two
final bidders in the sale process and that their bids were virtually equal.     
Subsequently, representatives of NRG indicated to CogenAmerica's management and 
outside counsel that NRG might not be able to sell all of its equity interest in
CogenAmerica in light of the pending merger transaction involving NRG's parent  
company, Northern States Power Company ("NSP") which effectively limits the     
disposition of assets by parties to the merger. As a result, meetings of the    
Independent Directors Committee and the Board of Directors of CogenAmerica were 
scheduled for July 22, 1999.                                                    

   A meeting of the Independent Directors Committee was held by telephone on
July 22, 1999 followed by a meeting of the CogenAmerica Board of Directors. DLJ 
briefed the independent directors on the status of discussions with the         
remaining two bidders. Counsel apprised the Independent Directors Committee of  
the issue that NRG had raised and that resolution of the issue might require a  
different transaction structure. Counsel also updated the Independent Directors 
Committee on the progress of negotiations with NRG on the terms of an agreement 
pursuant to which the various contracts with NRG and its subsidiaries would be  
terminated in the event of a sale of CogenAmerica. The Independent Directors    
Committee and the Board of Directors of CogenAmerica determined that the new    
concerns regarding the transaction structure should be resolved as quickly as   
possible and that the sale process with the remaining two bidders should        
proceed.                                                                        

 On July 27, 1999, representatives from Calpine and its counsel met with
representatives of CogenAmerica and its management to negotiate Calpine's       
proposed changes to the form of merger agreement. Thereafter, NRG's             
representatives, with CogenAmerica's management and representatives present,    
negotiated with Calpine its proposed changes to the form of stockholder         
agreement with NRG. On July 28, 1999, representatives from Bidder A and its     
counsel met with representatives of CogenAmerica and its management to negotiate
Bidder A's proposed changes to the form of merger agreement. Thereafter,        

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NRG's representatives, with CogenAmerica's management and representatives       
present, negotiated with Bidder A its proposed changes to the form of           
stockholder agreement with NRG. At each meeting, counsel for CogenAmerica       
informed Calpine and Bidder A of the possibility of an alternative transaction  
structure. Both parties were willing to proceed with the sale process while a   
viable transaction structure was developed. Based on the negotiating sessions   
over the definitive agreements, CogenAmerica delivered to Calpine and Bidder A  
on or about July 30, 1999 revised forms of the merger agreement and stockholder 
agreement that were acceptable to CogenAmerica. The parties were requested to   
submit revised bids and any revisions to the merger agreement and the           
stockholder agreement by August 3, 1999.                                        

    On August 3, 1999, both Calpine and Bidder A submitted new bids, including
a mark-up of the merger agreement and stockholder agreement that each party was 
willing to execute. Calpine initially offered $23.52 per share in cash for 100% 
of the equity interests of CogenAmerica and Bidder A offered $24.00 per share in
cash for 100% of the equity interests in CogenAmerica. A meeting of the         
CogenAmerica Board of Directors was held on August 4, 1999 to consider the bids.
Shortly before the meeting, Calpine increased its bid to $24.52 per share in    
cash. At the meeting, DLJ summarized the sale process to date and confirmed its 
view that either party had the requisite financial resources available to       
consummate the transaction. Counsel described the material changes proposed by  
Calpine and Bidder A to the merger agreement and stockholder agreement. NRG's   
representative informed the CogenAmerica Board of Directors that the transaction
would have to be restructured to meet NRG's needs if a transaction were to      
proceed. The CogenAmerica Board of Directors then determined that the           
Independent Directors Committee should be given full control of the sale process
because NRG might have interests that differ from those of CogenAmerica and the 
unaffiliated stockholders. The Independent Directors Committee met briefly and  
requested that NRG outline the proposed structure of the transaction before     
requiring the two remaining bidders to submit final bids. The full CogenAmerica 
Board of Directors meeting then reconvened and the CogenAmerica Board of        
Directors was apprised of the determinations by the Independent Directors       
Committee.                                                                      

  On August 6, 1999, the Independent Directors Committee held a meeting to
determine how to proceed. Counsel reviewed the outline of the possible          
transaction structure developed by NRG's representatives, which remained subject
to approval by NRG's board of directors and advised the committee members that  
an outline of the proposed transaction could be provided to the two bidders     
later that day. The outline proposed that the winning bidder would have the     
right to acquire 80% of the equity interests in CogenAmerica and NRG would      
retain a 20% equity interest in CogenAmerica. Counsel confirmed that, as a      
result of the restructuring of the proposed transaction, NRG did in fact have   
interests that differed from those of CogenAmerica and the unaffiliated         
stockholders.                                                                   

Later that day, the two bidders received the outline of the proposed  
structure of the transaction. Each of the bidders was also advised that it would
have an opportunity to discuss and negotiate the proposed terms of a possible   
transaction with NRG and that each bidder would be required to resubmit its bid 
for CogenAmerica by the close of business on August 10, 1999. On Monday, August 
9, 1999, each party separately reviewed and negotiated the terms of a possible  
transaction with NRG representatives. Representatives of DLJ and KSK were       
present during such discussions.                                                

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At the close of business on August 10, 1999, both Calpine and Bidder A
resubmitted their respective bids. Each party provided a mark-up of the merger  
agreement previously provided by CogenAmerica to reflect the changes required by
it and a mark-up of the outline of the possible transaction structure. Neither  
party changed the price per share in its bid; Calpine offered $24.52 per share  
in cash and Bidder A offered $24.00 per share in cash for 80% of the equity     
interests in CogenAmerica.                                                      

On August 11 and 12, 1999, the Independent Directors Committee held   
telephonic meetings. At each meeting, DLJ reported on the rebids received from  
the two bidders and counsel summarized the changes to the merger agreement      
proposed by each bidder and reported the status of the continuing discussions   
between NRG and each bidder. Following the meetings, at the direction of the    
Independent Directors Committee, DLJ communicated with both bidders             
contemporaneously. Bidder A was informed that it needed to increase its bid and 
Calpine was advised that it needed to accept the merger agreement as proposed by
CogenAmerica and the outline as acceptable to NRG's management which remained   
subject to approval by NRG's board of directors.                                

In the evening of August 12, 1999, Calpine delivered a letter to      
CogenAmerica increasing its offer to $24.77 per share in cash, accepting the    
merger agreement as proposed by CogenAmerica, accepting the terms acceptable to 
NRG's management, which remained subject to approval by NRG's board of          
directors, and indicating its willingness to negotiate and finalize definitive  
documents on such terms. Calpine stated that its offer required an exclusive    
period through 5:00 p.m. Eastern Time on August 17, 1999 to finalize the        
documentation with NRG.                                                         

  On August 13, 1999, commencing at approximately 6:00 a.m., Central Time,
the Independent Directors Committee held a telephonic meeting. The Independent  
Directors Committee received reports from KSK and DLJ on the events that        
transpired the previous evening. At approximately 7:30 a.m., Central Time,      
Bidder A increased its offer to $24.77 per share, confirmed its acceptance of   
the merger agreement as proposed by CogenAmerica, and requested a two week      
exclusivity period to conclude negotiation of a definitive agreement with NRG on
the terms acceptable to NRG's management subject to NRG's Board approval. A     
representative of Bidder A verbally indicated to DLJ that Bidder A did not      
expect to increase its offer above $24.77 per share.                            

     The Independent Directors Committee reconvened its meeting at approximately
7:45 a.m., Central Time, on August 13, 1999. DLJ informed the independent       
directors of the August 13, 1999 letter from Bidder A and the conversation in   
which Bidder A indicated that it did not expect to increase its offer. After    
further discussion and considering the recommendations of DLJ and KSK, the      
Independent Directors Committee authorized DLJ to contact Calpine. DLJ was      
directed to inform Calpine that the Committee would accept Calpine's proposal   
with the following modifications: (1) the price would be $25.00 per share, (2)  
the merger agreement would be changed to provide for a one-step merger rather   
than a tender offer followed by a second-step merger, and (3) any debt of       
CogenAmerica that could be accelerated as a result of the merger, including the 
debt owed to NRG, would be repaid upon completion of the merger.                

  Calpine requested that the message be in writing and signed on behalf of
the Independent Directors Committee. Counsel for CogenAmerica then prepared a   
letter dated August 13, 1999 (the "August 13 Exclusivity Letter") incorporating 
the terms approved by the Independent Directors Committee. The August 13        
Exclusivity Letter was signed on behalf of the Independent Directors Committee  
and transmitted to Calpine via facsimile.                                       

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Calpine accepted the proposal and returned the August 13 Exclusivity Letter     
countersigned by Calpine. With the consent of Calpine, DLJ advised Bidder A that
Calpine had been given an exclusive period to conclude the documentation and no 
further communications would occur with Bidder A during the exclusive period.   

     CogenAmerica's counsel then informed NRG of the decision by the Independent
Directors Committee and provided NRG with a copy of the August 13 Exclusivity   
Letter and a revised merger agreement reflecting the change in the structure to 
a one-step merger from a tender offer followed by a second-step merger.         

 During the morning on August 16, 1999, Calpine and its counsel met with
CogenAmerica and its counsel to finalize the merger agreement. Commencing in the
afternoon of August 16, 1999 and continuing through August 19, 1999, Calpine,   
NRG and their respective counsel discussed the terms of the proposed Calpine/NRG
Agreement.                                                                      

  On August 19, 1999, Bidder A sent by facsimile a letter addressed to the
Board of Directors of NRG, the Independent Directors Committee and the          
CogenAmerica Board of Directors. The letter affirmed the interest of Bidder A to
proceed with a transaction and increased its bid to $24.99 per share. Because   
CogenAmerica was bound by the exclusivity terms of the August 13 Exclusivity    
Letter, no response to Bidder A's letter was made by CogenAmerica or its        
officers, directors, employees, agents or representatives.                      

   On August 19, 1999, a Calpine representative advised CogenAmerica and NRG
that the Calpine board of directors approved the merger agreement and the       
Calpine/NRG Agreement.                                                          

    On August 25, 1999, an NRG representative advised CogenAmerica and Calpine
that the NRG board of directors approved the Calpine/NRG Agreement. Meetings of 
the Independent Directors Committee and Board of Directors of CogenAmerica were 
called for 9:00 a.m. and 12:00 noon, respectively, on August 26, 1999.          

  On August 26, 1999, commencing at approximately 9:00 a.m., Central Time,
the Independent Directors Committee held a meeting. All independent directors   
were present in person as were representatives of DLJ and KSK. At the request of
the independent directors, a representative of O'Melveny & Myers ("O&M"),       
counsel to the Independent Directors Committee, attended by telephone.          
Representatives of KSK briefed the Independent Directors Committee regarding    
their fiduciary duties and the terms of the merger agreement, the Calpine/NRG   
Agreement, the agreement between CogenAmerica and NRG (the "Termination         
Agreement") terminating the Affiliate Agreements upon completion of the merger, 
and an agreement among CogenAmerica, Calpine and NRG (the "Cooperation          
Agreement") pursuant to which the parties agree to cooperate with each other in 
the preparation of this Proxy Statement and the Schedule 13E-3 that are required
to be filed with the SEC. Copies of the final agreements were available to the  
independent directors and were reviewed during the meeting. Representatives of  
DLJ briefed the Independent Directors Committee on the sale process and the     
bases for DLJ's fairness opinion. DLJ also delivered its executed fairness      
opinion addressed to the Independent Directors Committee. The independent       
directors also reviewed the benefits and detriments of the proposed merger to   
the unaffiliated stockholders of CogenAmerica. The factors considered by the    
Independent Directors Committee are discussed below in the section called       
"Reasons for the Merger." After considering these factors and the advice of its 
financial and legal advisors, the Independent Directors Committee unanimously   
approved the merger agreement, the charter amendment, the Calpine/NRG Agreement,
the Termination Agreement and the Cooperation Agreement, and unanimously recom- 

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mended that the CogenAmerica Board of Directors approve the merger agreement,   
the charter amendment, the Calpine/NRG Agreement and the Cooperation Agreement. 

    Following conclusion of the meeting of the Independent Directors Committee
and commencing at approximately 12:00 noon, Central Time, the CogenAmerica Board
of Directors convened its meeting in Minneapolis, Minnesota to consider the     
transactions contemplated by the merger agreement. All directors of CogenAmerica
were present in person, except for Craig A. Mataczynski and Michael O'Sullivan  
who participated by telephone. KSK briefed the CogenAmerica Board of Directors  
on the fiduciary duties of the directors and the terms of the merger agreement, 
the Calpine/NRG Agreement, the Termination Agreement and the Cooperation        
Agreement. Copies of the agreements were available to the directors at the      
meeting and were reviewed during the presentation by KSK on the agreements.     
Representatives of DLJ reviewed the sale process and the bases for DLJ's        
fairness opinion. DLJ also confirmed that it had delivered its executed fairness
opinion to the Independent Directors Committee and that the entire CogenAmerica 
Board of Directors was entitled to rely on the opinion. The directors also      
reviewed the benefits and detriments of the proposed merger to the unaffiliated 
stockholders of CogenAmerica. The factors considered by the CogenAmerica Board  
of Directors are discussed below in the section called "Reasons for the Merger."
After considering these factors and the advice of the financial and legal       
advisors to CogenAmerica, the CogenAmerica Board of Directors unanimously       
approved the merger agreement, the charter amendment, the Calpine/NRG Agreement 
and the Cooperation Agreement, and unanimously recommended that the CogenAmerica
stockholders approve the merger agreement and the charter amendment.            

   After the close of business on August 26, 1999, CogenAmerica executed and
delivered the merger agreement to Calpine, the Cooperation Agreement to Calpine 
and NRG, and the Termination Agreement to NRG. Contemporaneously, Calpine       
executed and delivered the merger agreement to CogenAmerica, the Cooperation    
Agreement to CogenAmerica and NRG, and the Calpine/NRG Agreement to NRG.        
Contemporaneously, NRG executed and delivered the Termination Agreement to      
CogenAmerica, the Cooperation Agreement to CogenAmerica and Calpine, and the    
Calpine/NRG Agreement to Calpine. Press releases announcing the transactions    
contemplated by the merger agreement and Calpine/NRG Agreement were issued on   
the morning of August 27, 1999.                                                 

PURPOSE, TIMING AND STRUCTURE OF THE MERGER                                     

   The purpose for the merger is to enable Calpine to acquire 80% and NRG to
retain 20% of the entire equity interests of CogenAmerica in a transaction that 
provides the public stockholders of CogenAmerica and NRG, to the extent its     
equity interest in CogenAmerica is not being retained, with the opportunity to  
sell all of their CogenAmerica common stock at a price which represents a       
substantial premium over market prices in effect immediately prior to the       
announcement of the merger.                                                     

The timing of the execution of the merger agreement resulted from an  
extensive sale process conducted by CogenAmerica after it had received four     
indications of interest for the acquisition of CogenAmerica at significant      
premiums to the then market price of CogenAmerica common stock. In addition, the
market for the sale of independent power company assets has recently been       
favorable to sellers of such assets as significant consolidation is occurring in
the independent power industry. In addition, the Independent Directors Committee
and the Board of Directors of CogenAmerica concluded that sufficient additional 
capital for CogenAmerica to make acquisitions and expand its business would be  
difficult to obtain given CogenAmerica's current leverage and current stock     
price                                                                           

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and that the development of new plants, so called "green field" projects, would 
be time consuming and involved significant risk that they would not be completed
after substantial management time and expense had been invested in the projects.

   The transaction was structured to achieve both (1) the requirement by NRG
that it retain a 20% interest in CogenAmerica after completion of the merger and
(2) the requirement of Calpine that it acquire the remaining 80% equity interest
in CogenAmerica in a single transaction, while at the same time facilitating a  
direct cash payment at a premium price to all holders of CogenAmerica common    
stock (other than shares held by CogenAmerica, by Acquisition Sub or by         
stockholders who properly exercise their appraisal rights). CogenAmerica also   
wished to present its stockholders with a simple transaction that treats equally
all unaffiliated stockholders.                                                  

Acquisition Sub is currently a wholly owned subsidiary of Calpine.    
Immediately prior to the completion of the merger, NRG will contribute shares of
CogenAmerica common stock to Acquisition Sub which will enable NRG to retain a  
20% equity interest in CogenAmerica after completion of the merger. Calpine     
formed Acquisition Sub shortly before execution of the merger agreement for the 
sole purpose of carrying out the merger.                                        

REASONS FOR THE MERGER                                                          

The Independent Directors Committee and the Board of Directors of     
CogenAmerica have determined that the merger is substantively fair to the       
unaffiliated stockholders of CogenAmerica for the reasons listed in factors (1) 
through (8) below, and is procedurally fair to the unaffiliated stockholders of 
CogenAmerica for the reasons listed in factors (1), (7), (9) and (10) below and 
because (i) the Independent Directors Committee consisting only of board members
representing solely the interest of CogenAmerica and the stockholders other than
NRG approved the transaction, (ii) the Independent Directors Committee was      
advised by independent legal counsel retained to negotiate on behalf of         
CogenAmerica and the stockholders other than NRG, (iii) the Independent         
Directors Committee retained, and received advice from, DLJ as its independent  
financial advisor which assisted in the conduct of a sale process and in the    
evaluation of the proposed transaction, (iv) the $25.00 per share price and the 
other terms and conditions of the merger agreement resulted from an extensive   
sale process and arms'-length bargaining between representatives of the         
Independent Directors Committee and Calpine and their advisors. See "Special    
Factors -- Recommendations of the Independent Directors Committee and the Board 
of Directors." The Independent Directors Committee and the Board of Directors of
CogenAmerica unanimously recommend that the CogenAmerica stockholders approve   
and adopt the merger agreement and the charter amendment. In reaching these     
conclusions, the Independent Directors Committee and the Board of Directors of  
CogenAmerica considered and analyzed a number of factors. All of the material   
factors considered by the CogenAmerica Board of Directors are described below.  

   1. Competitive Sale Process. The merger consideration of $25.00 per share
was arrived at after an intense and competitive sale process. During the sale   
process, 13 parties were contacted of which seven parties submitted preliminary 
indications of interest ranging from $15.09 to $24.00 per share for 100% of the 
equity interests of CogenAmerica. Six parties were invited to conduct extensive 
due diligence after which firm bids were submitted. The bids ranged from $18.50 
to $23.00 per share for 100% of the equity interests in CogenAmerica. The two   
highest bidders, Calpine and Bidder A, were invited to conduct on-site plant    
visits and to negotiate the terms of the definitive documents. Calpine          

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and Bidder A subsequently submitted final bids of $25.00 and $24.77,            
respectively. Both the Independent Directors Committee and the Board of         
Directors of CogenAmerica determined that the manner in which the sale process  
was conducted was a very important factor in concluding that the price resulting
from that process was fair to the unaffiliated stockholders.                    

   2. Premium over Current Market Price. On August 25, 1999, the trading day
immediately preceding the meetings of the Independent Directors Committee and   
the Board of Directors of CogenAmerica, the closing sales price for CogenAmerica
common stock was $16.75 per share. The merger consideration of $25.00 per share 
represented a premium of 49.3% over the closing market price on August 25, 1999.
Both the Independent Directors Committee and the Board of Directors of          
CogenAmerica concluded that the significant premium over the current market     
price was a very important factor in favor of the transaction and determining   
the merger consideration was fair to the unaffiliated stockholders.             

     3. Premium over Historical Market Price. The merger consideration of $25.00
per share represented a significant premium over the historical market price of 
CogenAmerica common stock. The following premiums over historical market price  
were considered to be very important factors to both the Independent Directors  
Committee and the Board of Directors of CogenAmerica in favor of the transaction
and in their determination that the merger consideration was fair to the        
unaffiliated stockholders:                                                      

                                                                [Download Table]

                                                                    PREMIUM    
                                                                OVER HISTORICAL
             DATE OR PERIOD TO MEASURE PREMIUM                   MARKET PRICE  
             ---------------------------------                  ---------------
                                                                               
January 26, 1999 (the first date a bidder met formally with                    
  NRG to express its interest in an acquisition                                
  transaction)..............................................         170.3%    
May 20, 1999 (the date the CogenAmerica Board of Directors                     
  determined to explore strategic alternatives).............         102.0%    
July 29, 1999 (four weeks prior to the approval of the                         
  merger agreement by the Independent Directors Committee                      
  and the Board of Directors of CogenAmerica)...............          40.8%    
August 19, 1999 (one week prior to the approval of the                         
  merger agreement by the Independent Directors Committee                      
  and the Board of Directors of CogenAmerica)...............          50.4%    

In addition, both the Independent Directors Committee and the Board of Directors
of CogenAmerica considered very important the fact that the historical daily    
trading volume of CogenAmerica common stock was relatively small, it being in   
the range of 12,000 to 13,000 shares or approximately 0.2% of the outstanding   
shares. The merger would enable all unaffiliated stockholders to sell their     
shares for cash without any depressing effect that the sale of a considerable   
number of shares might have on the market price of the CogenAmerica common      
stock.                                                                          

4. Presentation and Opinion of DLJ. Both the Independent Directors    
Committee and the Board of Directors of CogenAmerica considered very important  
the presentation made by DLJ at their meetings on August 26, 1999 and DLJ's     
fairness opinion addressed to the Independent Directors Committee in determining
that the merger was fair to the unaffiliated stockholders. For a discussion of  
the DLJ presentation, see the caption entitled "Opinion of Financial Advisor"   
below and see Appendix C for a copy of the full text of                         

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the written opinion of DLJ dated August 26, 1999 which sets forth assumptions   
made, matters considered and limitations on the review undertaken in connection 
with the opinion.                                                               

5. Going Concern Value. As part of its presentation to the Independent
Directors Committee and the Board of Directors of CogenAmerica on August 26,    
1999, DLJ presented a discounted cash flow analysis of the value of CogenAmerica
as a going concern. Depending on the assumptions for discount rate and multiple 
of earnings before interest, taxes, depreciation and amortization for the       
terminal value, the discounted cash flow analysis indicated an implied value of 
CogenAmerica common stock in the range of $9.62 per share to $22.39 per share.  
Although the Independent Directors Committee and the Board of Directors of      
CogenAmerica considered the going concern value (as expressed by the discounted 
cash flow analysis by DLJ) as an important factor supporting the fairness of the
merger consideration to the unaffiliated stockholders, this factor was somewhat 
less important than the other four factors discussed above.                     

 6. Future Prospects as a Public Company. Both the Independent Directors
Committee and the Board of Directors of CogenAmerica considered the future      
prospects of CogenAmerica as an independent public company. In order for        
CogenAmerica to continue its growth, CogenAmerica had to acquire or develop     
additional independent power plants. CogenAmerica would require additional      
capital to provide the financial resources necessary for the acquisition or     
development of new projects. Due to the current high leverage of CogenAmerica,  
additional debt might not be available or, if available, would be at high       
interest rates. An analysis by management indicated that the sale of            
CogenAmerica common stock at a price below $20.00 per share would be dilutive of
future earnings and, therefore, not a viable alternative to raising capital.    
Also, due to the low earnings multiple for CogenAmerica and the competitive     
prices for independent power plants, it would be difficult for CogenAmerica to  
make acquisitions using its stock that would be accretive to future earnings.   
The current competitive market for existing independent power plants made       
acquisitions of existing plants expensive. The development of new plants,       
so-called "green field" projects, required a substantial amount of time and     
investment without any assurance that CogenAmerica would be awarded the project.
Based on CogenAmerica's capital constraints and risks of future expansion, both 
the Independent Directors Committee and the Board of Directors of CogenAmerica  
considered this factor to be important in determining that the merger was the   
best alternative for the unaffiliated stockholders.                             

    7. Right to Terminate Merger Agreement. After following certain procedures
and paying Calpine a termination fee of $7,500,000, CogenAmerica has the right  
to terminate the merger agreement in order to accept a superior takeover        
proposal from a third party. This so-called "fiduciary out" provision is        
described in "Summary of Material Features of the Merger -- Termination" below. 
The Calpine/NRG Agreement provides that the agreement terminates in the event   
the merger agreement terminates. As a result, if CogenAmerica received a        
superior takeover proposal from a third party, it would be able to terminate the
merger agreement by following the requisite procedures, and NRG would be able to
enter into an agreement with the third party on terms comparable to the Calpine/
NRG Agreement. This would enable the Independent Directors Committee and the    
Board of Directors of CogenAmerica to accept a takeover proposal that provides  
more value to the unaffiliated stockholders of CogenAmerica. Both the           
Independent Directors Committee and the Board of Directors of CogenAmerica      
considered the fiduciary out provision of the                                   

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merger agreement a significant factor in determining the merger was fair to the 
unaffiliated stockholders.                                                      

8. Financial Ability of Calpine. Calpine has the financial ability to 
complete the merger and support CogenAmerica's future business operations. The  
merger agreement is not conditioned on financing by Calpine. Both the           
Independent Directors Committee and the Board of Directors of CogenAmerica      
considered the financial ability of Calpine to fund the merger consideration to 
be a significant factor in approving the merger agreement.                      

  9. Appraisal Rights. Stockholders of CogenAmerica who do not support the
merger or are dissatisfied with the consideration to be received by the holders 
of CogenAmerica common stock are able to obtain "fair value" for their shares if
they properly exercise their appraisal rights under the DGCL. Both the          
Independent Directors Committee and the Board of Directors of CogenAmerica      
considered the ability of unaffiliated stockholders to exercise their appraisal 
rights as a favorable factor, but not as important as the factors enumerated    
above in paragraphs 1 through 8.                                                

10. Stockholder Vote. The proposed merger is not conditioned on the   
approval of at least a majority of unaffiliated shareholders. Pursuant to the   
Calpine/NRG Agreement, NRG has granted its proxy to Calpine to vote the         
CogenAmerica shares held by NRG for approval and adoption of the merger         
agreement and the charter amendment. Since the proposed merger requires the     
approval of more than 66 2/3% of the outstanding shares of CogenAmerica common  
stock and NRG owns approximately 45.3% of the outstanding CogenAmerica common   
stock, unaffiliated shareholders owning an aggregate of approximately 39.1% of  
the outstanding CogenAmerica common stock held by unaffiliated shareholders need
to vote in favor of the proposals to enable the proposed merger to proceed.     
Based on the fact that Calpine would not proceed with the transaction unless NRG
agreed to grant its proxy to Calpine to vote NRG's CogenAmerica shares in favor 
of the merger agreement and the charter amendment at the special meeting and    
that, as discussed in paragraph 7 above, the Calpine/NRG Agreement would        
terminate in the event the CogenAmerica Board of Directors exercised its        
"fiduciary out" to terminate the merger agreement in order to accept a superior 
takeover proposal from another party, the Independent Directors Committee and   
the Board of Directors of CogenAmerica did not consider the lack of a vote of   
the majority of the unaffiliated shareholders as an important factor and        
concluded that the proposed transaction is procedurally fair despite the absence
of a requirement that a majority of the unaffiliated shareholders approve the   
proposed merger.                                                                

  11. Net Book Value. The Independent Directors Committee and the Board of
Directors of CogenAmerica did not consider the net book value of CogenAmerica as
a relevant factor in its determination.                                         

    12. Liquidation Value. Neither the Independent Directors Committee nor the
Board of Directors of CogenAmerica considered the liquidation value of          
CogenAmerica as a relevant factor in its determination. A liquidation of the    
assets would result in CogenAmerica paying taxes on the gain from the sale of   
its assets. Therefore, the net proceeds from the sale of its assets would be    
reduced by taxes and transaction costs before any distribution could be made to 
stockholders.                                                                   

  13. Price Paid by NRG for CogenAmerica Common Stock. NRG facilitated the
reorganization of CogenAmerica's predecessor in 1996 under Chapter 11 of the    
Federal Bankruptcy Laws by contributing an aggregate of $21.2 million to the    
predecessor in                                                                  

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exchange for 2,710,357 shares of the predecessor's common stock representing    
approximately 41.86% of the outstanding shares of CogenAmerica common stock     
after giving effect to such issuance. The price per share of CogenAmerica common
stock paid by NRG was $3.27. Since the operations of CogenAmerica have          
substantially improved since that time, including the addition of two plants    
after the 1996 reorganization, neither the Independent Directors Committee nor  
the Board of Directors of CogenAmerica considered the price paid by NRG for its 
shares of CogenAmerica common stock as a relevant factor in its determination.  

In view of the variety of factors considered in connection with its   
evaluation of the merger, the Independent Directors Committee and the Board of  
Directors of CogenAmerica found it impracticable to, and did not, quantify, rank
or otherwise assign relative weights to the reasons for the merger described    
above or determine that any reason was of particular importance in reaching its 
determination that the merger is fair to and in the best interest of            
CogenAmerica stockholders (other than NRG), except that the factors enumerated  
in paragraphs 1 through 4 above were the most important, the factors enumerated 
in paragraphs 5 and 6 above were important, the factors in paragraphs 7 and 8   
were also important but less significant than the first six factors, the factor 
enumerated in paragraph 9 was less significant than the first eight factors, the
factor enumerated in paragraph 10 was not important, and the factors enumerated 
in paragraphs 11 through 13 were not relevant. The Independent Directors        
Committee and the Board of Directors of CogenAmerica view their recommendations 
as being based upon their judgment, in light of the totality of the information 
presented and considered, as summarized in the reasons for the merger described 
above, and the overall effect of the merger on CogenAmerica's stockholders      
compared to continuing the business of CogenAmerica in the ordinary course or   
seeking other potential parties to effect a business combination.               

RECOMMENDATIONS OF THE INDEPENDENT DIRECTORS COMMITTEE AND THE BOARD OF         
DIRECTORS                                                                       

The Independent Directors Committee is a standing committee of the    
CogenAmerica Board of Directors that is comprised of three disinterested        
directors. The purpose of the Independent Directors Committee is to consider and
act upon matters where the interests of NRG, as the principal stockholder and   
whose officers constitute four members of the CogenAmerica Board of Directors,  
may be in conflict with the interests of the unaffiliated stockholders of       
CogenAmerica. When it became apparent in the sale process undertaken by         
CogenAmerica that NRG would be treated differently from the unaffiliated        
stockholders of CogenAmerica, the Independent Directors Committee took over     
control of the sale process. The Independent Directors Committee then retained  
financial and legal advisors to assist it in the sale process and the other     
matters related to the transactions contemplated by the merger agreement. On    
August 26, 1999, the Independent Directors Committee determined that the merger 
was in the best interests of CogenAmerica and was fair to CogenAmerica          
stockholders (other than NRG). Accordingly, the Independent Directors Committee 
unanimously approved the merger agreement, the charter amendment, the           
Termination Agreement, the Calpine/NRG Agreement and the Cooperation Agreement, 
and recommended that the CogenAmerica Board of Directors approve the merger     
agreement, the charter amendment and the Cooperation Agreement after receiving  
reports from its financial and legal advisors, including reports on the sale    
process, the terms of the operative documents and the valuation analysis by DLJ,
and the written opinion from DLJ that, as of its date and subject to the        
assumptions, limitations and qualifications set forth in the written opinion,   
the consideration to be paid to the CogenAmerica                                

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stockholders (other than NRG) in the merger was fair from a financial point of  
view. The Independent Directors Committee took such actions for the reasons set 
forth above under the caption "Reasons for the Merger."                         

Following the meeting of the Independent Directors Committee, the     
CogenAmerica Board of Directors held a meeting on August 26, 1999 to consider   
the transactions contemplated by the merger agreement. The CogenAmerica Board of
Directors received reports from financial and legal advisors for CogenAmerica.  
The reports included a review of the sale process, a discussion of the terms of 
the operative agreements and the valuation analysis by DLJ. DLJ also provided   
the directors with a copy of the opinion of DLJ addressed to the Independent    
Directors Committee that, as of its date and subject to the assumptions,        
limitations and qualifications set forth in the written opinion, the            
consideration to be paid to the stockholders other than NRG in the merger was   
fair from a financial point of view, and DLJ indicated that the directors were  
entitled to rely on the opinion. The Independent Directors Committee also       
informed the CogenAmerica Board of Directors that it had unanimously approved   
the merger agreement, the charter amendment, the Termination Agreement, the     
Calpine/NRG Agreement and the Cooperation Agreement, and unanimously recommended
that the CogenAmerica Board of Directors approve the merger agreement, the      
charter amendment and the Cooperation Agreement. Based on these reports and     
recommendations and for the reasons set forth above under the caption "Reasons  
for the Merger," the CogenAmerica Board of Directors also determined that the   
merger was in the best interests of CogenAmerica and was fair to the            
unaffiliated stockholders of CogenAmerica. The CogenAmerica Board of Directors  
unanimously approved the merger agreement, the charter amendment, the           
Calpine/NRG Agreement and the Cooperation Agreement and recommended that the    
CogenAmerica stockholders approve the merger agreement and the charter          
amendment.                                                                      

THE INDEPENDENT DIRECTORS COMMITTEE AND THE BOARD OF DIRECTORS OF     
COGENAMERICA HAVE UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE CHARTER     
AMENDMENT, AND THE COGENAMERICA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT  
THE COGENAMERICA STOCKHOLDERS VOTE FOR APPROVAL AND ADOPTION OF THE MERGER      
AGREEMENT AND THE CHARTER AMENDMENT.                                            

OPINION OF FINANCIAL ADVISOR                                                    

   CogenAmerica asked DLJ, in its role as financial advisor to CogenAmerica,
to render an opinion to the Independent Directors Committee of CogenAmerica as  
to the fairness, from a financial point of view, to the holders of CogenAmerica 
common stock, other than NRG, of the consideration to be received by such       
holders in the merger. On August 26, 1999, DLJ delivered to the Independent     
Directors Committee its written opinion to the effect that, as of such date,    
based on and subject to the assumptions, limitations and qualifications set     
forth in such written opinion, the consideration to be received in the merger by
the holders of CogenAmerica common stock, other than NRG, was fair to such      
holders from a financial point of view.                                         

THE FULL TEXT OF DLJ'S OPINION IS ATTACHED AS APPENDIX C TO THIS PROXY
STATEMENT. THE SUMMARY OF DLJ'S OPINION SET FORTH IN THIS PROXY STATEMENT IS    
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF DLJ'S OPINION.       
COGENAMERICA STOCKHOLDERS ARE URGED TO READ DLJ'S OPINION CAREFULLY AND IN ITS  
ENTIRETY FOR THE PROCEDURES FOLLOWED, ASSUMPTIONS MADE, OTHER MATTERS CONSIDERED
AND LIMITS OF THE REVIEW BY DLJ IN CONNECTION WITH SUCH OPINION.                

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 DLJ PREPARED ITS OPINION FOR THE INDEPENDENT DIRECTORS COMMITTEE SOLELY
WITH RESPECT TO THE FAIRNESS FROM A FINANCIAL POINT OF VIEW OF THE CONSIDERATION
TO BE RECEIVED IN THE MERGER BY HOLDERS OF COGENAMERICA COMMON STOCK, OTHER THAN
NRG, AS OF THE DATE THEREOF. DLJ EXPRESSED NO OPINION AS TO THE PRICES AT WHICH 
COGENAMERICA COMMON STOCK WOULD ACTUALLY TRADE AT ANY TIME AND DOES NOT ADDRESS 
THE RELATIVE MERITS OF THE MERGER AND THE OTHER BUSINESS STRATEGIES CONSIDERED  
BY THE INDEPENDENT DIRECTORS COMMITTEE NOR DOES IT ADDRESS THE INDEPENDENT      
DIRECTORS COMMITTEE'S DECISION TO PROCEED WITH THE MERGER. DLJ'S OPINION DOES   
NOT ADDRESS ANY OTHER ASPECT OF THE MERGER NOR DOES IT CONSTITUTE A             
RECOMMENDATION TO ANY COGENAMERICA STOCKHOLDER AS TO HOW TO VOTE ON THE MERGER  
AND SHOULD NOT BE RELIED UPON BY ANY STOCKHOLDER AS SUCH.                       

CogenAmerica selected DLJ as its financial advisor because DLJ is an  
internationally recognized investment banking firm that has substantial         
experience providing strategic advisory services. DLJ was not retained as an    
advisor or agent to the stockholders of CogenAmerica or any other person. As    
part of its investment banking business, DLJ is regularly engaged in the        
valuation of businesses and securities in connection with mergers, acquisitions,
underwritings, sales and distributions of listed and unlisted securities,       
private placements and valuations for corporate and other purposes. CogenAmerica
did not impose any restrictions or limitations upon DLJ with respect to the     
investigations made or the procedures followed by DLJ in rendering its opinion. 
For purposes of rendering its opinion, DLJ among other things, reviewed the     
Agreement and Plan of Merger and the company letter, dated August 26, 1999, and 
the Calpine/NRG Agreement, also dated August 26, 1999, which sets forth the     
essential terms and conditions upon which NRG would be able to sell its         
CogenAmerica common stock. DLJ also reviewed certain financial and other        
business information that was publicly available or furnished by CogenAmerica,  
including information provided during discussions with management, for recent   
years and interim periods to date. Included in the information provided during  
discussions with management were certain internal financial forecasts and       
projections of the Company for the period beginning January 1, 1999 and ending  
December 31, 2009 prepared by the management of the Company. DLJ met with the   
management of CogenAmerica to review and discuss such information and the       
Company's business, operations, assets, financial condition and future          
prospects.                                                                      

   In addition, DLJ reviewed the historical stock prices and trading volumes
of CogenAmerica common stock, reviewed prices and premiums paid in certain other
business combinations and conducted such other financial studies, analyses and  
investigations as DLJ deemed appropriate for purposes of rendering its opinion. 

   In rendering its opinion, DLJ assumed and relied upon without independent
verification the accuracy and completeness of all of the financial and other    
information that was available to it from public sources, that was provided to  
it by CogenAmerica, or its representatives, or that was otherwise reviewed by   
DLJ. With respect to the financial projections and assumptions supplied to DLJ, 
DLJ assumed that they were reasonably prepared on bases reflecting the best     
currently available estimates and judgments of the management of CogenAmerica as
to the future operating and financial performance of CogenAmerica. DLJ expressed
no opinion with respect to such projections, forecasts and analyses or the      
assumptions upon which they were based. DLJ did not make any independent        
valuation or appraisal of the assets or liabilities of CogenAmerica and did not 
make any independent verification of the information reviewed by DLJ. DLJ was   
not furnished with any such valuations or appraisals. DLJ's opinion was         
necessarily based on economic, market, financial and other conditions as they   
existed on, and on the                                                          

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information made available to DLJ as of, the date of its opinion. DLJ states in 
its opinion that, although subsequent developments may affect its opinion, DLJ  
does not have any obligation to update, revise or reaffirm its opinion.         

  The following is a summary of the financial analyses presented by DLJ to
the Independent Directors Committee on August 26, 1999 in connection with the   
preparation of DLJ's opinion.                                                   

     Common Stock Trading History. DLJ examined the historical closing prices of
CogenAmerica common stock from August 20, 1998 to August 23, 1999. During this  
time period, CogenAmerica common stock reached a high of $18.13 per share and a 
low of $7.94 per share. DLJ also examined the historical trading range of       
CogenAmerica common stock from August 20, 1998 to August 23, 1999 relative to an
independent power producer index made up of The AES Corporation, Calpine        
Corporation, MidAmerican Energy Holdings Company, Trigen Energy Corporation and 
CogenAmerica. This information was presented solely to provide the Independent  
Directors Committee with background information on the stock price of           
CogenAmerica over the periods indicated.                                        

  Premiums Paid Analysis. DLJ determined the premium over the common stock
trading prices for one day, one week and four weeks prior to the announcement   
date in all merger and acquisition transactions of U.S. public companies ranging
from $250 million to $750 million in size announced between January 1, 1996 and 
August 20, 1999. DLJ obtained information for this analysis from Securities Data
Corp. DLJ analyzed the high, low and median of the premiums paid one day, one   
week and four weeks prior to the announcement date. The median premiums for the 
selected transactions over the common stock trading prices for one day, one week
and four weeks prior to the announcement date were 23.3%, 29.3% and 36.7%,      
respectively. Applying the median premiums to the closing price of CogenAmerica 
one day, one week and four weeks prior to the announcement date, DLJ estimated a
value per share of CogenAmerica common stock ranging from $21.42 to $24.61.     

   Comparable Publicly Traded Company Analysis. As part of its analysis, DLJ
compared the market values and trading multiples of CogenAmerica with that of   
the following publicly traded independent power companies:                      

1. The AES Corporation                                                

2. Calpine Corporation                                                

    3. MidAmerican Energy Holdings Company (formerly CalEnergy Company, Inc.),
and                                                                             

4. Trigen Energy Corporation.                                         

In examining these comparable companies, DLJ calculated the enterprise value of 
each company as a multiple of its respective: LTM revenue; LTM EBITDA and LTM   
EBIT. LTM means last reported twelve months. EBITDA means earnings before       
interest expense, income taxes, depreciation and amortization. EBIT means       
earnings before interest expense and income taxes. DLJ also calculated the      
equity value of each company as a multiple of its respective: LTM net income;   
and projected net income for the calendar year 1999. The enterprise value of a  
company is equal to the value of its fully-diluted common equity plus debt and  
the liquidation value of outstanding preferred stock, if any, minus cash and the
value of certain other assets, including minority interests in other entities.  
Projected net income for the calendar year 1999 was obtained from First Call    
estimates.                                                                      

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For the purpose of this analysis, DLJ calculated EBITDA and EBIT to include     
equity in income/loss of affiliates, and calculated enterprise value to include 
investment in unconsolidated affiliates.                                        

   DLJ's analysis of the comparable companies yielded the following: revenue
multiples for the LTM ended June 30, 1999 ranging from 1.8x to 8.3x; EBITDA     
multiples for the LTM ended June 30, 1999 ranging from 7.9x to 16.7x; EBIT      
multiples for the LTM ended June 30, 1999 ranging from 14.1x to 24.8x; net      
income multiples for the LTM ended June 30, 1999 ranging from 9.7x to 41.6x; and
projected net income multiples for the calendar year 1999 ranging from 14.0x to 
34.0x. Based on an analysis of this data and CogenAmerica's results for         
comparable periods, DLJ estimated a value per share of CogenAmerica common stock
ranging from $16.10 to $34.40.                                                  

    These companies were selected by DLJ because they are in the same business
as CogenAmerica, which is the independent power business, and because they have 
publicly traded securities. These companies comprise all of the independent     
power companies which have publicly traded securities. However, no company      
utilized in the comparable public company analysis is identical to CogenAmerica.
Accordingly, an analysis of the results of the foregoing necessarily involves   
complex considerations and judgments concerning differences in financial and    
operating characteristics of CogenAmerica and other factors that could affect   
the public trading value of the companies to which it is being compared. In     
evaluating the comparable companies, DLJ made judgments and assumptions with    
regard to industry performance, general business, economic, market and financial
conditions and other matters, many of which are beyond the control of           
CogenAmerica, such as the impact of competition on CogenAmerica and the industry
generally, industry growth and the assumed absence of any adverse material      
change in the financial conditions and prospects of CogenAmerica or the industry
or in the financial markets in general. Mathematical analysis (such as          
determining the mean or median) is not, in itself, a meaningful method of using 
comparable company data.                                                        

Precedent Merger and Acquisition Transaction Analysis. DLJ analyzed   
acquisition multiples paid in the acquisition of Sithe Energies by Marubeni     
Corporation. This was the most comparable acquisition of a publicly traded      
independent power company occurring prior to August 26, 1999. DLJ's analysis of 
this comparable transaction yielded the following: (i) a revenue multiple for   
the LTM ended September 30, 1995 of 3.3x; (ii) an EBITDA multiple for the LTM   
ended September 30, 1995 of 10.4x; (iii) an EBIT multiple for the LTM ended     
September 30, 1995 of 13.7x; and (iv) a net income multiple for the LTM ended   
September 30, 1995 of 29.2x. Based on an analysis of this data and              
CogenAmerica's results for comparable periods, DLJ estimated a value per share  
of CogenAmerica common stock ranging from $20.81 to $32.80.                     

Using publicly available information, DLJ also reviewed certain       
acquisitions involving the sale of generation assets by various independent     
power companies and public utilities conducted over the year to date period     
beginning January 1, 1999. In examining these transactions, DLJ analyzed the    
enterprise value of the acquired assets as a multiple of their net generating   
capacity. DLJ applied the high, low, median and average of these multiples to   
CogenAmerica's net generating capacity to obtain an enterprise value, and equity
value per share. DLJ's analysis yielded an enterprise value multiple range of   
$147/kW to $955/kW. Based on an analysis of this data and CogenAmerica's net    
generating capacity, DLJ estimated a valuation range of CogenAmerica common     
stock with a high end of $27.78 per share. The other end of the range was deemed
not meaningful due to CogenAmerica's relatively high enterprise value to net    
generating capacity compared to the                                             

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sample transactions that were examined by DLJ. No transaction utilized as a     
comparison in the analysis of selected precedent transactions is identical to   
the merger in both timing and size. Accordingly, an analysis of the results of  
the foregoing necessarily involves complex considerations and judgments         
concerning differences in financial and operating characteristics of            
CogenAmerica and other factors that would affect the acquisition value of the   
companies to which it is being compared. In evaluating the precedent            
transactions, DLJ made judgments and assumptions with regard to industry        
performance, global business, economic, market and financial conditions and     
other matters, many of which are beyond the control of CogenAmerica, such as the
impact of competition on CogenAmerica and the industry generally, industry      
growth and the assumed absence of any adverse material change in the financial  
conditions and prospects of CogenAmerica or the industry or the financial       
markets in general. Mathematical analysis (such as determining the mean or      
median) is not, in itself, a meaningful method of using precedent transactions  
data.                                                                           

     Discounted Cash Flow ("DCF") Analysis. DLJ also performed a DCF analysis of
the projected cash flows of CogenAmerica for the fiscal years ending December   
31, 2000 through December 31, 2009, using projections and growth assumptions    
provided by the management of CogenAmerica. The DCFs for CogenAmerica were      
estimated using discount rates ranging from 9% to 11%, based on estimates of and
judgments related to the weighted average costs of capital of CogenAmerica, and 
terminal multiples of estimated EBITDA for CogenAmerica's fiscal year ending    
December 31, 2009 ranging from 9.0x to 12.0x. Based on this analysis, DLJ       
estimated a value per share of CogenAmerica common stock ranging from $9.62 to  
$22.39.                                                                         

   The summary set forth above does not purport to be a complete description
of the analyses performed by DLJ but describes, in summary form, the material   
elements of the presentation made by DLJ to the Independent Directors Committee 
on August 26, 1999. The preparation of a fairness opinion involves various      
determinations as to the most appropriate and relevant methods of financial     
analysis and the application of these methods to the particular circumstances   
and, therefore, such an opinion is not readily susceptible to partial analysis  
or summary description. Each of the analyses conducted by DLJ was carried out in
order to provide a different perspective on the transaction and to add to the   
total mix of information available. DLJ did not form a conclusion as to whether 
any individual analysis, considered in isolation, supported or failed to support
an opinion as to fairness from a financial point of view. Rather, in reaching   
its conclusion, DLJ considered the results of the analyses in light of each     
other and ultimately reached its opinion based on the results of all analyses   
taken as a whole. DLJ did not place any particular reliance or weight on any    
individual analysis or factor considered by it, but instead concluded that its  
analyses, taken as a whole, supported its determination. Accordingly,           
notwithstanding the separate factors summarized above, DLJ has indicated to     
CogenAmerica that it believes that its analyses must be considered as a whole   
and that selecting portions of its analyses and the factors considered by it,   
without considering all analyses and factors, could create an incomplete view of
the evaluation process underlying its opinion. The analyses performed by DLJ are
not necessarily indicative of actual values or future results, which may be     
significantly more or less favorable than suggested by such analyses. Such      
analyses were prepared solely as part of DLJ's analysis of the fairness of the  
merger price, pursuant to the merger agreement, from a financial point of view  
to the holders of shares of CogenAmerica common stock, other than NRG, and were 
provided to the CogenAmerica Board of Directors in connection with the delivery 
of DLJ's written opinion, dated August 26, 1999. The analyses do not purport to 
be appraisals or to reflect the prices at which CogenAmerica might actually be  
sold. In addition, as described above, DLJ's                                    

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opinion and presentation to the CogenAmerica Board of Directors is one of many  
factors taken into consideration by the CogenAmerica Board of Directors in      
making its determination to approve the merger. Consequently, the DLJ analysis  
described above should not be viewed as determinative of the opinion of the     
CogenAmerica Board of Directors or the view of the management of CogenAmerica   
with respect to the value of CogenAmerica.                                      

Other Relationships. In the ordinary course of business, DLJ and its  
affiliates may own or actively trade the securities of CogenAmerica, Calpine and
NSP for their own accounts and for the accounts of their customers and,         
accordingly, may at any time hold a long or short position in CogenAmerica, NSP 
or Calpine securities. In addition, DLJ, as part of its investment banking      
services, is regularly engaged in the valuation of businesses and securities in 
connection with mergers, acquisitions, underwritings, sales and distributions of
listed and unlisted securities, private placements and valuations for estate,   
corporate and other purposes. DLJ has performed investment banking services for 
CogenAmerica and Calpine in the past and has been compensated for such services.
DLJ acted as co-lead manager for Calpine's secondary offering of 7,200,000      
common shares which closed in November 1999.                                    

    Engagement Letter. Pursuant to the terms of a letter agreement, dated June
3, 1999, between CogenAmerica and DLJ, CogenAmerica (1) has agreed to pay DLJ   
(a) a retainer fee of $200,000 and (b) a fee of $750,000 upon notification by   
DLJ that it is prepared to deliver a fairness opinion with respect to a         
transaction covered under the letter agreement, and (2) a transaction fee equal 
to $2,500,000; plus, if the price per share of the outstanding CogenAmerica     
common stock in any transaction exceeds $21.00, three percent (3%) of the amount
by which such price per share exceeds $21.00 multiplied by the number of shares 
of CogenAmerica common stock outstanding (treating any shares issuable upon     
exercise of options, warrants or other rights of conversion as outstanding) upon
consummation of the merger. The fees paid to DLJ pursuant to clause (1) of the  
first sentence of this paragraph are to be deducted from the transaction fee to 
which DLJ is entitled upon consummation of the merger. In addition, CogenAmerica
has agreed to reimburse DLJ, upon request by DLJ from time to time, for all     
out-of-pocket expenses (including the reasonable fees and expenses of counsel)  
incurred by DLJ in connection with its engagement and to indemnify DLJ and      
certain related persons against certain liabilities and expenses in connection  
with its engagement, including liabilities under federal securities laws. DLJ   
and CogenAmerica negotiated the terms of the fee arrangement. DLJ has consented 
to this summary of this opinion and the attachment of this opinion as an        
appendix to this proxy statement.                                               

PERSPECTIVE OF NRG ON THE FAIRNESS OF THE MERGER                                

NRG has concluded that the merger and related transactions are fair to
CogenAmerica and the unaffiliated CogenAmerica stockholders. In addition, the   
Independent Directors Committee and DLJ made a determination as to the          
substantive fairness of the transaction. See "Special Factors - Recommendations 
of the Independent Directors Committee and the Board of Directors" and          
"-- Opinion of Financial Advisor." NRG's conclusion is based upon the following 
reasons:                                                                        

          1. The Independent Directors Committee consisted only of board members
representing solely the interests of CogenAmerica and the stockholders
other than NRG.                                                       

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     2. The Independent Directors Committee was advised by independent
legal counsel retained to negotiate on behalf of CogenAmerica and the 
stockholders other than NRG.                                          

        3. The Independent Directors Committee retained, and received advice
    from, DLJ as its independent financial advisor to assist in the conduct of
  a sale process and assist in the evaluation of the proposed transaction.

       4. The $25.00 per share price and the other terms and conditions of
the merger agreement resulted from an extensive sale process and      
arms'-length bargaining between representatives of the Independent    
Directors Committee and Calpine and their respective advisors.        

       5. The conclusions and recommendations of the Independent Directors
Committee and the Board of Directors (see "Special Factors -          
 Recommendations of the Independent Directors Committee and the Board of
Directors" and "-- Opinion of Financial Advisor.")                    

The affirmative vote of more than 66 2/3% of the outstanding shares of
CogenAmerica common stock is required to approve and adopt the merger agreement 
and related transactions. NRG currently holds 45.3% of the outstanding shares of
CogenAmerica common stock and has granted a proxy to Calpine to vote the        
CogenAmerica shares owned by NRG for adoption and approval of the merger        
agreement and charter amendment. See "Summary-Record Date; Voting Power; Votes  
Required." The transaction is not structured to require the affirmative vote of 
a majority of unaffiliated stockholders to approve the merger. Nevertheless,    
approval of the merger requires the affirmative vote of a significant amount of 
unaffiliated stockholders. In addition, the Independent Directors Committee did 
not perceive the lack of a vote of the majority of unaffiliated stockholders as 
an important factor in its consideration of the merger agreement and related    
transactions on behalf of the Company and its unaffiliated stockholders. See    
"Reasons for the Merger -- Stockholder Vote." In light of the foregoing, NRG    
believes that the merger agreement and related transactions are procedurally    
fair despite the absence of a requirement that the majority of unaffiliated     
CogenAmerica stockholders approve the transaction.                              

PLANS FOR COGENAMERICA AFTER THE MERGER                                         

CogenAmerica has been advised by Calpine that it intends to conduct a 
review of CogenAmerica and its assets, corporate structure, dividend policy,    
capitalization, operations, properties and policies and to consider, subject to 
the terms of the merger agreement, what, if any, changes would be desirable in  
light of the circumstances then existing, and reserves the right to take such   
actions or effect such changes as it deems desirable. Such changes could include
changes in CogenAmerica's business, operations, corporate structure,            
capitalization, Board of Directors, or policies.                                

    Upon consummation of the merger, Calpine will own 80% of the fully-diluted
equity and voting power of CogenAmerica. The merger agreement provides that the 
directors and officers of Acquisition Sub will be the directors and officers of 
CogenAmerica after the completion of the merger. The Calpine/NRG Agreement      
provides that the board of directors of the surviving corporation will consist  
of no more than seven directors, one of which shall be appointed by NRG.        

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Except as described in this proxy statement, CogenAmerica and its     
affiliates currently have no plans or proposals which relate to or would result 
in an extraordinary corporate transaction involving CogenAmerica or any of its  
subsidiaries, such as a merger, reorganization, liquidation, relocation of any  
operations or sale or other transfer of a material amount of assets, any change 
in the CogenAmerica Board of Directors or management (other than as described   
above), any material change in CogenAmerica's capitalization or dividend policy 
or any other material change in CogenAmerica's corporate structure or business, 
CogenAmerica Board of Directors or management.                                  

CERTAIN EFFECTS OF THE MERGER                                                   

 As a result of the merger, the equity interests of CogenAmerica will be
owned 80% by Calpine and 20% by NRG, and the current stockholders, other than   
NRG, will have no continuing interest in CogenAmerica. Therefore, following the 
merger, the stockholders of CogenAmerica, other than NRG, will no longer benefit
from any increases in the value of CogenAmerica and will no longer bear the risk
of any decreases in the value of CogenAmerica. Following the merger, the        
operation of CogenAmerica will be subject, among other things, to the agreements
between Calpine and NRG reflected in the Calpine/NRG Agreement. For a           
description of the Calpine/NRG Agreement, see the section under the caption     
"Summary of Calpine/NRG Agreement" below.                                       

     Following the merger, the CogenAmerica common stock will no longer meet the
requirements of The Nasdaq National Market for continued listing and therefore  
will be delisted from The Nasdaq National Market.                               

    CogenAmerica common stock is currently registered as a class of securities
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").     
Registration of the CogenAmerica common stock under the Exchange Act may be     
terminated upon application of CogenAmerica to the SEC if the CogenAmerica      
common stock is not listed on a national securities exchange or quoted on the   
Nasdaq National Market and there are fewer than 300 record holders of the       
CogenAmerica common stock. Termination of registration of the CogenAmerica      
common stock under the Exchange Act would substantially reduce the information  
required to be furnished by CogenAmerica to its stockholders and to the SEC and 
would make certain provisions of the Exchange Act, such as the short-swing      
trading provisions of Section 16(b), the requirement of furnishing a proxy      
statement in connection with the stockholders' meetings pursuant to Section     
14(a), and the requirements of Rule 13e-3 under the Exchange Act with respect to
"going private" transactions, no longer applicable to CogenAmerica. It is the   
present intention of Calpine and NRG to cause CogenAmerica to make an           
application for the termination of the registration of the CogenAmerica common  
stock under the Exchange Act as soon as practicable after completion of the     
merger.                                                                         

UNSOLICITED OFFERS FROM THIRD PARTIES                                           

    Since entering into the merger agreement on August 26, 1999 to the date of
this proxy statement, CogenAmerica has not received any unsolicited offers from 
third parties for a merger or other business combination involving CogenAmerica 
or any of its subsidiaries or any unsolicited proposal or offer to acquire in   
any manner a substantial equity interest in, a substantial portion of the voting
securities of, or a substantial portion of the assets of CogenAmerica or any of 
its subsidiaries, other than the transactions contemplated by the merger        
agreement.                                                                      

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CONFLICTS OF INTEREST                                                           

   In considering the actions of the Independent Directors Committee and the
Board of Directors of CogenAmerica with respect to the merger, stockholders     
should be aware that directors and officers of CogenAmerica, as well as NRG,    
have interests in connection with the merger which may present them with actual 
or potential conflicts of interest as summarized below. The CogenAmerica Board  
of Directors was aware of these interests and considered them among the other   
matters described, but such conflicts,                                          
individually or in the aggregate, did not influence the determination of the    
Independent Directors Committee or the Board of Directors of CogenAmerica that  
the merger is fair to and in the best interests of the CogenAmerica stockholders
(other than NRG).                                                               

    Arrangements with NRG. As of the close of business on August 26, 1999, the
date on which the merger agreement was signed, NRG beneficially owned 3,106,612 
shares of CogenAmerica common stock, or approximately 45.3% of the outstanding  
shares of CogenAmerica common stock. NRG and its subsidiaries also have various 
agreements with CogenAmerica and its subsidiaries that affect the operation and 
conduct of CogenAmerica's business. The agreements consist of the following: (1)
a co-investment agreement pursuant to which NRG agreed to offer to sell         
CogenAmerica certain independent power plants which is how CogenAmerica acquired
the power plants it currently owns in Pryor, Oklahoma and Morris, Illinois; (2) 
a management services agreement pursuant to which NRG provides certain          
management and technical services to CogenAmerica and its subsidiaries and is   
reimbursed for its costs and expenses for providing the services; (3) separate  
operation and maintenance agreements (each an "O&M Agreement") for              
CogenAmerica's plants in Newark and Parlin, New Jersey and Morris, Illinois     
pursuant to which NRG operates those plants in return for a fixed annual fee    
subject to certain offsets plus reimbursement of all costs and expenses incurred
to operate the plants; (4) loan and security agreements pursuant to which NRG   
made certain loans to CogenAmerica or its subsidiaries and was granted certain  
security interests in the assets of CogenAmerica or its subsidiaries; and (5)   
various agreements pursuant to which either NRG or CogenAmerica sold the other  
certain assets or stock of certain corporations. Pursuant to the co-investment  
agreement, NRG sold CogenAmerica the plant in Pryor, Oklahoma for $23.9 million 
in 1998 and the plant in Morris, Illinois for a development fee of $4.8 million 
paid to NRG plus assumption of liabilities related to the project. For the year 
ended December 31, 1998 and the six months ended June 30, 1999, NRG has charged 
CogenAmerica $422,227 and $52,527, respectively, under the management services  
agreement. For the year ended December 31, 1998 and the six months ended June   
30, 1999, NRG has charged CogenAmerica management fees of $147,033 and $73,641, 
respectively, and operating cost reimbursements of $35,657 and $17,904,         
respectively, under the O&M Agreement for the Newark, New Jersey plant. For the 
year ended December 31, 1998 and the six months ended June 30, 1999, NRG has    
charged CogenAmerica management fees of $196,044 and $98,189, respectively, and 
operating cost reimbursements of $59,705 and $24,180, respectively, under the   
O&M Agreement for the Parlin, New Jersey plant. For the year ended December 31, 
1998 and the six months ended June 30, 1999, NRG has charged CogenAmerica       
management fees of none and $166,667, respectively, and operating cost          
reimbursements of none and $35,883, respectively, under the O&M Agreement for   
the Morris, Illinois plant. As of August 31, 1999, CogenAmerica owed NRG for    
borrowed money an aggregate of $55,191,100 consisting of $53,933,649 in         
principal and $1,257,451 in accrued interest. In connection with completion of  
the merger, the various Affiliate Agreements will be terminated pursuant to the 

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Termination Agreement and the NRG and CogenAmerica parties will exchange mutual 
general releases subject to certain exceptions.                                 

Arrangements between Calpine and NRG. In addition to the Calpine/NRG  
Agreement, Calpine and NRG entered into an acknowledgement pursuant to which NRG
consented to the execution of certain agreements by CogenAmerica at the         
effective time of the merger with Calpine including (i) a tax sharing agreement,
(ii) a management services agreement, (iii) operating and maintenance agreements
for certain of CogenAmerica's project subsidiaries and (iv) a form of energy    
services agreement which may be entered into with certain of CogenAmerica's     
project subsidiaries.                                                           

     The tax sharing agreement, which will be entered into at the effective time
of the merger, allocates responsibility between Calpine and CogenAmerica for    
preparing and filing tax returns and specifies which party will make tax        
payments and how tax liabilities and obligations will be allocated among the    
parties.                                                                        

    The form of energy services agreement, if entered into between Calpine and
a CogenAmerica project subsidiary, provides that Calpine will provide fuel      
management, marketing and contract administration services in connection with   
such subsidiary's gas agreements and will perform certain other services related
to the project. The agreement also provides that Calpine will provide marketing,
scheduling and contract administration services with respect to power generated 
by each such project. Under the agreement, in exchange for such services,       
CogenAmerica will pay Calpine $10,000 per month in the aggregate for all project
subsidiaries which execute energy services agreements.                          

     The management services agreement, if entered into at the effective time of
the merger, will be on substantially the same terms as CogenAmerica's existing  
management services agreement with NRG. The management services agreement       
provides that Calpine will provide management, administrative, operation,       
maintenance and certain other services to CogenAmerica in connection with       
CogenAmerica's day to day business.                                             

   The operating and maintenance agreement for the Morris, Illinois, Newark,
New Jersey and Parlin, New Jersey projects, if entered into at the effective    
time of the merger, will be on substantially the same terms as CogenAmerica's   
existing operating and maintenance agreements with NRG for such projects. The   
operating and maintenance agreement for the Pryor, Oklahoma project, if entered 
into at the effective time of the merger, will be in a form previously agreed to
by Calpine and NRG.                                                             

  Directors and Officers of CogenAmerica. Four members of the CogenAmerica
Board of Directors were officers of NRG as of the date the CogenAmerica Board of
Directors approved the merger agreement. David H. Peterson, a director and      
Chairman of CogenAmerica, is Chairman of the Board, President and Chief         
Executive Officer of NRG. Craig A. Mataczynski, a director of CogenAmerica, is  
the President and Chief Executive Officer of NRG's North America Division.      
Ronald J. Will, a director of CogenAmerica, is the Managing Director and Chief  
Executive Officer of NRG's European operations. Michael O'Sullivan, a director  
of CogenAmerica, was a Vice President of NRG's North America Division until he  
resigned effective September 3, 1999 to accept a position with a party not      
affiliated with NRG. Messrs. Peterson, Mataczynski and Will each hold options to
acquire 30,000 shares of CogenAmerica common stock at an exercise price of      
$5.4375 per share. NRG has advised CogenAmerica that current NRG corporate      
policy prohibits NRG employees, including Messrs. Peterson, Mataczynski and     
Will, from receiving the economic benefit of the options granted to them in     
their capacities as directors of                                                

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CogenAmerica. The NRG employees who serve as directors of CogenAmerica and were 
previously granted stock options in their capacity as directors of CogenAmerica,
have agreed to the cancellation of their stock options. The amount of NRG's     
required contribution into Acquisition Sub will be reduced by the amount        
determined by multiplying (i) the number of cancelled options by (ii) the excess
of $25.00 over the exercise prices for the options, thereby ensuring that NRG   
receives credit equal to the value of the cancelled options by the Board members
who are employees of NRG. The NRG employees who serve as directors of           
CogenAmerica and whose options have been cancelled will receive no cash payment 
for these options. Julie A. Jorgensen, a director and the President and Chief   
Executive Officer of CogenAmerica, owns 1,500 shares of CogenAmerica common     
stock and has options to purchase 30,000 shares of CogenAmerica common stock at 
$9.125 per share and 200,000 shares of CogenAmerica common stock at $11.5625 per
share, including 100,000 shares which will become vested and exercisable as a   
result of the completion of the merger. The three disinterested directors who   
comprise the Independent Directors Committee are Mark Liddell, Lawrence I.      
Littman and Charles T. Thayer. CogenAmerica has a policy of granting options to 
non-employee directors. Mr. Liddell who was elected as a director at the 1999   
annual meeting has an option to acquire 10,000 shares of CogenAmerica common    
stock at $12.375 per share which will become vested and exercisable upon        
completion of the merger. Mr. Littman owns 70 shares of CogenAmerica common     
stock and has options to acquire 30,000 shares at an exercise price of $5.4375  
per share. Mr. Thayer owns 40,000 shares of CogenAmerica common stock and has   
options to acquire 10,000 shares at an exercise price of $5.4375 per share. A   
description of the value of options for each executive officer is included under
"Interests in Securities of CogenAmerica" (page 53).                            

     Severance Agreements for Officers. Under the employment agreement dated May
1, 1999 between CogenAmerica and Ms. Jorgensen, Ms. Jorgensen will be entitled  
to terminate her employment after completion of the merger and receive a lump   
sum severance payment equal to her base annual salary ($200,000) plus her       
current annual target bonus ($100,000) for a total payment of $300,000. On June 
11, 1999, the Compensation Committee of the CogenAmerica Board of Directors     
adopted a severance policy for designated employees, including officers other   
than Ms. Jorgensen, that provides the following severance in the event of a     
termination of employment for any reason after the merger: (1) the payment in a 
lump sum of the balance of the employee's 1999 base salary and target bonus or  
maximum bonus depending upon the timing of the payment elected by the employee; 
(2) the payment in a lump sum of the employee's base salary for a specified     
period that is 12 months for officers of CogenAmerica, and (3) continuation of  
health, dental, life and disability insurance benefits for the severance period.
Assuming that the merger and termination of employment occurs on December 15,   
1999, officers of CogenAmerica other than Ms. Jorgensen would receive the       
following payments for salary and bonus: $278,092 (target bonus) or $459,292    
(maximum bonus) to Timothy P. Hunstad, Vice President and Chief Financial       
Officer; $307,558 (target bonus) or $507,958 (maximum bonus) to Richard C.      
Stone, Vice President -- Business Development and Marketing; and $208,125       
(target bonus) or $329,625 (maximum bonus) to Thomas L. Osteraas, General       
Counsel and Secretary.                                                          

     Indemnification. The bylaws of CogenAmerica provide for the indemnification
of its directors and officers against expenses and liabilities in connection    
with any proceeding by reason of his or her being or having been a director or  
officer. The merger agreement provides that for six years after the merger,     
Calpine will cause CogenAmerica to indemnify all past and present officers and  
directors of CogenAmerica and its subsidiaries to the same                      

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extent as is indemnified at the date of the merger agreement for acts or        
omissions occurring at or prior to the merger. Calpine also agreed to provide,  
or cause CogenAmerica as the surviving corporation in the merger, for not less  
than six years after the merger, a directors' and officers' insurance and       
indemnification policy providing coverage for events occurring prior to the     
merger with coverage substantially similar to CogenAmerica's existing policy or,
if substantially similar coverage is unavailable, then best available coverage. 
Calpine and CogenAmerica are not collectively required to pay premiums of more  
than $360,000 in any calendar year.                                             

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SUMMARY OF MATERIAL FEATURES OF THE MERGER

THE MERGER                                                                      

    General. The merger agreement provides that, subject to its conditions and
in accordance with the DGCL, Acquisition Sub will be merged into CogenAmerica   
when a certificate of merger is filed with the Delaware Secretary of State or   
such other date or time as is stated in the certificate of merger. Following the
merger, the separate existence of Acquisition Sub will cease, and CogenAmerica  
will continue as the surviving corporation. At the effective time, each issued  
and outstanding share of CogenAmerica common stock, other than shares owned by  
CogenAmerica, by Acquisition Sub or by stockholders who exercise their appraisal
rights, will be converted into the right to receive, upon surrender of the      
certificate formerly representing the shares of CogenAmerica common stock (the  
"Certificate"), $25.00 in cash. As a result of the merger, the CogenAmerica     
common stock will no longer be publicly traded and the equity of the surviving  
corporation will be owned 80% by Calpine and 20% by NRG.                        

Merger Consideration. When the merger is completed, each share of     
CogenAmerica common stock issued and outstanding immediately prior to the       
effective time of the merger will no longer be outstanding and will             
automatically be canceled and retired. Each holder of a Certificate will have   
only the right to receive an amount in cash equal to the number of such shares  
multiplied by $25.00 per share at the time the Certificate is surrendered.      

Payment for Shares. As soon as practicable, after the effective time, 
America Stock Transfer Company (the "Payment Agent") will mail to each holder of
record of a Certificate a form of letter of transmittal which instructs         
CogenAmerica stockholders how to surrender their shares of CogenAmerica common  
stock and receive the merger consideration. Risk of loss and title to the       
Certificate will pass only when the Payment Agent receives delivery. When a     
record holder has delivered to the Payment Agent all Certificates for its shares
of CogenAmerica common stock together with the duly executed letter of          
transmittal, the Payment Agent will issue a check for the merger consideration, 
net of any withholding or other taxes, if applicable, and mail the check to the 
record holder.                                                                  

Stock Options and Warrant. The merger agreement provides that at the  
effective time of the merger all options and the warrant to purchase            
CogenAmerica common stock will be canceled and each holder of an option or      
warrant will have the right to receive, upon execution and delivery to the      
Payment Agent of an option or warrant termination agreement, with respect to his
or her options, a cash payment equal to (a) the excess, if any, of $25.00 over  
the exercise price of his or her option or warrant, multiplied by (b) the total 
number of shares of CogenAmerica common stock for which such option or warrant  
are then vested and exercisable (after giving effect to any acceleration of     
vesting as a result of the consummation of the merger) pursuant to the terms of 
such option or warrant. The payment of the consideration for an option, net of  
any withholding or other applicable taxes, or for the warrant upon delivery to  
the Payment Agent of an option or warrant termination agreement, will constitute
full satisfaction of all rights pertaining to the option or for the warrant.    

   Closing of Transfer Books. At the effective time of the merger, the stock
transfer books of CogenAmerica will be closed and no further transfer of shares 
of CogenAmerica common stock will be made on the records of CogenAmerica. On or 
after the effective                                                             

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time, any Certificates presented to the surviving corporation or the Payment    
Agent will be canceled and exchanged for the merger consideration.              

CONDITIONS TO THE MERGER.                                                       

Each party's obligation to complete the merger is conditioned upon the
following: (a) adoption and approval of the merger agreement by the vote of the 
holders of more than 66 2/3% of the outstanding shares of the CogenAmerica      
common stock, (b) approval of the charter amendment by the vote of the holders  
of more than 50% of the outstanding shares of CogenAmerica common stock, (c)    
expiration or termination of the waiting period (and any extension thereof)     
applicable to the merger under the HSR Act, (d) the obtaining of all            
authorizations, consents, orders, declarations or approvals of, or filings with,
or terminations or expirations of waiting periods imposed by, any governmental  
entity, the failure of which would have the effect of making the merger or any  
transaction described in the merger agreement illegal or would have,            
individually or in the aggregate, a material adverse effect on Calpine (assuming
the merger has taken place), and (e) the absence of any statute, rule,          
regulation, legislation, interpretation, judgment, order or injunction or other 
action (i) challenging the acquisition by Calpine or Acquisition Sub of any     
CogenAmerica common stock, (ii) seeking to prohibit or limit the ownership or   
operation by CogenAmerica, Calpine or any of their respective subsidiaries of   
any material portion of the business or assets of CogenAmerica, Calpine or any  
of their respective subsidiaries, or to compel CogenAmerica, Calpine or any of  
their respective subsidiaries to dispose of or hold separate any material       
portion of the business or assets of CogenAmerica, Calpine or any of their      
respective subsidiaries, (iii) seeking to impose limitations on the ability of  
Calpine or Acquisition Sub to acquire or hold, or exercise full rights of       
ownership of, any shares of CogenAmerica common stock, including the right to   
vote the CogenAmerica common stock purchased by it on all matters properly      
presented to the stockholders of CogenAmerica, (iv) seeking to prohibit Calpine 
or any of its subsidiaries from effectively controlling in any material respect 
the business or operations of CogenAmerica and its subsidiaries in connection   
with the merger or the merger agreement, or (v) which otherwise is reasonably   
likely to have a material adverse effect on CogenAmerica.                       

 The obligation of CogenAmerica to complete the merger is subject to the
satisfaction of the following conditions at or prior to the effective time: (a) 
each of Calpine and Acquisition Sub has performed in all material respects each 
of its agreements contained in the merger agreement and the representations and 
warranties of Calpine and Acquisition Sub contained in the merger agreement are 
true and complete except for such exceptions as would not have a material       
adverse effect on Calpine; and (b) no governmental entity has imposed any       
requirement which, individually or in the aggregate, would have a material      
adverse effect on Calpine.                                                      

   The obligations of Calpine and Acquisition Sub to complete the merger are
subject to the satisfaction of the following conditions at or prior to the      
effective time: (a) CogenAmerica shall have complied with covenants regarding   
conduct of CogenAmerica's business in the merger agreement and complies with its
agreements and covenants contained in the merger agreement in all material      
respects and the representations and warranties of CogenAmerica contained in the
merger agreement shall be true and complete except for such exceptions as would 
not have a material adverse effect on CogenAmerica; (b) there shall not be      
instituted or pending any suit, action or proceeding initiated as a result of   
the merger agreement or any transactions contemplated thereby (i) challenging   
the acquisition by Calpine or Acquisition Sub of any CogenAmerica common        

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stock, seeking to restrain or prohibit the making or consummation of the merger 
or any other transaction, (ii) seeking to prohibit or limit the ownership or    
operation by CogenAmerica, Calpine or any of their respective subsidiaries of   
any material portion of the business or assets of CogenAmerica, Calpine or any  
of their respective subsidiaries, or to compel CogenAmerica, Calpine or any of  
their respective subsidiaries to dispose of or hold separate any material       
portion of the business or assets of CogenAmerica, Calpine or any of their      
respective subsidiaries, (iii) seeking to impose limitations on the ability of  
Calpine or Acquisition Sub to acquire or hold, or exercise full rights of       
ownership of, any shares of CogenAmerica common stock, including the right to   
vote CogenAmerica common stock purchased by it on all matters properly presented
to the CogenAmerica stockholders, (iv) seeking to prohibit Calpine or any of its
subsidiaries from effectively controlling in any material respect the business  
or operations of CogenAmerica and its subsidiaries in connection with the merger
or the merger agreement, or (v) which otherwise is reasonably likely to have a  
material adverse effect on CogenAmerica; and (c) since the date of the merger   
agreement, there shall not have occurred any event, change, effect or           
development that, individually or in the aggregate, has had or would be         
reasonably expected to have a material adverse effect on CogenAmerica.          

EVEN IF THE COGENAMERICA STOCKHOLDERS APPROVE AND ADOPT THE MERGER    
AGREEMENT, THERE CAN BE NO ASSURANCE THAT THE MERGER WILL BE COMPLETED.         

REPRESENTATIONS AND WARRANTIES.                                                 

   CogenAmerica made representations and warranties in the merger agreement,
qualified in certain instances by materiality or as disclosed in CogenAmerica's 
disclosure letter (the "CogenAmerica Letter") regarding the following: its      
organization and good standing; authority to enter into the merger agreement and
complete the transactions contemplated by the merger agreement; the capital     
structure of CogenAmerica and its subsidiaries; the non-contravention of the    
merger agreement with CogenAmerica's certificate of incorporation, bylaws, any  
contract or law; requisite governmental and other consents and approvals;       
compliance with the SEC filing requirements; its financial statements; the      
accuracy of information in this proxy statement and compliance with the Exchange
Act; the absence of certain material changes since December 31, 1998; possession
of permits and compliance with governing documents and laws; absence of         
undisclosed material contracts; absence of material events of default or basis  
for material events of default; requisite tax filings and examinations; absence 
of outstanding orders, judgments, injunctions and similar actions and absence of
disputes involving CogenAmerica or its subsidiaries or their businesses;        
agreements relating to certain employment, consulting and benefit matters of    
CogenAmerica; compliance with worker safety, labor and employment and           
environmental laws; absence of state takeover laws applicable to CogenAmerica;  
the required vote of stockholders of CogenAmerica necessary to approve the      
merger agreement; absence of brokers or similar fees other than to DLJ; the     
receipt of the DLJ fairness opinion; the applicability and compliance with      
certain utility regulations; insurance coverage; and related party transactions.

CERTAIN COVENANTS.                                                              

  Until the merger is completed, CogenAmerica has agreed that CogenAmerica
and its subsidiaries will conduct their business in the ordinary course and use 
their best efforts to preserve their current business organizations, keep       
available the services of its current officers and employees and preserve their 
third party relationships.                                                      

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  CogenAmerica has also agreed that, without the consent of Calpine unless
contemplated by the CogenAmerica disclosure, neither CogenAmerica nor its       
subsidiaries will: (a) declare or pay any dividend on or make any other         
distribution in respect of its capital stock, or split, combine or reclassify   
any class of stock or purchase, redeem or acquire any shares of capital stock;  
(b) issue or encumber any shares of its capital stock or other securities other 
than the issuance of shares of CogenAmerica common stock upon the exercise of   
options; (c) amend its governing documents; (d) acquire by merger or            
consolidation or asset purchase or equity purchase any entity or division other 
than transactions in the ordinary course of business consistent with past       
practice and that have a transaction value of less than $250,000 individually or
$1,000,000 in the aggregate and which are not material to CogenAmerica; (e) sell
or otherwise dispose of assets other than in the ordinary course of business    
consistent with past practice and that have a transaction value of less than    
$250,000 individually or $1,000,000 in the aggregate; (f) incur indebtedness for
borrowed money or make loans or investments, except for obligations incurred in 
the ordinary course of business consistent with past practice that are less than
$500,000 in the aggregate and transactions between or among CogenAmerica and its
subsidiaries; (g) alter the corporate structure or ownership of CogenAmerica or 
its subsidiaries; (h) adopt or amend existing benefit plans, severance plans or 
employment or consulting agreements, except for immaterial changes as required  
by applicable law; (i) increase compensation to directors, officers, employees, 
independent contractors or consultants, grant severance or termination pay or   
enhance or accelerate rights under any plan or arrangement for the benefit of   
any director, officer, employee, independent contractor or consultant; (j)      
violate or fail to perform any obligation imposed by material federal, state or 
local law, rule or regulation; (k) change any accounting policies or procedures,
except as required to by generally accepted accounting principles; (l) file tax 
returns inconsistent with past practice or take any position inconsistent with  
prior positions; (m) make tax elections or settle or compromise any material tax
liability; (n) enter into or amend any contract which involves aggregate        
payments in excess of $250,000 for individual contracts or $1,000,000 in the    
aggregate for all contracts or make or agree to make new capital expenditures in
excess of $250,000 individually or $500,000 in the aggregate; or (o) pay or     
discharge any obligations other than the payment or discharge of obligations in 
the ordinary course of business consistent with past practice that are reflected
in or as contemplated by the most recent financial statements, or certain       
payments of indebtedness owed by CogenAmerica or a subsidiary under an existing 
credit facility.                                                                

NO SOLICITATION OF TRANSACTIONS.                                                

The merger agreement provides that CogenAmerica will not, directly or 
indirectly (a) solicit, initiate or encourage the submission of any Takeover    
Proposal (as defined below), (b) enter into any agreement with respect to any   
Takeover Proposal, or (c) participate in any discussions or negotiations        
regarding, or furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that     
constitutes, or may reasonably be expected to lead to, any Takeover Proposal. If
the CogenAmerica Board of Directors reasonably determines the Takeover Proposal 
constitutes a Superior Proposal (as defined below), then, to the extent required
by the fiduciary obligations of the CogenAmerica Board of Directors, as         
determined in good faith by a majority of the disinterested members after       
receiving the advice of independent legal counsel, CogenAmerica may, in response
to an unsolicited request, furnish information with respect to CogenAmerica to, 
and enter into discussions                                                      

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with, any person that has made such a Takeover Proposal pursuant to a customary 
confidentiality agreement.                                                      

     The merger agreement defines a "Takeover Proposal" to mean any proposal for
a merger or other business combination involving CogenAmerica or any of its     
subsidiaries or any proposal or offer to acquire in any manner, directly or     
indirectly, a substantial equity interest in, a substantial portion of the      
voting securities of, or a substantial portion of the assets of CogenAmerica or 
any of its subsidiaries, other than the transactions contemplated by the merger 
agreement. A "Superior Proposal" means a bona fide Takeover Proposal made by a  
third party which a majority of the disinterested members of the CogenAmerica   
Board of Directors determines in its reasonable good faith judgment to be more  
favorable to CogenAmerica's stockholders than the merger, and for which         
financing, to the extent required, is then committed or which, in the reasonable
good faith judgment of a majority of such disinterested members is highly likely
to be financed by the third party. In making these determinations and judgments,
the CogenAmerica Board of Directors must receive a written opinion from an      
independent financial advisor of nationally recognized reputation that the value
of the consideration provided for in the alternative proposal exceeds the value 
of the consideration provided for in the merger and written advice as to the    
likelihood of the third party obtaining any necessary financing.                

 The merger agreement requires CogenAmerica to advise Calpine of (a) any
Takeover Proposal or inquiry with respect to or which could lead to any Takeover
Proposal, (b) the material terms of such Takeover Proposal, and (c) the identity
of the person making any such Takeover Proposal or inquiry. The merger agreement
also requires CogenAmerica to keep Calpine fully informed of the status and     
details of any such Takeover Proposal or inquiry.                               

TERMINATION.                                                                    

   The merger agreement may be terminated at any time prior to the effective
time, whether before or after approval of the matters presented in connection   
with the merger by the stockholders of CogenAmerica:                            

1. by mutual written consent of Calpine and CogenAmerica; or

    2. by either Calpine or CogenAmerica if the other party fails to
   comply in any material respect with any of its covenants or agreements in
    the merger agreement, and the failure is not cured within 30 business days
following receipt of notice; or                                       

          3. by either Calpine or CogenAmerica if there has been a breach by the
other party (in the case of Calpine including a material breach by    
Acquisition Sub) of any representation or warranty that would have a  
material adverse effect on the breaching party or would prevent the   
breaching party from consummating the merger; or                      

   4. by either Calpine or CogenAmerica if the merger has not been
    effected on or prior to the later of (a) February 28, 2000 or, if the sole
 reason that the merger has not been consummated by February 28, 2000 is
   that the special meeting has not been held by such date, or (b) March 31,
     2000, in either case for a reason other than the failure of the terminating
party to comply with its obligations under the merger agreement; or   

5. by either Calpine or CogenAmerica if any court or other  
    governmental entity having jurisdiction has issued an order or taken other
action permanently enjoining or                                       

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     otherwise prohibiting the transactions contemplated by the merger agreement
and such action has become final and nonappealable; or                

6. by either Calpine or CogenAmerica if the stockholders of 
    CogenAmerica do not approve the merger agreement at the special meeting or
any adjournment or postponement thereof; or                           

     7. by CogenAmerica if concurrently with or immediately after such
termination, CogenAmerica enters into a merger, acquisition or other  
agreement to affect a Superior Proposal and prior to such termination 
 CogenAmerica has (a) delivered to Calpine a written notice of intent to
  enter into an agreement to effect a Superior Proposal, (b) four business
   days have elapsed following the notice, (c) CogenAmerica informed Calpine
  of the terms and conditions of the Takeover Proposal and the identity of
     the person making the proposal, (d) the CogenAmerica Board of Directors has
continued reasonably to believe following the notice period that the  
     Takeover Proposal constitutes a Superior Proposal after taking into account
any amendment of the terms of the merger by Calpine or any proposal by
     Calpine to amend the terms of the merger agreement, the merger or any other
    Takeover Proposal made by Calpine, and (e) CogenAmerica has paid Calpine a
termination fee of $7,500,000; or                                     

          8. by Calpine if prior to the effective time the CogenAmerica Board of
  Directors or any committee thereof shall have withdrawn or modified in a
     manner adverse to Calpine or Acquisition Sub its approval or recommendation
     of the merger or shall have recommended or approved a Superior Proposal, or
shall have resolved to do any of the foregoing.                       

TERMINATION FEE.                                                                

  If (a) the merger agreement is terminated pursuant to paragraph 7 of the
preceding section entitled "-- Termination" or (b) if (i) the merger agreement  
is terminated by (A) CogenAmerica or Calpine pursuant to paragraph 6 of the     
preceding section or (B) by Calpine pursuant to paragraphs 2, 3 or 8 of the     
preceding section, (ii) prior to such termination any person makes a Takeover   
Proposal, and (iii) concurrently with or within 12 months after such a          
termination a Third Party Acquisition Event (as defined below) occurs, in each  
case CogenAmerica will be obligated to pay to Calpine a termination fee of      
$7,500,000 in cash (the "Termination Fee").                                     

A "Third Party Acquisition Event" occurs when, pursuant to a legally  
binding definitive agreement or agreement in principal with CogenAmerica, any   
person, entity or group (other than Calpine, Acquisition Sub or any of their    
affiliates), in one or a series of transactions, acquires more than 50% of the  
outstanding CogenAmerica common stock or assets of CogenAmerica through open    
market purchases, merger, consolidation, tender or exchange offer,              
reorganization or other business combination.                                   

INDEMNIFICATION.                                                                

   The merger agreement provides that for six years from the effective time,
Calpine will cause the surviving corporation to indemnify and hold harmless all 
past and present officers and directors of CogenAmerica to the same extent as   
such persons are indemnified at the date of the merger agreement for acts or    
omissions occurring at or prior to the effective time. Calpine has agreed to    
provide, or cause the surviving corporation to provide, for not less than six   
years from the effective time a directors and officers insurance and            

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indemnification policy providing coverage for events occurring prior to the     
effective time with coverage substantially similar to CogenAmerica's existing   
policy or if substantially similar coverage is unavailable, then best available,
provided that Calpine shall not be required to pay premiums aggregating more    
than $360,000 in any calendar year.                                             

AMENDMENT AND WAIVER.                                                           

    The merger agreement may be amended pursuant to action taken or authorized
by the respective Boards of Directors of Calpine and CogenAmerica at any time   
prior to or after approval of the merger agreement by the stockholders of       
CogenAmerica but, after such approval, no amendment will be made without the    
further approval of the stockholders if further approval is required by law. At 
any time prior to the effective time, any of the parties to the merger agreement
may extend, in writing, the time for performance of any obligations or other    
acts of the other party, waive any inaccuracies in the representations and      
warranties contained in the merger agreement or any document delivered pursuant 
to the merger agreement and waive compliance with any of the agreements or      
conditions contained in the merger agreement.                                   

EXPENSES.                                                                       

   Whether or not the merger is consummated, all costs and expenses incurred
in connection with the merger agreement and the transactions contemplated       
thereby will be paid by the party incurring such expense.                       

EFFECTIVE TIME                                                                  

     The merger will become effective at the effective time. It is expected that
the effective time will be the date of closing of the merger, which is expected 
to be December 16, 1999, or as soon thereafter as is practicable subject to     
satisfaction or waiver of the conditions to closing.                            

CONVERSION OF COMMON STOCK                                                      

  As of the effective time, each share of CogenAmerica common stock issued
and outstanding immediately prior to the effective time of the merger (other    
than shares owned by CogenAmerica, by Acquisition Sub or by stockholders who    
properly exercise their appraisal rights under the DGCL) will be converted into 
the right to receive the merger consideration when the Certificate formerly     
representing such share of CogenAmerica common stock is surrendered and a duly  
executed letter of transmittal is delivered to the Payment Agent. The Payment   
Agent will mail to each record holder of CogenAmerica common stock, as soon as  
practicable after the effective time of the merger, a letter of transmittal     
which will contain instructions for surrendering the Certificates for           
CogenAmerica common stock in exchange for the merger consideration. When so     
converted, all such shares of CogenAmerica common stock will no longer be       
outstanding and will automatically be canceled and retired and each holder of a 
Certificate formerly representing any such shares will have only the right to   
receive the merger consideration in cash (without interest) upon the surrender  
of the Certificate. Holders of options will receive payment in accordance with  
the procedures described below under "Payment for Stock Options."               

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     As soon as practicable after the effective time of the merger, Calpine will
deposit with the Payment Agent, in trust for the holders of the CogenAmerica    
common stock converted in the merger and holders of options, an amount of cash  
equal to or exceeding the aggregate merger consideration and the consideration  
for the options, net of any withholding or other taxes, if applicable.          

    COGENAMERICA'S STOCKHOLDERS SHOULD NOT FORWARD THEIR STOCK CERTIFICATES TO
THE PAYMENT AGENT WITHOUT A LETTER OF TRANSMITTAL. STOCK CERTIFICATES SHOULD NOT
BE RETURNED WITH THE ENCLOSED PROXY CARD.                                       

  The payment of the merger consideration, net of any withholding or other
taxes, if applicable, upon surrender of any Certificate will be deemed to       
constitute full satisfaction of all rights pertaining to the shares of          
CogenAmerica common stock represented by the Certificate. Until surrendered as  
contemplated by the merger agreement, each Certificate for CogenAmerica common  
stock will be deemed at any time after the effective time to represent only the 
right to receive the merger consideration upon surrender; no interest will be   
paid or will accrue on any merger consideration payable to stockholders. At the 
effective time of the merger, the stock transfer books of CogenAmerica will be  
closed. Neither Calpine nor the surviving corporation will be liable to any     
former stockholder or holder of an option for any cash held in the payment fund 
which is delivered to a public official pursuant to any applicable abandoned    
property, escheat or similar law.                                               

PAYMENT FOR STOCK OPTIONS AND WARRANT                                           

    Each option and the warrant to purchase CogenAmerica common stock which is
outstanding immediately prior to the effective time of the merger will be       
canceled, and the holder will have the right to receive, upon execution and     
delivery to the Payment Agent of an option or warrant termination agreement, a  
cash payment equal to the (a) excess of $25.00 over the exercise price of the   
option or warrant, multiplied by (b) the total number of shares of CogenAmerica 
common stock for which such option or warrant are then vested and exercisable   
(after giving effect to any acceleration of vesting as a result of the          
consummation of the merger) pursuant to the terms of such options or warrant.   
The payment of the consideration for an option, net of any withholding or other 
applicable taxes, or for the warrant upon delivery to the Payment Agent of an   
option or warrant termination agreement signed by the holder of the option or   
warrant, will constitute full satisfaction of all rights pertaining to the      
option or warrant.                                                              

CONDUCT OF BUSINESS PENDING THE MERGER                                          

   Pursuant to the merger agreement, CogenAmerica has agreed to carry on its
business prior to the effective time of the merger in all material respects in  
the ordinary course of its business as conducted on the date of the merger      
agreement, subject to certain covenants by CogenAmerica in the merger agreement.

REGULATORY FILINGS AND APPROVALS                                                

    CogenAmerica believes that the following filings or approvals are required
with respect to the merger: (a) filings with and approvals of the FERC, (b)     
filings by CogenAmerica and Calpine with the Federal Trade Commission and the   
Department of Justice pursuant to the requirements of the HSR Act, (c) filings  
by CogenAmerica, Calpine, Acquisition                                           

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Sub and NRG with the SEC pursuant to the Exchange Act, (d) filings by           
CogenAmerica under the New Jersey Industrial Site Recovery Act, (e) filing the  
certificate of amendment to effect the charter amendment with the Delaware      
Secretary of State, and (e) filing of the certificate of merger to effect the   
merger with the Delaware Secretary of State.                                    

CONDITIONS TO THE MERGER                                                        

    The obligations of Calpine, Acquisition Sub and CogenAmerica to effect the
merger are subject to the fulfillment of certain conditions described more fully
under "Summary of Material Terms of the Merger Agreement -- Conditions to the   
Merger" (page 38).                                                              

FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTION                              

The following discussion summarizes the material federal income tax   
considerations relevant to the merger that are generally applicable to holders  
of CogenAmerica common stock and those options to purchase CogenAmerica common  
stock that were granted by CogenAmerica or any of its subsidiaries as           
compensation for services. This discussion is based on currently existing       
provisions of the Internal Revenue Code, existing and proposed Treasury         
Regulations and current administrative rulings and court decisions, all of which
are subject to change. Any change, which may or may not be retroactive, could   
alter the tax consequences to the holders of the CogenAmerica common stock or   
options as described here. Special tax consequences not described below may be  
applicable to particular classes of taxpayers, including financial institutions,
broker-dealers, persons who are not citizens or residents of the United States  
or who are foreign corporations, foreign partnerships or foreign estates or     
trusts and stockholders who acquired CogenAmerica common stock through the      
exercise of options or otherwise as compensation prior to the effective time of 
the merger.                                                                     

  The conversion of the CogenAmerica common stock at the effective time of
the merger into the right to receive the merger consideration of $25.00 per     
share in cash will be a taxable transaction for federal income tax purposes and 
may also be a taxable transaction under applicable state and other tax laws. In 
general, a stockholder will recognize gain or loss equal to the difference      
between the tax basis of the CogenAmerica common stock and the amount of merger 
consideration received in exchange for the CogenAmerica common stock. The gain  
or loss will be treated as capital gain or loss if the CogenAmerica common stock
is a capital asset in the hands of the stockholder.                             

The receipt of the consideration for options (that were granted by    
CogenAmerica or any of its subsidiaries as compensation for services) upon      
delivery to the Payment Agent of an option termination agreement will be taxable
as ordinary income for federal and state income and other tax purposes. The     
consideration for such options will be paid to the holders of such options net  
of withholding and other applicable taxes.                                      

The federal income tax consequences set forth above are for general   
information only. Each stockholder and each holder of options is urged to       
consult his or her own tax advisor to determine the particular tax consequences 
to him or her of the merger, including the applicability and effect of state and
other tax laws.                                                                 

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FINANCING OF THE MERGER; SOURCE OF FUNDS                                        

Calpine has represented in the merger agreement that it has sufficient
capital resources necessary to perform its obligations under the merger         
agreement. Calpine intends to finance the transaction with working capital funds
and borrowings under existing credit facilities.                                

ANTICIPATED ACCOUNTING TREATMENT                                                

CogenAmerica believes that the merger will be accounted for by Calpine
using the purchase method of accounting in accordance with generally accepted   
accounting principles.                                                          

APPRAISAL RIGHTS                                                                

If the merger is consummated, holders of shares of CogenAmerica common
stock are entitled to appraisal rights under Section 262 of the DGCL, provided  
that they comply with the conditions established by Section 262.                

Section 262 is reprinted in its entirety as Appendix D to this proxy  
statement. The following discussion is not a complete statement of the law      
relating to appraisal rights and is qualified in its entirety by reference to   
Appendix D. This discussion and Appendix D should be reviewed carefully by any  
stockholder who wishes to exercise statutory appraisal rights or who wishes to  
preserve the right to do so, as failure to comply with the procedures set forth 
herein or therein will result in the loss of appraisal rights.                  

     A record holder of shares of CogenAmerica common stock who makes the demand
described below with respect to such shares, who continuously is the record     
holder of such shares through the effective time of the merger, who otherwise   
complies with the statutory requirements of Section 262 and who neither votes in
favor of the merger nor consents thereto in writing will be entitled, in lieu of
the $25.00 cash per share of CogenAmerica common stock to be paid in the merger,
to an appraisal by the Delaware Court of Chancery (the "Delaware Court") of the 
fair value of his or her shares of CogenAmerica common stock. All references in 
this summary of appraisal rights to a "stockholder" or "holders of shares of    
common stock" are to the record holder or holders of shares of CogenAmerica     
common stock. Except as set forth herein, stockholders of CogenAmerica will not 
be entitled to appraisal rights in connection with the merger.                  

   VOTING AGAINST, ABSTAINING FROM VOTING OR FAILING TO VOTE ON APPROVAL AND
ADOPTION OF THE MERGER WILL NOT CONSTITUTE A DEMAND FOR APPRAISAL WITHIN THE    
MEANING OF SECTION 262 OF THE DGCL.                                             

Under Section 262, where a merger is to be submitted for approval at a
meeting of stockholders, such as the special meeting, not less than 20 days     
prior to the meeting a constituent corporation must notify each of the holders  
of its stock for whom appraisal rights are available that such appraisal rights 
are available and include in each such notice a copy of Section 262. This proxy 
statement constitutes such notice to the record holders of CogenAmerica common  
stock.                                                                          

     Holders of shares of CogenAmerica common stock who desire to exercise their
appraisal rights must not vote in favor of the merger and must deliver a        
separate written demand for appraisal to CogenAmerica prior to the vote by the  
stockholders of                                                                 

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CogenAmerica on the merger. A demand for appraisal must be executed by or on    
behalf of the stockholder of record and must reasonably inform CogenAmerica of  
the identity of the stockholder of record and that such stockholder intends     
thereby to demand appraisal of the CogenAmerica common stock. A proxy or vote   
against the merger will not by itself constitute such a demand. Within ten days 
after the effective time of the merger, CogenAmerica must provide notice of the 
effective time of the merger to all stockholders who have complied with Section 
262.                                                                            

A stockholder who elects to exercise appraisal rights should mail or  
deliver his or her written demand to: Cogeneration Corporation of America,      
Attention: Thomas L. Osteraas, General Counsel and Secretary, One Carlson       
Parkway, Suite 240, Minneapolis, Minnesota 55447-4454.                          

A person having a beneficial interest in shares of CogenAmerica common
stock that are held of record in the name of another person, such as a broker,  
fiduciary, depositary or other nominee, must act promptly to cause the record   
holder to follow the steps summarized herein properly and in a timely manner to 
perfect appraisal rights. If the shares of CogenAmerica common stock are owned  
of record by a person other than the beneficial owner, including a broker,      
fiduciary (such as a trustee, guardian or custodian), depositary or other       
nominee, such demand must be executed by or for the record owner. If the shares 
of CogenAmerica common stock are owned of record by more than one person, as in 
a joint tenancy or tenancy in common, such demand must be executed by or for all
joint owners. An authorized agent, including an agent for two or more joint     
owners, may execute the demand for appraisal for a stockholder of record;       
however, the agent must identify the record owner and expressly disclose the    
fact that, in exercising the demand, such person is acting as agent for the     
record owner. If a stockholder holds shares of CogenAmerica common stock through
a broker who in turn holds the shares through a central securities depository   
nominee such as Cede & Co., a demand for appraisal of such shares must be made  
by or on behalf of the depository nominee and must identify the depository      
nominee as record holder.                                                       

   A record holder, such as a broker, fiduciary, depositary or other nominee
who holds shares of CogenAmerica common stock as a nominee for others, may      
exercise appraisal rights with respect to the shares held for all or less than  
all beneficial owners of shares as to which such person is the record owner. In 
such case, the written demand must set forth the number of shares covered by    
such demand. Where the number of shares is not expressly stated, the demand will
be presumed to cover all shares of CogenAmerica common stock outstanding in the 
name of such record owner.                                                      

     Within 120 days after the effective time of the merger, either CogenAmerica
or any stockholder who has complied with the required conditions of Section 262 
may file a petition in the Delaware Court, with a copy served on CogenAmerica in
the case of a petition filed by a stockholder, demanding a determination of the 
fair value of the shares of all dissenting stockholders. There is no present    
intent on the part of CogenAmerica to file an appraisal petition and            
stockholders seeking to exercise appraisal rights should not assume that        
CogenAmerica will file such a petition or that CogenAmerica will initiate any   
negotiations with respect to the fair value of such shares. Accordingly, holders
of CogenAmerica common stock who desire to have their shares appraised should   
initiate any petitions necessary for the perfection of their appraisal rights   
within the time periods and in the manner prescribed in Section 262. Within 120 
days after the effective time of the merger, any stockholder who has theretofore
complied with the applicable provisions of Section 262 will be entitled, upon   
written request, to receive from CogenAmerica a                                 

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statement setting forth the aggregate number of shares of CogenAmerica common   
stock not voting in favor of the merger and with respect to which demands for   
appraisal were received by CogenAmerica and the number of holders of such       
shares. Such statement must be mailed (i) within 10 days after the written      
request therefor has been received by CogenAmerica or (ii) within 10 days after 
the expiration of the period for the delivery of demands as described above,    
whichever is later.                                                             

If a petition for an appraisal is filed timely, at the hearing on such
petition, the Delaware Court will determine which stockholders are entitled to  
appraisal rights. The Delaware Court may require the stockholders who have      
demanded an appraisal for their shares and who hold stock represented by        
certificates to submit their certificates of stock to the Register in Chancery  
for notation thereon of the pendency of the appraisal proceedings; and if any   
stockholder fails to comply with such direction, the Delaware Court may dismiss 
the proceedings as to such stockholder. Where proceedings are not dismissed, the
Delaware Court will appraise the shares of CogenAmerica common stock owned by   
such stockholders, determining the fair value of such shares exclusive of any   
element of value arising from the accomplishment or expectation of the merger,  
together with a fair rate of interest, if any, to be paid upon the amount       
determined to be the fair value.                                                

     Although CogenAmerica believes that the merger consideration for each share
of CogenAmerica common stock held by a stockholder is fair, no representation is
made as to the outcome of the appraisal of fair value as determined by the      
Delaware Court and stockholders should recognize that such an appraisal could   
result in a determination of a value higher or lower than, or the same as, the  
merger consideration. Moreover, CogenAmerica does not anticipate offering more  
than the merger consideration to any stockholder exercising appraisal rights and
reserves the right to assert, in any appraisal proceeding, that, for purposes of
Section 262, the "fair value" of a share of CogenAmerica common stock is less   
than the merger consideration. In determining "fair value," the Delaware Court  
is required to take into account all relevant factors. In Weinberger v. UOP,    
Inc., the Delaware Supreme Court discussed the factors that could be considered 
in determining fair value in an appraisal proceeding, stating that "proof of    
value by any techniques or methods which are generally considered acceptable in 
the financial community and otherwise admissible in court" should be considered 
and that "fair price obviously requires consideration of all relevant factors   
involving the value of a company." The Delaware Supreme Court has stated that in
making this determination of fair value the court must consider market value,   
asset value, dividends, earnings prospects, the nature of the enterprise and any
other facts which could be ascertained as of the date of the merger which throw 
any light on future prospects of the merged corporation. Section 262 provides   
that fair value is to be "exclusive of any element of value arising from the    
accomplishment or expectation of the merger." In Cede & Co. v. Technicolor,     
Inc., the Delaware Supreme Court stated that such exclusion is a "narrow        
exclusion that does not encompass known elements of value," but which rather    
applies only to the speculative elements of value arising from such             
accomplishment or expectation. In Weinberger, the Delaware Supreme Court        
construed Section 262 to mean that "elements of future value, including the     
nature of the enterprise, which are known or susceptible of proof as of the date
of the merger and not the product of speculation, may be considered."           

     Delaware courts have decided that the statutory appraisal remedy, depending
on factual circumstances, may or may not be a dissenter's exclusive remedy.     
Several decisions by the Delaware courts have held that a controlling           
stockholder has a fiduciary duty to the other stockholders which requires that  
the merger be "entirely fair" to such other                                     

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stockholders. In determining whether a merger is fair to minority stockholders, 
the Delaware courts have considered among other things, the type of and amount  
of consideration to be received by stockholders and whether there was fair      
dealing among the parties. The Delaware Supreme Court stated in Weinberger, that
although the remedy ordinarily available in a merger that is found not to be    
"fair" to minority stockholders is the right to appraisal described above, such 
appraisal remedy may not be adequate "in certain cases, particularly where      
fraud, misrepresentations, self-dealing, deliberate waste of corporate assets,  
or gross and palpable overreaching are involved,"and that in such cases the     
Delaware Court would be free to fashion any form of appropriate relief.         

   Stockholders considering seeking appraisal should recognize that the fair
value of their shares determined under Section 262 could be more than, the same 
as or less than the consideration they are entitled to receive pursuant to the  
merger agreement if they do not seek appraisal of their shares. The Delaware    
Court will determine the amount of interest, if any, to be paid on amounts to be
received by persons whose shares have been appraised. The cost of the appraisal 
proceeding may be determined by the Delaware Court and taxed against the parties
as the Delaware Court deems equitable in the circumstances. However, costs do   
not include attorneys' and expert witness fees. Each dissenting stockholder is  
responsible for his or her attorneys' and expert witness expenses, although,    
upon application of a dissenting stockholder of CogenAmerica, the Delaware Court
may order that all or a portion of the expenses incurred by any dissenting      
stockholder in connection with the appraisal proceeding, including without      
limitation, reasonable attorneys' fees and the fees and expenses of experts, be 
charged pro rata against the value of all shares of stock entitled to appraisal.

    Any stockholder who has duly demanded appraisal in compliance with Section
262 will not, after the effective time of the merger, be entitled to vote for   
any purpose any shares subject to such demand or to receive payment of dividends
or other distributions on such shares, except for dividends or distributions    
payable to stockholders of record at a date prior to the effective time of the  
merger.                                                                         

At any time within 60 days after the effective time of the merger, any
stockholder will have the right to withdraw such demand for appraisal and to    
accept the terms offered in the merger; after this period, the stockholder may  
withdraw such demand for appraisal only with the consent of CogenAmerica. If no 
petition for appraisal is filed with the Delaware Court within 120 days after   
the effective time of the merger, stockholders' rights to appraisal shall cease,
and all holders of shares of CogenAmerica common stock will be entitled to      
receive the consideration offered pursuant to the merger agreement. Inasmuch as 
CogenAmerica has no obligation to file a petition for an appraisal, and         
CogenAmerica has no present intention to do so, any stockholder who desires such
a petition to be filed is advised to file it on a timely basis. Any stockholder 
may withdraw such stockholders' demand for appraisal by delivering to           
CogenAmerica a written withdrawal of his or her demand for appraisal and        
acceptance of the merger consideration, except (i) that any such attempt to     
withdraw made more than 60 days after the effective time of the merger will     
require written approval of CogenAmerica and (ii) that no appraisal proceeding  
in the Delaware Court shall be dismissed as to any stockholder without the      
approval of the Delaware Court, and such approval may be conditioned upon such  
terms as the Delaware Court deems just.                                         

   A stockholder will fail to perfect his or her right of appraisal if he or
she (a) does not deliver a written demand for appraisal to CogenAmerica prior to
the vote for approval and adoption of the merger agreement, (b) votes his or her
shares of CogenAmerica common                                                   

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stock in favor of approval and adoption of the merger agreement, (c) does not   
file a petition for appraisal within 120 days after the effective time of the   
merger, or (d) delivers to the company both a written withdrawal of his or her  
demand for appraisal and an acceptance of the terms of the merger agreement,    
except that any such attempt to withdraw such demand not made within 60 days    
after the effective time of the merger requires the written approval of         
CogenAmerica. If any stockholder who properly demands appraisal of such         
stockholder's shares of CogenAmerica common stock under Section 262 fails to    
perfect, or effectively withdraws or loses, such stockholder's right to         
appraisal, the shares of CogenAmerica common stock of such stockholder will be  
converted into the right to receive $25.00 per share in cash in accordance with 
the merger agreement.                                                           

   Cash received pursuant to the exercise of appraisal rights may be subject
to federal or state income tax. See "Federal Income Tax Consequences of the     
Transaction" (page 45).                                                         

    ANY HOLDER OF COGENAMERICA COMMON STOCK WHO FAILS TO COMPLY FULLY WITH THE
STATUTORY PROCEDURE SUMMARIZED ABOVE WILL FORFEIT HIS OR HER APPRAISAL RIGHTS   
UNDER THE DGCL AND WILL RECEIVE THE MERGER CONSIDERATION FOR HIS OR HER SHARES. 
SEE APPENDIX D.                                                                 

     IN VIEW OF THE COMPLEXITY OF THESE PROVISIONS IN THE DGCL, STOCKHOLDERS WHO
ARE CONSIDERING DISSENTING FROM THE APPROVAL AND ADOPTION OF THE MERGER         
AGREEMENT AND EXERCISING THEIR RIGHTS UNDER SECTION 262 SHOULD CONSULT THEIR    
LEGAL ADVISORS.                                                                 

SUMMARY OF MATERIAL FEATURES OF THE CALPINE/NRG AGREEMENT 

Concurrently with the execution of the merger agreement, Calpine,     
Acquisition Sub and NRG entered into the Calpine/NRG Agreement on August 26,    
1999. The Calpine/ NRG Agreement provides that, subject to the terms and        
conditions thereof, immediately prior to the consummation of the merger:        

     - NRG will contribute to Acquisition Sub a number of shares of CogenAmerica
       common stock equal in value to (i) at least 20% of the total equity value
   of CogenAmerica less (ii) the value of the CogenAmerica stock options
     held by NRG employees which have been or will be cancelled prior to the
       merger, in exchange for 20% of the ownership interest in Acquisition Sub;
and                                                               

     - Calpine will contribute to Acquisition Sub cash equal to 80% of the total
equity value of CogenAmerica in exchange for 80% of the ownership 
    interest in Acquisition Sub. The total equity value of CogenAmerica is
  defined as the sum of (i) the total number of issued and outstanding
    shares of CogenAmerica common stock immediately prior to completion of
  the merger multiplied by $25.00 and (ii) the aggregate amount of the
     excess of $25.00 per share over the exercise price per share of each of
the outstanding CogenAmerica options.                             

Pursuant to the Calpine/NRG Agreement, Calpine has also agreed to     
contribute cash, in the form of a loan, sufficient to satisfy certain           
obligations of CogenAmerica. Upon consummation of the merger, NRG shall own 20% 
and Calpine shall own 80% of the outstanding shares of CogenAmerica common      
stock. The obligations of Calpine and NRG to make their respective capital      
contributions described above is conditioned upon the                           

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satisfaction or waiver of all of the closing conditions set forth in the merger 
agreement, including the approval and adoption of the merger agreement by       
CogenAmerica stockholders.                                                      

The Calpine/NRG Agreement provides that the Board of Directors of the 
surviving corporation (i.e., CogenAmerica following the merger) will consist of 
no more than seven directors with one director being appointed by NRG. In       
addition, the consent of NRG is required for the surviving corporation or its   
subsidiaries to take certain actions including, without limitation, actions     
relating to:                                                                    

- the issuance of securities;                                         

- the sale or disposition of subsidiaries or assets;                  

- amendments to the certificate of incorporation or by-laws;          

- mergers or consolidations with third parties; and                   

- certain agreements with affiliates.                                 

     The Calpine/NRG Agreement prohibits Calpine and NRG from transferring their
respective shares of CogenAmerica common stock of the surviving corporation for 
a period of three years after completion of the merger without the prior written
consent of the other stockholder, which consent cannot be unreasonably withheld 
or delayed.                                                                     

Pursuant to the Calpine/NRG Agreement, NRG has granted Calpine an     
irrevocable proxy with respect to all of the shares of CogenAmerica common stock
held by it (constituting 45.3% of the outstanding shares) to vote such shares in
favor of approval of the merger agreement and charter amendment at a duly       
convened meeting of CogenAmerica's stockholders for such purpose. NRG has also  
agreed that prior to the consummation of the merger, it shall not (i) solicit   
third parties with respect to sale of shares of CogenAmerica common stock owned 
by NRG and (ii) transfer the shares of CogenAmerica common stock owned by NRG   
except as contemplated by the Calpine/ NRG Agreement.                           

   NRG and Calpine have agreed that prior to the consummation of the merger,
each party shall use reasonable efforts to take all actions and to do all things
necessary, proper or advisable in order to permit the consummation of the       
merger. Calpine has agreed not to cause the merger agreement to be amended or   
waive any of its rights thereunder in any way that would be materially adverse  
to NRG without NRG's prior written consent.                                     

     In the Calpine/NRG Agreement, NRG has granted Calpine with a right of first
refusal to acquire the shares of surviving corporation stock held by NRG.       
Further, the Calpine/NRG Agreement provides that (i) Calpine can require that   
NRG sell its shares in the event Calpine sells all or substantially all of its  
shares in the surviving corporation (i.e., drag-along rights), and (ii) NRG can 
require that its shares of surviving corporation stock be included in a         
transaction in which Calpine sells any of its shares in the surviving           
corporation to a third party (i.e., tag-along rights). The Calpine/NRG Agreement
also provides that Calpine shall have the right to acquire NRG's 20% interest in
CogenAmerica during the 365-day period commencing on the third anniversary of   
the closing of the merger for the fair market value of the interest as          
determined by an independent investment bank. Pursuant to the Calpine/NRG       
Agreement, the surviving corporation is required to pay Calpine certain         
management fees for management services to be provided by Calpine after         
consummation of the merger through the fourth anniversary thereof.              

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PROPOSAL 2: THE CHARTER AMENDMENT 

SUMMARY OF THE CHARTER AMENDMENT

Article VII of CogenAmerica's Amended and Restated Certificate of     
Incorporation places certain restrictions on the transfer of shares of          
CogenAmerica common stock by any person that owns more than 5% of the           
outstanding shares of CogenAmerica common stock until April 30, 2002. The       
purpose of Article VII is to assure that the net operating loss carryforwards   
("NOLs") of CogenAmerica will not be adversely affected by the transfer of      
shares by such a holder. Article VII would require NRG to provide certain legal 
opinions or that the CogenAmerica Board of Directors make certain determinations
as to the continued availability of the NOLs. Article VII provides an exception 
for these requirements in the event the transfer is pursuant to a tender offer  
for at least 66 2/3% of the outstanding shares of CogenAmerica common stock that
is followed by a merger in which the remaining stockholders receive the same    
consideration as the stockholders that tendered their shares in the tender      
offer. Since the merger does not technically fit within the express language of 
Article VII and it may be difficult to comply with the requirements of Article  
VII in connection with the transfer of shares by NRG to Acquisition Sub         
immediately prior to completion of the merger, the CogenAmerica Board of        
Directors has approved and recommends that stockholders approve an amendment to 
Article VII that will permit NRG to transfer shares of CogenAmerica common stock
to Acquisition Sub immediately prior to completion of the merger in order for   
NRG to retain a 20% equity interest in CogenAmerica after the merger. A copy of 
the charter amendment is attached as Appendix B to this proxy statement.        

  THE COGENAMERICA BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE CHARTER
AMENDMENT, AND THE COGENAMERICA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT  
THE STOCKHOLDERS VOTE FOR APPROVAL OF THE CHARTER AMENDMENT.                    

MANAGEMENT OF COGENAMERICA

     Information concerning the management of CogenAmerica, the names, principal
occupations and employment history of the directors and executive officers of   
CogenAmerica, is provided in CogenAmerica's Annual Report on Form 10-K for the  
fiscal year ended December 31, 1998 that is incorporated by reference in this   
proxy statement (SEC File No. 1-9208). All of the directors and executive       
officers of CogenAmerica are citizens of the United States. The business        
addresses of each director and executive officer of CogenAmerica is listed in   
footnote 1 to the table under "Interests in Securities of CogenAmerica."        

INTEREST IN SECURITIES OF COGENAMERICA

The following table sets forth certain information with respect to the
beneficial ownership of the CogenAmerica common stock as of November 12, 1999 by
(a) all persons known to CogenAmerica to own beneficially more than 5% of the   
CogenAmerica common stock, (b) each executive officer and each director of      
CogenAmerica, (c) all executive officers and directors of CogenAmerica as a     
group, (d) the Employee Savings Plan (401(k) Plan) of CogenAmerica, (e) NRG and 
Calpine, and (f) four officers or former officers of NRG who are directors of   
CogenAmerica. Except as set forth below, no                                     

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other executive officer or director of Calpine, Acquisition Sub or NRG or its   
ultimate parent, NSP, beneficially owns CogenAmerica common stock. As of        
November 12, 1999, there were 6,857,269 outstanding shares of CogenAmerica      
common stock. Information presented with respect to options for purposes of this
proxy statement assumes that, as provided in the merger agreement on the date of
completion of the merger all options that are then exercisable, including the   
acceleration of vesting as a result of the merger, will be converted into the   
right to receive a cash amount equal to the excess, if any, of $25.00 over the  
exercise price of the options multiplied by the number of shares of CogenAmerica
common stock so exercisable under the options. Value of stock options is the    
aggregate cash amount payable to each owner of options upon completion of the   
merger.                                                                         

                                                        [Enlarge/Download Table]

                                                      SHARES BENEFICIALLY OWNED(1)       
                                               ------------------------------------------
                                                 PERCENTAGE OF                           
                                                  OUTSTANDING                            
                                   NUMBER OF     SHARES AS OF      NUMBER OF    VALUE OF 
         NAME AND ADDRESS            SHARES    NOVEMBER 12, 1999    OPTIONS     OPTIONS  
         ----------------          ----------  -----------------   ---------   ----------
                                                                                         
NRG Energy, Inc.(2)...............  3,106,612        45.3%               --            --
1221 Nicollet Mall, Suite 700                                                            
Minneapolis, MN 55403-2445                                                               
Wexford Capital Partners II,                                                             
  L.P.(3).........................    443,976         6.5%               --            --
411 West Putnam Avenue                                                                   
Greenwich, CT 06380                                                                      
Calpine Corporation(2)............  3,106,612        45.3%                               
50 West San Fernando Street                                                              
San Jose, CA 95113                                                                       
David H. Peterson(4)(14)..........     31,000           *            30,000    $  586,875
Julie A. Jorgensen(5).............    231,500         3.3%          230,000     3,163,750
Mark Liddell(6)...................     10,000           *            10,000       126,250
Lawrence I. Littman(7)............     30,070           *            30,000       586,875
Craig A. Mataczynski(8)(14).......     30,500           *            30,000       586,875
Michael O'Sullivan................         --          --                --              
Charles J. Thayer(9)..............     50,000           *            10,000       195,625
Ronald J. Will(10)(14)............     32,500           *            30,000       586,875
Timothy P. Hunstad(11)............    112,500         1.6%          112,000     1,922,938
Thomas L. Osteraas(12)............     45,000           *            45,000       604,687
Richard C. Stone(13)..............    120,000         1.7%          120,000     1,121,875
Directors and Executive Officers                                                         
  of CogenAmerica as a group......    683,070         9.1%                               

---------------                                                                 
 *  Represents less than 1.0% of the outstanding shares of CogenAmerica common
stock.                                                                

(1) Under the rules of the SEC, a person is deemed to be a beneficial owner of
  a security if he or she has or shares the power to vote or to direct the
voting of such security, or the power to dispose or to direct the     
  disposition of such security. A person is also deemed to be a beneficial
owner of any securities that such person has the right to acquire     
beneficial ownership of within 60 days as well as any securities      

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 owned by such person's spouse, children or relatives living in the same
household. Accordingly, more than one person may be deemed to be a    
   beneficial owner of the same securities. The address of Messrs. Peterson,
Mataczynski, O'Sullivan and Will is 1221 Nicollet Mall, Suite 700,    
     Minneapolis, Minnesota 55403-2445. The address of Ms. Jorgensen and Messrs.
     Hunstad, Osteraas and Stone is One Carlson Parkway, Suite 240, Minneapolis,
Minnesota 55447-4454. The address of Mr. Liddell is 6307 Waterford    
 Boulevard, Suite 100, Oklahoma City, Oklahoma 73118. The address of Mr.
     Littman is 1660 S A1, Apt. 212, Jupiter, Florida 33477-8449. The address of
     Mr. Thayer is 420 Isle of Capri Drive, Fort Lauderdale, Florida 33301-2438.

(2) Calpine may be deemed to be the beneficial holder of securities owned by  
     NRG as a result of entering into the Calpine/NRG Agreement. Under the terms
    of the Calpine/NRG Agreement, NRG has granted Calpine an irrevocable proxy
    with respect to all of the shares of CogenAmerica common stock held by NRG
to vote those shares in favor of approval and adoption of the merger  
agreement and the charter amendment at a duly convened meeting of     
CogenAmerica's stockholders.                                          

 (3) Includes 348,672 shares owned by Wexford Capital Partners II, LP and 95,304
     shares owned by Wexford Overseas Partners Fund I, LP. Through an investment
    management agreement, Wexford Management LLC, which manages the funds, has
  sole voting and investment power of the funds. This information is as of
   the date set forth in and based on the Schedule 13D filed May 8, 1997 and
other information furnished to CogenAmerica by Wexford Management LLC.

(4) Includes 30,000 shares issuable upon exercise of stock option at an       
exercise price of $5.4375 per share.                                  

(5) Represents 300 shares owned jointly with spouse and 1,200 beneficially    
     owned by Ms. Jorgensen and includes 30,000 shares issuable upon exercise of
  stock option at an exercise price of $9.125 per share and 200,000 shares
     issuable upon exercise of stock option at an exercise price of $11.5625 per
     share, including 100,000 shares which will become vested and exercisable as
a result of the completion of the merger.                             

(6) Includes 10,000 shares issuable upon exercise of stock option at an       
exercise price of $12.375 per share which will become vested and      
exercisable as a result of the completion of the merger.              

(7) Includes 30,000 shares issuable upon exercise of stock option at an       
exercise price of $5.4375 per share.                                  

(8) Represents 500 shares beneficially owned by Mr. Mataczynski and includes  
   30,000 shares issuable upon exercise of stock option at an exercise price
of $5.4375 per share.                                                 

(9) Represents 50,000 shares beneficially owned by Mr. Thayer and includes    
   10,000 shares issuable upon exercise of stock option at an exercise price
of $5.4375 per share.                                                 

(10) Represents 2,500 shares held jointly with spouse and includes 30,000 shares
    issuable upon exercise of stock option at an exercise price of $5.4375 per
share.                                                                

(11) Represents 500 shares owned by Mr. Hunstad and includes 75,000 shares      
    issuable upon exercise of stock option at an exercise price of $5.4375 per
    share, 17,000 shares issuable upon exercise of stock option at an exercise
     price of $14.00 per share, including 11,333 shares which will become vested
    and exercisable as a result of the merger, and 20,000 shares issuable upon
exercise of stock option at an exercise price                         

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     of $11.5625 per share, all of which will become vested and exercisable as a
result of the completion of the merger.                               

(12) Includes 45,000 shares issuable upon exercise of stock options at an       
     exercise price of $11.5625, all of which will become vested and exercisable
as a result of the completion of the merger.                          

(13) Includes 100,000 shares issuable upon exercise of stock option at an       
   exercise price of $16.46875 per share, including 86,667 shares which will
    become vested and exercisable as a result of the completion of the merger,
 and 20,000 shares issuable upon exercise of stock option at an exercise
price of $11.5625 per share, all of which will become vested and      
exercisable as a result of the completion of the merger.              

(14) Current NRG corporate policy prohibits NRG employees from receiving the    
     economic benefit of options granted to them in their capacity as a director
of CogenAmerica. The NRG employees who currently serve as directors of
     CogenAmerica and were previously granted stock options in their capacity as
   directors of CogenAmerica, have agreed to the cancellation of their stock
options. The NRG employees who serve as directors of CogenAmerica will
receive no cash payment for these options.                            

CERTAIN TRANSACTIONS IN COMMON STOCK AND STOCK OPTIONS

    No transactions in CogenAmerica common stock or options have been effected
during the 60 days preceding the date of this proxy statement by CogenAmerica or
by the persons named under the caption "Interest in Securities of CogenAmerica" 
except as provided in the Calpine/NRG Agreement described under the caption     
"Summary of Calpine/NRG Agreement."                                             

EXPENSES OF THE TRANSACTION 

The aggregate fees and expenses paid and estimated to be paid by      
CogenAmerica in connection with the merger and related transactions are as      
follows:                                                                        

                                                                [Download Table]
                                                                    
Investment Banking Fee..............................  $ 3,418,500(1)
Legal and Accounting................................      775,000   
Printing and Distribution...........................       50,000   
SEC and Regulatory Filings..........................       36,635   
Miscellaneous.......................................       19,865   
                                                      -----------   
     Total..........................................  $ 4,300,000   
                                                      ===========   

---------------                                                                 
(1) DLJ is also entitled to reimbursement of out-of-pocket expenses incurred in 
 connection with its engagement (including reasonable fees and expenses of
counsel).                                                               

INDEPENDENT ACCOUNTANTS 

   PricewaterhouseCoopers LLP, independent certified public accountants, are
the independent accountants for CogenAmerica. A representative of               
PricewaterhouseCoopers LLP, will be available at the special meeting to answer  
questions.                                                                      

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WHERE YOU CAN FIND MORE INFORMATION 

    CogenAmerica files annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any such reports,     
statements or other information at the SEC's public reference rooms in          
Washington, DC, New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms.           
CogenAmerica's SEC filings are also available to the public from commercial     
document retrieval services and at the world wide web site maintained by the SEC
at http:\\www.sec.gov. Reports, proxy statements and other information          
concerning CogenAmerica also may be inspected at the offices of the National    
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, DC    
20006.                                                                          

  The SEC allows CogenAmerica to incorporate by reference information into
this document, which means that CogenAmerica can disclose important information 
to you by referring you to another document filed separately with the SEC. The  
information incorporated by reference is deemed to be a part of this document,  
except for any information superseded by information contained directly in this 
document. This document incorporates by reference certain documents that        
CogenAmerica has previously filed with the SEC. These documents contain         
important business information about CogenAmerica and its financial condition.  

 CogenAmerica may have sent to you some of the documents incorporated by
reference, but you can obtain any of them through CogenAmerica or the SEC or the
SECs world wide web site described above. Documents incorporated by reference   
are available from CogenAmerica without charge, excluding all exhibits, unless  
specifically incorporated by reference as an exhibit to this document.          
Stockholders may obtain documents incorporated by reference in this document by 
requesting them in writing or by telephone at the following address:            

Cogeneration Corporation of America                                   
One Carlson Parkway, Suite 240                                        
Minneapolis, Minnesota 55447-4454                                     
Attention: Thomas L. Osteraas                                         
Telephone: (612) 745-7900                                             

   Calpine, Acquisition Sub and NRG have filed a Schedule 13E-3 with the SEC
with respect to the merger. The Schedule 13E-3, including any amendments and    
exhibits filed or incorporated by reference as a part thereof, is available for 
inspection or copying as set forth above. Statements contained in this proxy    
statement or in any document incorporated herein by reference as to the contents
of any contract or other document referred to herein or therein are not         
necessarily complete and in each instance reference is made to such contract or 
other document filed as an exhibit to the Schedule 13E-3 or such other document,
and each such statement shall be deemed qualified in its entirely by such       
reference.                                                                      

   IF YOU WOULD LIKE TO REQUEST DOCUMENTS FROM COGENAMERICA, PLEASE DO SO AT
LEAST FIVE BUSINESS DAYS BEFORE THE DATE OF THE SPECIAL MEETING IN ORDER TO     
RECEIVE TIMELY DELIVERY OF SUCH DOCUMENTS PRIOR TO THE SPECIAL MEETING.         

You should rely only on the information contained or incorporated by  
reference in this document to vote your shares at the special meeting.          
CogenAmerica has not authorized anyone to provide you with information that is  
different from what is contained in this                                        

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document. This document is dated November 15, 1999. You should not assume that  
the information contained in this document is accurate as of any date other than
that date, and the mailing of this document to stockholders does not create any 
implication to the contrary. This proxy statement does not constitute a         
solicitation of a proxy in any jurisdiction where, or to or from any person to  
whom, it is unlawful to make such proxy solicitation in such jurisdiction.      

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

    The following documents previously filed with the SEC by CogenAmerica (SEC
File No. 1-9208) are incorporated by reference in this proxy statement:         

     (i) CogenAmerica's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998;                                              

     (ii) CogenAmerica's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999;                                                 

      (iii) CogenAmerica's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999; and                                              

        (iv) CogenAmerica's Current Report on Form 8-K filed on September 2,
1999.                                                                 

All documents filed by CogenAmerica with the SEC pursuant to Sections 
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this document  
and prior to the date of the special meeting will be deemed to be incorporated  
by reference in this document. Information filed with the SEC in future         
documents will automatically update and supersede the information in this       
document.                                                                       

STOCKHOLDER PROPOSALS 

  If the merger is not completed for any reason, proposals of stockholders
intended to be presented at the 2000 Annual Meeting of Stockholders must be     
received by Thomas L. Osteraas, Secretary and General Counsel, Cogeneration     
Corporation of America, One Carlson Parkway, Suite 240, Minneapolis, Minnesota  
55447-4454 on or prior to January 20, 2000 to be eligible for inclusion in      
CogenAmerica's proxy statement and proxy card relating to that meeting.         
CogenAmerica is not required to include in its proxy statement and proxy card   
for the 2000 Annual Meeting any stockholder proposals which do not meet all of  
the requirements then in effect for inclusion.                                  

OTHER MATTERS 

Management knows of no other business to be presented at the special  
meeting. If other matters do properly come before the meeting, or any           
adjournment or adjournments thereof, it is the intention of the persons named in
the proxy to vote on such matters according to their best judgment unless the   
authority to do so is withheld in such proxy.                                   

                                      By Order of the Board of Directors

                                          JULIE A. JORGENSEN
                      Julie A. Jorgensen
                                         President and Chief Executive Officer

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CAUTIONARY STATEMENT CONCERNING 
FORWARD-LOOKING INFORMATION 

   THIS PROXY STATEMENT, THE SCHEDULE 13E-3 TRANSACTION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION AND OTHER STATEMENTS MADE FROM TIME TO   
TIME BY COGENAMERICA, CALPINE, ACQUISITION SUB, NRG OR THEIR REPRESENTATIVES    
CONTAIN FORWARD-LOOKING STATEMENTS. THOSE STATEMENTS INCLUDE STATEMENTS         
REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF COGENAMERICA, CALPINE,  
ACQUISITION SUB AND NRG AND MEMBERS OF THEIR RESPECTIVE MANAGEMENT TEAMS, AS    
WELL AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE BASED. SUCH FORWARD-LOOKING
STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND       
UNCERTAINTIES. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY  
SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT
OF COGENAMERICA, CALPINE, ACQUISITION SUB AND NRG THAT COULD CAUSE ACTUAL       
RESULTS TO DIFFER MATERIALLY FROM THOSE IN FORWARD-LOOKING STATEMENTS INCLUDE,  
BUT ARE NOT LIMITED TO, THE RISKS DETAILED IN THIS PROXY STATEMENT AND THE      
SCHEDULE 13E-3 TRANSACTION STATEMENT, AND THOSE FACTORS SET FORTH FROM TIME TO  
TIME IN REPORTS OF COGENAMERICA FILED WITH THE SECURITIES AND EXCHANGE          
COMMISSION. THE PROTECTION FROM LIABILITY OF THE SAFE HARBOR FOR FORWARD-LOOKING
STATEMENTS CONTAINED IN THE PRIVATE SECURITIES REFORM ACT OF 1995 IS NOT        
APPLICABLE TO THE INFORMATION CONTAINED IN THIS PROXY STATEMENT OR THE SCHEDULE 
13E-3 TRANSACTION STATEMENT OR IN STATEMENTS INCORPORATED BY REFERENCE IN EITHER
DOCUMENT.                                                                       

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APPENDIX TO THE PROXY STATEMENT 

                                                                [Download Table]
                                                                   
APPENDIX A -- Agreement and Plan of Merger..................    A-1
APPENDIX B -- Amendment to CogenAmerica Certificate of             
  Incorporation.............................................    B-1
APPENDIX C -- Opinion of Donaldson Lufkin & Jenrette               
  Securities Corporation....................................    C-1
APPENDIX D -- Text of Section 262 of the Delaware General          
  Corporation Law...........................................    D-1

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                                                                      APPENDIX A

AGREEMENT AND PLAN OF MERGER
DATED AUGUST 26, 1999 
AMONG 
CALPINE CORPORATION,
CALPINE EAST ACQUISITION CORP.
AND 
COGENERATION CORPORATION OF AMERICA 

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TABLE OF CONTENTS 

AGREEMENT AND PLAN OF MERGER

                                                                [Download Table]
                                                                             
ARTICLE I       THE MERGER................................................  1
  Section 1.1   The Merger................................................  1
  Section 1.2   Effective Time............................................  1
  Section 1.3   Effects of the Merger.....................................  2
  Section 1.4   Charter and By-Laws; Directors and Officers...............  2
  Section 1.5   Conversion of Securities..................................  2
  Section 1.6   Payment Agent.............................................  4
  Section 1.7   Transfer Taxes; Withholding...............................  4
  Section 1.8   Return of Payment Fund....................................  5
  Section 1.9   No Further Ownership Rights in Company Common Stock.......  5
  Section 1.10  Closing of Company Transfer Books.........................  5
  Section 1.11  Lost Certificates.........................................  5
  Section 1.12  Further Assurances........................................  5
  Section 1.13  Closing...................................................  5
ARTICLE II      REPRESENTATIONS AND WARRANTIES OF                            
                PARENT AND SUB............................................  6
  Section 2.1   Organization, Standing and Power..........................  6
  Section 2.2   Authority.................................................  6
  Section 2.3   Consents and Approvals; No Violation......................  7
  Section 2.4   Information Supplied......................................  8
  Section 2.5   Actions and Proceedings...................................  8
  Section 2.6   Operations of Sub.........................................  8
  Section 2.7   Brokers...................................................  8
  Section 2.8   Financing.................................................  8
ARTICLE III     REPRESENTATIONS AND WARRANTIES OF                            
                THE COMPANY...............................................  9
  Section 3.1   Organization, Standing and Power..........................  9
  Section 3.2   Capital Structure.........................................  9
  Section 3.3   Authority................................................. 10
  Section 3.4   Consents and Approvals; No Violation...................... 10
  Section 3.5   SEC Documents and Other Reports........................... 11
  Section 3.6   Information Supplied...................................... 12
  Section 3.7   Absence of Certain Changes or Events...................... 12
  Section 3.8   Permits and Compliance.................................... 13
  Section 3.9   Tax Matters............................................... 14
  Section 3.10  Actions and Proceedings................................... 15
  Section 3.11  Certain Agreements........................................ 16
  Section 3.12  ERISA..................................................... 16
  Section 3.13  Compliance with Worker Safety and Environmental Laws...... 17
  Section 3.14  Labor Matters............................................. 18
  Section 3.15  State Takeover Statute.................................... 18
  Section 3.16  Required Vote of Company Stockholders..................... 18
  Section 3.17  Brokers................................................... 18
  Section 3.18  Opinion of Financial Advisor.............................. 18
  Section 3.19  Utility Regulation........................................ 18
  Section 3.20  Insurance................................................. 19

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                                                                [Download Table]
                                                                             
  Section 3.21  Related Party Transactions................................ 19
ARTICLE IV      COVENANTS OF THE COMPANY.................................. 19
  Section 4.1   Conduct of Business Pending the Merger.................... 19
  Section 4.2   No Solicitation........................................... 22
ARTICLE V       ADDITIONAL AGREEMENTS..................................... 23
  Section 5.1   Stockholder Meeting....................................... 23
  Section 5.2   Preparation of the Proxy Statement and Schedule 13e-3..... 23
  Section 5.3   Access to Information..................................... 24
  Section 5.4   Fees and Expenses......................................... 24
  Section 5.5   Best Efforts.............................................. 25
  Section 5.6   Public Announcements...................................... 26
  Section 5.7   Real Estate Transfer and Gains Tax........................ 26
  Section 5.8   Indemnification; Directors and Officers Insurance......... 26
  Section 5.9   Notification of Certain Matters........................... 28
  Section 5.10  Employee Benefit Plans and Agreements..................... 28
  Section 5.11  Performance by Sub........................................ 28
  Section 5.12  Additional Consents and Approvals......................... 28
ARTICLE VI      CONDITIONS PRECEDENT TO THE MERGER........................ 29
  Section 6.1   Conditions to Each Party's Obligation to Effect the          
                Merger.................................................... 29
  Section 6.2   Conditions to Obligation of the Company to Effect the        
                Merger.................................................... 30
  Section 6.3   Conditions to Obligations of Parent and Sub to Effect the    
                Merger.................................................... 30
ARTICLE VII     TERMINATION, AMENDMENT AND WAIVER......................... 31
  Section 7.1   Termination............................................... 31
  Section 7.2   Effect of Termination..................................... 32
  Section 7.3   Amendment................................................. 32
  Section 7.4   Waiver.................................................... 32
ARTICLE VIII    GENERAL PROVISIONS........................................ 33
  Section 8.1   Non-Survival of Representations and Warranties............ 33
  Section 8.2   Notices................................................... 33
  Section 8.3   Interpretation............................................ 33
  Section 8.4   Counterparts.............................................. 34
  Section 8.5   Entire Agreement; No Third-Party Beneficiaries............ 34
  Section 8.6   Governing Law............................................. 34
  Section 8.7   Assignment................................................ 34
  Section 8.8   Severability.............................................. 34
  Section 8.9   Enforcement of this Agreement............................. 34
  Section 8.10  Consent to Jurisdiction................................... 34

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER, dated as of August 26, 1999 (the   
"Agreement"), is executed by and among CALPINE CORPORATION, a Delaware          
corporation ("Parent"), CALPINE EAST ACQUISITION CORP., a Delaware corporation  
and a subsidiary of Parent ("Sub"), and COGENERATION CORPORATION OF AMERICA, a  
Delaware corporation (the "Company") (Sub and the Company being hereinafter     
collectively referred to as the "Constituent Corporations").                    

RECITALS: 

    WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the merger (the "Merger") of Sub with and into the Company, on the
terms and subject to the conditions set forth in this Agreement, whereby each   
outstanding share of common stock, par value $.01 per share, of the Company (the
"Company Common Stock") not owned by Parent, Sub or the Company will be         
converted into the right to receive $25.00 per share (the "Merger Price") in    
cash pursuant to this Agreement;                                                

    WHEREAS, simultaneously with the execution and delivery of this Agreement,
Parent and NRG Energy, Inc., a Delaware corporation (the "Principal Company     
Stockholder"), are entering into an agreement (the "Company Stockholder         
Agreement" and together with this Agreement, the "Transaction Documents")       
pursuant to which the Principal Company Stockholder and Parent or Sub have      
agreed to take specified actions in connection with the transactions            
contemplated by this Agreement;                                                 

 WHEREAS, the Board of Directors of the Company has duly and unanimously
adopted resolutions approving the transactions contemplated by the Transaction  
Documents in form and substance sufficient to render Section 203 of the Delaware
General Corporation Law (the "DGCL") inapplicable to Parent and Sub; and        

WHEREAS, Parent, Sub and the Company desire to make certain           
representations, warranties, covenants and agreements in connection with the    
Merger and also to prescribe various conditions to the Merger.                  

NOW, THEREFORE, in consideration of the premises, representations,    
warranties and agreements herein contained, the parties agree as follows:       

ARTICLE I 

THE MERGER

Section 1.1 The Merger. Upon the terms and subject to the conditions  
hereof, and in accordance with the DGCL, Sub shall be merged with and into the  
Company at the Effective Time (as hereinafter defined). Following the Merger,   
the separate corporate existence of Sub shall cease and the Company shall       
continue as the surviving corporation (the "Surviving Corporation") and shall   
succeed to and assume all the rights and obligations of Sub in accordance with  
the DGCL.                                                                       

Section 1.2 Effective Time. The Merger shall become effective when a  
Certificate of Merger (the "Certificate of Merger"), executed in accordance with
the relevant provisions                                                         

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of the DGCL, is filed with the Secretary of State of the State of Delaware;     
provided, however, that, upon the mutual consent of the Constituent             
Corporations, the Certificate of Merger may provide for a later date or time of 
effectiveness of the Merger. When used in this Agreement, the term "Effective   
Time" shall mean the date and time at which the Certificate of Merger is        
accepted for record or such later date or time established by the Certificate of
Merger. The filing of the Certificate of Merger shall be made on the date of the
Closing (as hereinafter defined).                                               

  Section 1.3 Effects of the Merger. The Merger shall have the effects set
forth in Section 259 of the DGCL.                                               

Section 1.4 Certificate of Incorporation and By-Laws; Directors and   
Officers                                                                        

(a) Certificate of Incorporation and By-Laws. The Certificate of      
Incorporation of the Company shall be amended as set forth in Exhibit A to this 
Agreement (the "Amendment"), which amendment shall be effective as soon as      
practicable after the Company's shareholders have approved the amendment and    
prior to the Effective Time. At the Effective Time, the Certificate of          
Incorporation of the Company, as in effect immediately prior to the Effective   
Time, shall be amended and restated to read as did the Certificate of           
Incorporation of Sub immediately prior to the Effective Time. At the Effective  
Time, the By-Laws of the Company, as in effect immediately prior to the         
Effective Time, shall be amended and restated to read as did the By-Laws of Sub 
immediately prior to the Effective Time. As so amended and restated, such       
Certificate of Incorporation and By-Laws of the Company shall be the Certificate
of Incorporation and By-Laws of the Surviving Corporation until thereafter      
changed or amended as provided therein or by applicable law.                    

(b) Directors and Officers. From and after the Effective Time, the    
directors of Sub at the Effective Time shall be the directors of the Surviving  
Corporation, until the earlier of their resignation or removal or until their   
respective successors are duly elected and qualified, as the case may be. From  
and after the Effective Time, the officers of the Sub at the Effective Time     
shall be the officers of the Surviving Corporation, until the earlier of their  
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.                                                  

   Section 1.5 Conversion of Securities. As of the Effective Time, by virtue
of the Merger and without any action on the part of Sub, the Company or the     
holders of any securities of the Constituent Corporations:                      

   (a) Each issued and outstanding share of common stock, without par value,
of Sub shall be converted into one validly issued, fully paid and nonassessable 
share of common stock of the Surviving Corporation with the same rights, powers 
and privileges as the shares so converted and shall constitute the only         
outstanding shares of capital stock of the Surviving Corporation.               

     (b) All shares of Company Common Stock that are held in the treasury of the
Company or owned by Parent, Sub or any Subsidiary (as defined in Section 2.1) of
either of them shall be canceled and no cash or other consideration shall be    
delivered in exchange therefor.                                                 

   (c) Each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares to be canceled in accordance with
Section 1.5(b) and Dissenting Shares (as defined in Section 1.5(e)) shall be    
converted                                                                       

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into the right to receive an amount of cash equal to the Merger Price without   
interest. All such shares of Company Common Stock, when so converted, shall no  
longer be outstanding and shall automatically be canceled and retired and each  
holder of a certificate (the "Certificate") formerly representing any such      
shares shall cease to have any rights with respect thereto, except the right to 
receive the cash to be paid to such holder pursuant to Article I hereof (the    
"Merger Consideration") upon the surrender of a Certificate or Certificates in  
accordance with Section 1.6 hereof.                                             

   (d)(i) At the Effective Time, each outstanding option to purchase Company
Common Stock (each a "Company Stock Option") granted under the Company Stock    
Plans (as defined herein), whether or not then exercisable, shall be cancelled  
and each holder of a cancelled Company Stock Option shall be entitled to receive
at the Effective Time or as soon as practicable thereafter from the Company,    
upon execution and delivery to the Payment Agent (as defined in Section 1.6     
below) of an option termination agreement, in form and substance reasonably     
acceptable to Parent in consideration for the cancellation of such Company Stock
Option an amount in cash (the "Option Consideration") equal to (x) the number of
shares of Company Common Stock previously subject to such Company Stock Option  
that but for the cancellation thereof pursuant to the provisions of this Section
1.5(d) would have been currently exercisable (after giving effect to any        
acceleration of vesting pursuant to the terms of such Company Stock Option as a 
result of the consummation of the Merger), multiplied by (y) the excess, if any,
of the Merger Price over the exercise price per share of Company Common Stock   
previously subject to such Company Stock Option (such payment to be net of      
applicable withholding taxes).                                                  

     (ii) Except as provided herein or as otherwise agreed to by the parties and
to the extent permitted by the Company Stock Plans, (x) the Company Stock Plans 
shall terminate as of the Effective Time and the provisions in any other plan,  
program or arrangement providing for the issuance or grant of any other interest
in respect of the capital stock of the Company or any of its Subsidiaries shall 
be deleted as of the Effective Time and (y) the Company shall use all reasonable
efforts to ensure that following the Effective Time no holder of Company Stock  
Options or any participant in the Company Stock Plans or any other plans,       
programs or arrangements shall have any right thereunder to acquire any equity  
securities of the Company, the Surviving Corporation or any subsidiary thereof. 

(e) Notwithstanding anything in this Agreement to the contrary, shares
("Dissenting Shares") of Company Common Stock that are outstanding immediately  
prior to the Effective Time and that are held by Persons who are entitled to    
demand and have properly demanded dissention rights with respect to such        
Dissenting Shares pursuant to, and who comply in all respects with, Section 262 
of the DGCL ("Section 262") shall not be converted into the Merger Consideration
as provided in Section 1.5(c), but rather the holders of Dissenting Shares shall
be entitled to payment of the fair market value of such Dissenting Shares in    
accordance with Section 262; provided, however, that if any holder of Dissenting
Shares shall fail to perfect or otherwise shall waive, withdraw or lose the     
right to Dissenting under Section 262, then the right of such holder to be paid 
the fair value of such holder's Dissenting Shares shall cease and such          
Dissenting Shares shall be treated as if they had been converted as of the      
Effective Time into the Merger Consideration, as provided in Section 1.5(c). The
Company shall serve prompt notice to Parent of any demands received by the      
Company for dissenter's rights with respect to any shares of Company Common     
Stock, and Parent shall have the right to participate in and direct all         

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negotiations and proceedings with respect to such demands. The Company shall    
not, except with the prior written consent of Parent, make any payment with     
respect to, or settle or offer to settle, any such demands, or agree to do any  
of the foregoing.                                                               

Section 1.6 Payment Agent.                                            

   (a) Exchange of Certificates. Parent shall authorize a commercial bank or
trust company (or such other Person or Persons as shall be reasonably acceptable
to Parent and the Company) to act as Payment Agent hereunder (the "Payment      
Agent"). As soon as practicable after the Effective Time, Parent shall deposit  
with the Payment Agent, in trust for the holders of shares of Company Common    
Stock converted in the Merger and holders of Company Stock Options, an amount of
cash equal to or exceeding the aggregate Merger Consideration to be paid to     
holders of Company Common Stock pursuant to Article I hereof and any Option     
Consideration to be paid to holders of Company Stock Options pursuant to the    
terms of Section 1.5(d) (such amount hereinafter the "Payment Fund").           

   (b) Exchange Procedures. Parent shall instruct the Payment Agent, as soon
as practicable after the Effective Time, to mail to each record holder of a     
Certificate or Certificates a letter of transmittal, which shall specify that   
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon actual delivery of the Certificates to the Payment Agent, and   
shall contain instructions for use in effecting the surrender of the            
Certificates in exchange for the Merger Consideration. Upon surrender for       
cancellation to the Payment Agent of all Certificates held by any record holder 
of a Certificate, together with such letter of transmittal, duly executed, the  
holder of such Certificate shall be entitled to receive in exchange therefor a  
check representing the Merger Consideration, and any Certificate so surrendered 
shall forthwith be canceled. Holders of Company Stock Options shall receive     
payment, if any, for such Company Stock Options pursuant to Section 1.5(d).     

    Section 1.7 Transfer Taxes; Withholding. If any Merger Consideration is to
be paid to any Person other than to the Person named in the Certificate         
surrendered in exchange therefor, it shall be a condition of such exchange that 
the Certificate so surrendered shall be properly endorsed and otherwise in      
proper form for transfer and that the Person requesting such exchange shall pay 
to the Payment Agent any transfer or other taxes required by reason of the      
payment of the Merger Consideration to a Person other than to the Person named  
in the Certificate surrendered, or shall establish to the satisfaction of the   
Payment Agent that such tax has been paid or is not applicable. Parent or the   
Payment Agent shall be entitled to deduct and withhold from the consideration   
otherwise payable pursuant to this Agreement to any holder of shares of Company 
Common Stock or holder of a Company Stock Option such amounts as Parent or the  
Payment Agent is required to deduct and withhold with respect to the making of  
such payment under the Internal Revenue Code of 1986, as amended (the "Code") or
under any provision of state, local or foreign tax law. To the extent that      
amounts are so withheld by Parent or the Payment Agent, such withheld amounts   
shall be treated for all purposes of this Agreement as having been paid to the  
holder of the shares of Company Common Stock or the holder of a Company Stock   
Option in respect of which such deduction and withholding was made by Parent or 
the Payment Agent. For purposes of this Agreement, "Person" shall mean an       
individual, corporation, partnership, limited liability company, joint venture, 
association, trust, unincorporated organization or other entity.                

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   Section 1.8 Return of Payment Fund. Any portion of the Payment Fund which
remains undistributed for six months after the Effective Time shall be delivered
to Parent, upon demand of Parent, and any such former stockholders who have not 
theretofore complied with this Article I and holders of Company Stock Options   
who have not yet received the Option Consideration shall thereafter look only to
Parent for payment of their claim for any Merger Consideration or Option        
Consideration, as the case may be. Neither Parent nor the Surviving Corporation 
shall be liable to any former holder of Company Common Stock or holder of a     
Company Stock Option for any cash held in the Payment Fund which is delivered to
a public official pursuant to any applicable abandoned property, escheat or     
similar law.                                                                    

Section 1.9 No Further Ownership Rights in Company Common Stock. The  
payment of the Merger Consideration upon surrender of any Certificate shall be  
deemed to constitute full satisfaction of all rights pertaining to the shares of
Company Common Stock represented by such Certificate.                           

    Section 1.10 Closing of Company Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and no transfer of shares of
Company Common Stock shall thereafter be made on the records of the Company. If,
after the Effective Time, Certificates are presented to the Surviving           
Corporation, the Payment Agent or the Parent, such Certificates shall be        
canceled and exchanged as provided in this Article I.                           

  Section 1.11 Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person 
claiming such Certificate to be lost, stolen or destroyed and, if required by   
Parent or the Payment Agent, the posting by such Person of a bond, in such      
reasonable amount as Parent or the Payment Agent may direct as indemnity against
any claim that may be made against them with respect to such Certificate, the   
Payment Agent will pay the Merger Consideration in exchange for such lost,      
stolen or destroyed Certificate.                                                

  Section 1.12 Further Assurances. If at any time after the Effective Time
the Surviving Corporation shall consider or be advised that any deeds, bills of 
sale, assignments or assurances or any other acts or things are necessary,      
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in 
the Surviving Corporation its right, title or interest in, to or under any of   
the rights, privileges, powers, franchises, properties or assets of either of   
the Constituent Corporations, or (b) otherwise to carry out the purposes of this
Agreement, the Surviving Corporation and its proper officers and directors or   
their designees shall be authorized to execute and deliver, in the name and on  
behalf of either of the Constituent Corporations, all such deeds, bills of sale,
assignments and assurances and to do, in the name and on behalf of either       
Constituent Corporation, all such other acts and things as may be necessary,    
desirable or proper to vest, perfect or confirm the Surviving Corporation's     
right, title or interest in, to or under any of the rights, privileges, powers, 
franchises, properties or assets of such Constituent Corporation and otherwise  
to carry out the purposes of this Agreement.                                    

    Section 1.13 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") and all actions specified in this Agreement to occur  
at the Closing shall take place at the offices of Kaplan, Strangis and Kaplan,  
P.A., 5500 Norwest Center, 90 South Seventh Street, Minneapolis, Minnesota, at  
10:00 a.m., local time, no later than the second business day following the day 
on which the last of the conditions set forth in                                

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Article VI shall have been fulfilled or waived (if permissible) or at such other
time and place as Parent and the Company shall agree.                           

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB

Parent and Sub represent and warrant to the Company as follows:       

   Section 2.1 Organization, Standing and Power. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the laws
of its place of incorporation and has the requisite corporate power and         
authority to carry on its business as now being conducted. Parent is duly       
qualified to do business, and is in good standing in each jurisdiction where the
character of the properties owned or held under lease by it or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not, individually or in the aggregate, have a Material Adverse  
Effect (as hereinafter defined) on Parent. For purposes of this Agreement (a)   
"Material Adverse Change" or "Material Adverse Effect" means, when used with    
respect to Parent or the Company, as the case may be, any change or effect that 
is or could reasonably be expected (as far as can be foreseen at the time) to be
materially adverse to the business, assets, liabilities, financial condition or 
results of operations of Parent and its Subsidiaries, taken as a whole, or the  
Company and its Subsidiaries, taken as a whole, as the case may be; provided,   
however, that in determining whether a Material Adverse Change or Material      
Adverse Effect has occurred with respect to either referenced party, any change 
or effect, to the extent it is attributable to changes in prevailing interest   
rates or to any change in general economic conditions affecting companies in    
industries similar to the industries in which the Company and its Subsidiaries  
or Parent and its Subsidiaries, as the case may be, operate, shall not be       
considered when determining if a Material Adverse Change or Material Adverse    
Effect has occurred; and (b) "Subsidiary" means any corporation, partnership,   
limited liability company, joint venture or other legal entity of which Parent  
or the Company, as the case may be (either alone or through or together with any
other Subsidiary), owns, directly or indirectly, 50% or more of the stock or    
other equity interests the holders of which are generally entitled to vote for  
the election of the board of directors or other governing body of such          
corporation, partnership, limited liability company, joint venture or other     
legal entity.                                                                   

  Section 2.2 Authority. On or prior to the date of this Agreement, Parent
and Sub have each approved the Transactions and the Transaction Documents. Each 
of Parent and Sub has the requisite corporate power and authority to enter into 
the Transaction Documents and to consummate the transactions contemplated       
hereby. The execution and delivery of the Transaction Documents by Parent and   
Sub to which it is a party and the consummation by Parent and Sub of the        
transactions contemplated hereby have been duly and validly authorized by all   
necessary corporate action on the part of Parent or Sub, as the case may be,    
subject to the filing of the Certificate of Merger with the Secretary of State  
of the State of Delaware. The Transaction Documents to which it is a party have 
been duly executed and delivered by Parent and Sub and constitute the valid and 
binding obligations of each of Parent or Sub, as the case may be, enforceable   
against them in accordance with its terms, except as the enforceability hereof  
may be limited by bankruptcy, insolvency, moratorium or other similar laws      
affecting the enforcement of creditors' rights generally and to judicial        
limitations on the enforcement of specific performance and other equitable      
remedies.                                                                       

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Section 2.3 Consents and Approvals; No Violation. Assuming that all   
consents, approvals, authorizations and other actions described in this Section 
2.3 have been obtained and all filings and obligations described in this Section
2.3 have been made, the execution and delivery of the Transaction Documents and 
the consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not result in any violation of, or default (with or      
without notice or lapse of time, or both) under, or give to others a right of   
termination, cancellation or acceleration of any obligation or the loss of a    
material benefit under, or result in the creation of any lien, security         
interest, charge or encumbrance upon any of the properties or assets of Parent  
or any of its Subsidiaries under, any provision of (i) the Certificate of       
Incorporation or the By-Laws of Parent or the Certificate of Incorporation or   
By-Laws of Sub, (ii) any provision of the comparable charter or organization    
documents of any of Parent's Subsidiaries, (iii) any loan or credit agreement,  
note, bond, mortgage, indenture, lease or other agreement, instrument, permit,  
concession, franchise or license applicable to Parent or any of its Subsidiaries
or (iv) any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or any of its Subsidiaries or any of their respective      
properties or assets, other than, in the case of clauses (ii), (iii) or (iv),   
any such violations, defaults, rights, liens, security interests, charges or    
encumbrances that, individually or in the aggregate, would not have a Material  
Adverse Effect on Parent, materially impair the ability of Parent or Sub to     
perform their respective obligations hereunder or prevent the consummation of   
any of the transactions contemplated hereby. No filing or registration with, or 
authorization, consent or approval of, any domestic (federal and state), foreign
or supranational court, commission, governmental body, regulatory agency,       
authority or tribunal (a "Governmental Entity") is required by or with respect  
to Parent or any of its Subsidiaries in connection with the execution, delivery 
and performance of any Transaction Agreement by Parent or Sub or is necessary   
for the consummation of the Transactions, except for (i) in connection, or in   
compliance, with the provisions of the Hart-Scott-Rodino AntiTrust Improvement  
Act of 1976 (the "HSR Act") and the Securities Exchange Act of 1934, as amended 
(the "Exchange Act"), (ii) the final order of the Federal Energy Regulatory     
Commission ("FERC") approving the transfer of jurisdictional facilities under   
Section 203 of the Federal Power Act in connection with the power generating    
project of one of the Company's subsidiaries in Parlin, New Jersey (the         
"Regulatory Approval"), (iii) in connection, or in compliance, with the         
provisions of the New Jersey Industrial Site Recovery Act and the New Jersey    
Environmental Cleanup Responsibility Act (the "Applicable New Jersey Law"), (iv)
the filing of the Certificate of Merger with the Secretary of State of the State
of Delaware and appropriate documents with the relevant authorities of other    
states in which the Company or any of its Subsidiaries is qualified to do       
business, (v) such filings, authorizations, orders, notices and approvals as may
be required by state takeover laws (the "State Takeover Approvals"), and (vi)   
such consents, orders, authorizations, registrations, declarations and filings  
the failure of which to be obtained or made would not, individually or in the   
aggregate, have a Material Adverse Effect on Parent, or materially impair the   
ability of Parent or Sub to perform its obligations hereunder or prevent the    
consummation of any of the transactions contemplated hereby. Neither the Parent 
nor the Sub is an electric utility or an electric utility holding company or    
companies, or any affiliate of either, in each case as those terms are utilized 
by the FERC in regulations or orders implementing the Public Utility Regulatory 
Policies Act of 1978, as amended, and its successors ("PURPA"). Consummation of 
the Merger will not result in the loss of the status of any project as a        
"Qualifying Facility" as defined under PURPA in which the Company or any of its 
Subsidiaries, directly or indirectly, have an equity interest.                  

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     Section 2.4 Information Supplied. None of the information to be supplied by
Parent or Sub for inclusion or incorporation by reference in the Schedule 13e-3 
to be filed pursuant to the Exchange Act in connection with the transactions    
contemplated by the Transaction Documents (together with any amendments or      
supplements thereto, the "Schedule 13e-3") or the proxy statement relating to   
the Stockholder Meeting (as hereinafter defined) (together with any amendments  
or supplements thereto, the "Proxy Statement") will, (i) in the case of the     
Schedule 13e-3, at the time of its filing, at the time of the dissemination of  
the Schedule 13e-3 and until the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading or (ii) in  
the case of the Proxy Statement and at the time of the mailing of the Proxy     
Statement and at the time of the Stockholder Meeting, contain any untrue        
statement of a material fact or omit to state any material fact required to be  
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading, except that no     
representation is made by Parent or Sub with respect to statements made or      
incorporated by reference therein based on information supplied by or on behalf 
of the Company or NRG Energy, Inc. for inclusion or incorporation by reference  
therein.                                                                        

Section 2.5 Actions and Proceedings. As of the date of this Agreement,
there are no outstanding orders, judgments, injunctions, awards or decrees of   
any Governmental Entity against or involving Parent or any of its Subsidiaries, 
or against or involving any of the present or former directors, officers,       
employees, consultants, agents or stockholders of Parent or any of its          
Subsidiaries, as such, or any of its or their properties, assets or business    
that, individually or in the aggregate, would materially impair the ability of  
Parent to perform its obligations hereunder. As of the date of this Agreement,  
there are no actions, suits or claims or legal, administrative or arbitrative   
proceedings or investigations pending or, to the Knowledge of Parent, threatened
against or involving Parent or any of its Subsidiaries or any of its or their   
present or former directors, officers, employees, consultants, agents or        
stockholders, as such, or any of its or their properties, assets or business    
that, individually or in the aggregate, would materially impair the ability of  
Parent to perform its obligations hereunder. As of the date hereof, there are no
actions, suits, labor disputes or other litigation, legal or administrative     
proceedings or governmental investigations pending or, to the Knowledge of      
Parent, threatened against or affecting Parent or any of its Subsidiaries or any
of its or their present or former officers, directors, employees, consultants,  
agents or stockholders, as such, or any of its or their properties, assets or   
business relating to the transactions contemplated by this Agreement. For       
purposes of this Agreement, "Knowledge of Parent" means the actual knowledge of 
the executive officers of Parent after due inquiry.                             

  Section 2.6 Operations of Sub. Sub is a direct subsidiary of Parent, was
formed solely for the purpose of engaging in the transactions contemplated      
hereby, has engaged in no other business activities and has conducted its       
operations only as contemplated hereby.                                         

Section 2.7 Brokers. No broker, investment banker or other Person is  
entitled to any broker's, finder's or other similar fee or commission in        
connection with the transaction contemplated by this Agreement based upon the   
arrangements made by or on behalf of Parent or Sub.                             

     Section 2.8 Financing. Parent has sufficient capital resources necessary to
perform its obligations under the Transaction Documents, including but not      
limited to the advances under Section 5.11.                                     

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ARTICLE III 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

    The Company represents and warrants to Parent and Sub that, subject to the
disclosures set forth in the letter dated as of the date hereof and delivered on
the date hereof by Company to Parent (the "Company Letter"):                    

    Section 3.1 Organization, Standing and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the     
State of Delaware and has the requisite corporate power and authority to carry  
on its business as now being conducted. Each Subsidiary of the Company is duly  
organized, validly existing and in good standing under the laws of the          
jurisdiction in which it is organized and has the requisite corporate (in the   
case of a Subsidiary that is a corporation) or other power and authority to     
carry on its business as now being conducted, except where the failure to be so 
organized, existing or in good standing or to have such power or authority would
not, individually or in the aggregate, have a Material Adverse Effect on the    
Company. The Company and each of its Subsidiaries are duly qualified to do      
business, and are in good standing, in each jurisdiction where the character of 
their properties owned or held under lease or the nature of their activities    
makes such qualification necessary, except where the failure to be so qualified 
would not, individually or in the aggregate, have a Material Adverse Effect on  
the Company. The Company has delivered or otherwise made available to Parent    
true and complete and correct copies of the Company's Certificate of            
Incorporation and By-laws and the certificate of incorporation, by-laws or other
constitutive documents of each of the Company's Subsidiaries, in each case as   
amended to the date of this Agreement.                                          

    Section 3.2 Capital Structure. The authorized capital stock of the Company
consists of 50,000,000 shares of Company Common Stock and 20,000,000 shares of  
undesignated preferred stock, par value $.01 per share ("Company Preferred      
Stock"). As of the date of this Agreement, (i) 6,857,269 shares of Company      
Common Stock were issued and outstanding, all of which were duly authorized,    
validly issued, fully paid and nonassessable and free of preemptive rights, (ii)
39,800 shares of Company Common Stock were held in the treasury of the Company  
or by Subsidiaries of the Company, (iii) 877,000 shares of Company Common Stock 
were reserved for issuance pursuant to outstanding Company Stock Options under  
the Company's stock plans described under Section 3.2 of the Company Letter     
(collectively, the "Company Stock Plans"), and (iv) 797,000 Company Stock       
Options are currently exercisable or will become exercisable upon consummation  
of the Transactions. A true and complete list of the options (and their exercise
prices) referred to in clause (iv) above that are entitled to Option            
Consideration are set forth on Section 3.2 of the Company Letter. No Company    
Stock Options have been granted since May 31, 1999. The Company Stock Plans are 
the only benefit plans of the Company or its Subsidiaries under which any       
securities of the Company or any of its Subsidiaries are issuable. No shares of 
Company Preferred Stock are outstanding. As of the date of this Agreement,      
except as set forth above no shares of capital stock or other voting securities 
of the Company or any Subsidiary were issued, reserved for issuance or          
outstanding. Except as set forth in this Section 3.2, there are no outstanding  
equity equivalents or interests in the ownership or earnings of the Company or  
any Subsidiary and there are no options, warrants, calls, rights or agreements  
to which the Company or any of its Subsidiaries is a party or by which any of   
them is bound obligating the Company or any of its Subsidiaries to issue,       
deliver or sell, or cause to be issued, delivered or sold, additional shares of 
capital stock or voting securities of the Company or any of its Subsidiaries or 
obligating the                                                                  

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Company or any of its Subsidiaries to grant, extend or enter into any such      
option, warrant, call, right or agreement. Each outstanding share of capital    
stock of each Subsidiary of the Company that is a corporation is duly           
authorized, validly issued, fully paid and nonassessable and each such share is 
owned by the Company or another Subsidiary of the Company, free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,   
agreements, limitations on voting rights, charges and other encumbrances of any 
nature whatsoever ("Claims"). With respect to the Grays Ferry Cogeneration      
Partnership, which is the only Subsidiary of the Company which is a partnership 
(the "Partnership"), CogenAmerica Schuylkill, Inc. has good and valid title to  
the partnership interests owned by it in the Partnership, free and clear of all 
Claims. There are no outstanding (i) subscriptions or other rights to purchase  
or otherwise acquire any partnership interest in the Partnership, (ii)          
securities convertible into or exchangeable for any partnership interest in the 
Partnership, or (iii) obligations of the Partnership to issue, deliver or sell  
any partnership interest, voting securities or securities convertible into or   
exchangeable for partnership interests in the Partnership. Except for the       
Subsidiaries of the Company disclosed in the Company SEC Documents (as defined  
in Section 3.5 below), the Company does not own or control, directly or         
indirectly, any capital stock or other securities of, or have any ownership     
interest in, any Person. The Company does not have any outstanding bonds,       
debentures, notes or other obligations the holders of which have the right to   
vote (or convertible into or exercisable for securities having the right to     
vote) with the stockholders of the Company on any matter. Exhibit 21 to the     
Company's Annual Report on Form 10-K for the year ended December 31, 1998 (the  
"Company Annual Report"), as filed with the Securities and Exchange Commission  
("SEC"), is a true, accurate and correct statement in all material respects of  
all of the information as of December 31, 1998 required to be set forth therein 
by the regulations of the SEC.                                                  

     Section 3.3 Authority. On or prior to the date of this Agreement, the Board
of Directors of the Company has approved this Agreement in accordance with the  
DGCL, resolved to recommend the adoption of this Agreement by the Company's     
stockholders and directed that this Agreement be submitted to the Company's     
stockholders for adoption. The Company has all requisite corporate power and    
authority to enter into each Transaction Document to which it is a Party and,   
subject, in the case of the Merger, to approval by the stockholders of the      
Company, to consummate the Merger. The execution and delivery of this Agreement 
by the Company and the consummation by the Company of the transactions          
contemplated hereby have been duly authorized by all necessary corporate action 
on the part of the Company, subject to (x) approval of this Agreement by the    
stockholders of the Company and (y) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware. This Agreement has been duly   
executed and delivered by the Company and (assuming the valid authorization,    
execution and delivery of this Agreement by Parent and Sub and the validity and 
binding effect of the Agreement on Parent and Sub) constitutes the valid and    
binding obligation of the Company enforceable against the Company in accordance 
with its terms, except as the enforceability hereof may be limited by           
bankruptcy, insolvency, moratorium or other similar laws affecting the          
enforcement of creditors' rights generally and to judicial limitations on the   
enforcement of specific performance and other equitable remedies. The filing of 
the Proxy Statement with the SEC has been duly authorized by the Company's Board
of Directors.                                                                   

Section 3.4 Consents and Approvals; No Violation. Assuming that all   
consents, approvals, authorizations and other actions described in this Section 
3.4 have been obtained and all filings and obligations described in this Section
3.4 have been made, the execution and delivery of this Agreement does not, and  
the consummation of the                                                         

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transactions contemplated hereby and compliance with the provisions hereof will 
not, result in any violation of, or default (with or without notice or lapse of 
time, or both) under, or give to others a right of termination, cancellation or 
acceleration of any obligation or the loss of a material benefit under, or      
result in the creation of any Claim upon any of the properties or assets of the 
Company or any of its Subsidiaries under, any provision of (i) the Certificate  
of Incorporation or By-Laws of the Company, (ii) any provision of the comparable
charter or organization documents of any of the Company's Subsidiaries, (iii)   
any loan or credit agreement, note, bond, mortgage, indenture, lease or other   
agreement, instrument, permit, concession, franchise or license applicable to   
the Company or any of its Subsidiaries or (iv) any judgment, order, decree,     
statute, law, ordinance, rule or regulation applicable to the Company or any of 
its Subsidiaries or any of their respective properties or assets, other than, in
the case of clauses (ii), (iii) or (iv), any such violations, defaults, rights, 
liens, security interests, charges or encumbrances that, individually or in the 
aggregate, would not have a Material Adverse Effect on the Company, materially  
impair the ability of the Company to perform its obligations hereunder or       
prevent the consummation of any of the transactions contemplated hereby or      
thereby. No filing or registration with, or authorization, consent or approval  
of, any Governmental Entity is required by or with respect to the Company or any
of its Subsidiaries in connection with the execution and delivery of any        
Transaction Document to which it is a party or is necessary for the consummation
of the Transactions, except for (i) in connection, or in compliance, with the   
provisions of the HSR Act, the Securities Act and the Exchange Act, (ii) the    
filing of the Certificate of Merger with the Secretary of State of the State of 
Delaware and appropriate documents with the relevant authorities of other states
in which the Company or any of its Subsidiaries is qualified to do business,    
(iii) such filings, authorizations, notices, orders and approvals as may be     
required to obtain the Regulatory Approval, the State Takeover Approvals and in 
connection with the Applicable New Jersey Laws (collectively, the "Governmental 
Approvals") and (iv) such other consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not, 
individually or in the aggregate, have a Material Adverse Effect on the Company,
or materially impair the ability of the Company to perform its obligations      
hereunder or prevent the consummation of any of the transactions contemplated   
hereby.                                                                         

Section 3.5 SEC Documents and Other Reports.                          

   (a) The Company has filed all required documents with the SEC since April
30, 1996 pursuant to Sections 13(a) and 15(d) of the Exchange Act (the "Company 
SEC Documents"). As of their respective dates, the Company SEC Documents        
complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and, at the respective times they were    
filed, none of the Company SEC Documents contained any untrue statement of a    
material fact or omitted to state a material fact required to be stated therein 
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The consolidated financial statements     
(including, in each case, any notes thereto) of the Company included in the     
Company SEC Documents (the "Financial Statements") complied as to form in all   
material respects with applicable accounting requirements and the published     
rules and regulations of the SEC with respect thereto, were prepared in         
accordance with generally accepted accounting principles (except, in the case of
the unaudited statements, as permitted by Form 10-Q of the SEC) applied on a    
consistent basis during the periods involved (except as may be indicated therein
or in the notes thereto), are in accordance with the books and records of the   
Company and fairly presented in all material respects                           

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the consolidated financial position of the Company and its consolidated         
Subsidiaries as at the respective dates thereof and the consolidated results of 
their operations and their consolidated cash flows for the periods then ended   
(subject, in the case of unaudited statements, to normal year-end audit         
adjustments and to any other adjustments described therein). Except as disclosed
in the Company SEC Documents or as required by generally accepted accounting    
principles, the Company has not, since December 31, 1998, made any change in the
accounting practices or policies applied in the preparation of financial        
statements. Except as and to the extent set forth in the Company Annual Report, 
neither the Company nor any of its Subsidiaries had as of December 31, 1998 any 
liabilities or obligations of any nature, whether or not accrued, contingent or 
otherwise, that would be required by generally accepted accounting principles to
be reflected on the consolidated balance sheet of the Company and its           
Subsidiaries (including the notes thereto) included in the Financial Statements 
that are not so reflected.                                                      

(b) The Company has provided to Parent true and complete copies of the
financial statements for its Subsidiaries described in Section 3.5 of the       
Company Letter (the "Project Financial Statements"). The Project Financial      
Statements have been prepared in accordance with generally accepted accounting  
principles applied on a consistent basis during the periods involved (except as 
may be indicated therein or in the notes thereto), are in accordance with the   
books and records of the relevant Subsidiary, and fairly present, in all        
material respects, the financial position of such Subsidiary as at the          
respective dates thereof and the results of its operations and its cash flows   
for the periods then ended.                                                     

     Section 3.6 Information Supplied. Each document required to be filed by the
Company with the SEC in connection with the transactions contemplated by this   
Agreement, including, without limitation, the Proxy Statement and the Schedule  
13e-3, and any amendments or supplements thereto will comply in all material    
respects with the provisions of the Exchange Act. Neither the Proxy Statement   
(other than with respect to information contained in the Proxy Statement        
provided to the Company by Parent for inclusion in the Proxy Statement) nor any 
of the information supplied by the Company for inclusion or incorporation by    
reference in the Schedule 13e-3, together with any amendments or supplements    
thereto, will (i) in the case of the Proxy Statement, at the time of the mailing
of the Proxy Statement and at the time of the Stockholder Meeting contain any   
untrue statement of a material fact or omit to state any material fact required 
to be stated therein or necessary in order to make the statements therein, in   
light of the circumstances under which they are made, not misleading, and (ii)  
in the case of information supplied by the Company for inclusion or             
incorporation by reference in the Schedule 13e-3, at the time of its filing, at 
the time of the dissemination of the Schedule 13e-3 and until the Effective     
Time, contain any untrue statement of a material fact or omit to state any      
material fact required to be stated therein or necessary in order to make the   
statements therein not misleading.                                              

  Section 3.7 Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Documents filed with the SEC prior to the date of this          
Agreement, since December 31, 1998 to the date hereof, (A) the Company and its  
Subsidiaries have not incurred any material liability or obligation (indirect,  
direct or contingent), or entered into any material oral or written agreement or
other transaction, that is not in the ordinary course of business or that would 
result in a Material Adverse Effect on the Company, (B) there has been no change
in the capital stock of the Company except for the issuance of shares of the    
Company Common Stock pursuant to the exercise of Company Stock Options and no   
dividend or distribution of any kind declared, paid or made by the              

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Company on any class of its stock, (C) there has not been (x) any granting by   
the Company or any of its Subsidiaries to any executive officer of the Company  
or any of its Subsidiaries of any increase in compensation, except in the       
ordinary course of business consistent with prior practice or as was required   
under employment agreements in effect as of the date of the most recent audited 
financial statements included in the Company SEC Documents, (y) any granting by 
the Company or any of its Subsidiaries to any such executive officer of any     
increase in severance or termination agreements in effect as of the date of the 
most recent audited financial statements included in the Company SEC Documents  
or (z) any entry by the Company or any of its Subsidiaries into any employment, 
deferred compensation, severance or termination agreement with any such         
executive officer, and (D) there has been no event causing a Material Adverse   
Effect on the Company, nor any development that would, individually or in the   
aggregate, result in a Material Adverse Effect on the Company.                  

Section 3.8 Permits and Compliance. Each of the Company and its       
Subsidiaries is in possession of all franchises, grants, authorizations,        
licenses, permits, easements, variances, exceptions, consents, certificates,    
approvals and orders of any Governmental Entity necessary for the Company or any
of its Subsidiaries to own, lease and operate its properties or to carry on its 
business as it is now being conducted (the "Company Permits"), except where the 
failure to have any of the Company Permits would not, individually or in the    
aggregate, have a Material Adverse Effect on the Company, and as of the date of 
this Agreement no suspension or cancellation of any of the Company Permits is   
pending or, to the Knowledge of the Company (as hereinafter defined),           
threatened, except where the suspension or cancellation of any of the Company   
Permits would not, individually or in the aggregate, have a Material Adverse    
Effect on the Company. Neither the Company nor any of its Subsidiaries is in    
violation of (A) its Certificate of Incorporation, by-laws or other             
organizational documents, (B) any applicable law, ordinance, administrative or  
governmental rule or regulation or (C) any order, decree or judgment of any     
Governmental Entity having jurisdiction over the Company or any of its          
Subsidiaries, except, in the case of clauses (B) and (C), for any violations    
that, individually or in the aggregate, would not have a Material Adverse Effect
on the Company. Except as disclosed in the Company SEC Documents filed prior to 
the date of this Agreement, as of the date of this Agreement none of the Company
or any of its Subsidiaries is a party to any Material Contract. For purposes of 
this Agreement, "Material Contract" shall mean any contract or agreement filed  
as an exhibit to the Company SEC Documents or any other contract or agreement   
that is material to the business, properties, assets, liabilities, condition    
(financial or otherwise) or results of operations of the Company and its        
Subsidiaries, taken as a whole. Except as set forth in the Company SEC Documents
filed prior to the date of this Agreement, no event of default or event that,   
but for the giving of notice or the lapse of time or both, would constitute an  
event of default exists or, upon the consummation by the Company of the         
transactions contemplated by this Agreement, will exist under any indenture,    
mortgage, loan agreement, note or other agreement or instrument for borrowed    
money, any guarantee of any agreement or instrument for borrowed money, or any  
lease, contractual license or other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any such       
Subsidiary is bound or to which any of the properties, assets or operations of  
the Company or any such Subsidiary is subject, other than any defaults that,    
individually or in the aggregate, would not have a Material Adverse Effect on   
the Company. All Material Contracts (other than the Affiliate Arrangements (as  
defined in Section 3.21 below) which will be terminated at the Effective Time)  
to which the Company or any of its Subsidiaries is a party are in full force and
effect and are the                                                              

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valid and binding obligations of the Company or the applicable Subsidiary,      
enforceable in accordance with their respective terms, subject to bankruptcy,   
insolvency, moratorium or other similar laws affecting the enforcement of       
creditors' rights generally and to judicial limitations on the enforcement of   
specific performance and other equitable remedies. The Company has made         
available or delivered to Parent true and complete copies of the Material       
Contracts and all other documents referred to in the Company Letter, in each    
case as amended to the date of this Agreement. As of the date of this Agreement,
set forth in Section 3.8 of the Company Letter is a description of any material 
changes to the amount and terms of the indebtedness of the Company and its      
Subsidiaries as described in the Company Annual Report. For purposes of this    
Agreement, "Knowledge of the Company" means the actual knowledge of the         
executive officers of the Company after due inquiry.                            

    Section 3.9 Tax Matters. (i) The Company and each of its Subsidiaries have
timely filed all federal, and all material state, local, foreign and provincial,
Tax Returns required to have been filed or appropriate extensions therefor have 
been properly obtained, and such Tax Returns are correct and complete, except to
the extent that any failure to so file or any failure to be correct and complete
would not, individually or in the aggregate, have a Material Adverse Effect on  
the Company; (ii) all Taxes shown to be due on such Tax Returns have been timely
paid, taking into account extensions for payment that have been properly        
obtained, or such Taxes are being timely and properly contested which contests  
as of the date of this Agreement have been disclosed in Section 3.9 of the      
Company Letter; (iii) the Company and each of its Subsidiaries have complied in 
all material respects with all rules and regulations relating to the withholding
of Taxes except to the extent that any failure to comply with such rules and    
regulations would not, individually or in the aggregate, have a Material Adverse
Effect on the Company; (iv) neither the Company nor any of its Subsidiaries has 
waived any statute of limitations in respect of its Taxes; (v) any Tax Returns  
referred to in clause (i) relating to federal and state income Taxes have been  
examined by the IRS or the appropriate state taxing authority or the period for 
assessment of the Taxes in respect of which such Tax Returns were required to be
filed has expired; (vi) no material issues that have been raised in writing by  
the relevant taxing authority in connection with the examination of the Tax     
Returns referred to in clause (i) are currently pending and each such           
examination has been completed; (vii) all deficiencies asserted or assessments  
made as a result of any examination of such Tax Returns by any taxing authority 
have been paid in full or are being timely and properly contested which contests
as of the date of this Agreement have been disclosed in Section 3.9 of the      
Company Letter; and (viii) no withholding is required under Section 1445 of the 
Code in connection with the Merger; (ix) neither the Company nor any of its     
Subsidiaries is party to or bound by any tax-sharing agreement, tax indemnity   
obligation or similar agreement, arrangement or practice with respect to Taxes  
(including any advance pricing agreement, closing agreement or other agreement  
relating to Taxes with any taxing authority); (x) neither the Company nor any of
its Subsidiaries nor any affiliated group that includes any of them shall be    
required to include in a taxable period ending after the Closing Date any       
material amount of taxable income attributable to income that accrued in a prior
taxable period but was not recognized in any prior taxable period as a result of
the installment method of accounting, the long-term contract method of          
accounting, the cash method of accounting or Section 481 of the Code or any     
comparable provision of state, local, or foreign Tax law, or for any other      
reason; (xi) neither the Company nor any of its Subsidiaries has made any       
consent under Section 341 of the Code, no property of the Company or of any of  
its Subsidiaries is "tax exempt use property" within the meaning of Section     
168(h) of the Code, neither the Company nor any of its Subsidiaries is a party  
to any lease made                                                               

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pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954 and none of  
the assets of the Company or of any of its Subsidiaries is subject to a lease   
under Section 7701(h) of the Code or under any predecessor section thereof;     
(xii) neither the Company nor any of its Subsidiaries has requested any         
extension of time within which to file any Tax return, which return has not yet 
been filed; and (xiii) no power of attorney with respect to any Taxes has been  
executed or filed with any taxing authority by or on behalf of the Company or   
any of its Subsidiaries. The Company has delivered or made available to Parent  
for inspection (A) true and complete copies of all material Tax returns of the  
Company and any affiliated group of which the Company is a member and of any of 
the Company's Subsidiaries relating to Taxes for all taxable periods for which  
the applicable statute of limitations has not yet expired and (B) complete and  
correct copies of all material private letter rulings, revenue agent reports,   
information document requests, notices of proposed deficiencies, deficiency     
notices, protests, petitions, closing agreements, settlement agreements, pending
ruling requests and any similar documents, submitted by, received by or agreed  
to by or on behalf of the Company or any such group or Subsidiary, or, to the   
extent related to the income, business, assets, operations, activities or status
of the Company or any such group or Subsidiary, submitted by, received by or    
agreed to by or on behalf of any affiliated group of which the Company is or has
ever been a member, and relating to Taxes for all taxable periods for which the 
statute of limitations has not yet expired. No material liens exist for Taxes   
(other than liens for Taxes not yet due and payable) with respect to any of the 
assets or properties of the Company or any of its Subsidiaries. The Federal     
income Tax returns of the Company and its Subsidiaries and any affiliated group 
that includes any of them have expressly disclosed any Tax positions of the     
Company, such Subsidiaries or such group that, if not disclosed, could give rise
to material penalties under Section 6662 of the Code. For purposes of this      
Agreement: (i) "Taxes" means any federal, state, local, foreign or provincial   
income, gross receipts, property, sales, use, license, excise, franchise,       
employment, payroll, withholding, alternative or added minimum, ad valorem,     
value-added, transfer or excise tax, or other tax, custom, duty, governmental   
fee or other like assessment or charge of any kind whatsoever, together with any
interest or penalty imposed by any Governmental Entity, and (ii) "Tax Return"   
means any return, report or similar statement (including the attached schedules)
required to be filed with respect to any Tax, including, without limitation, any
information return, claim for refund, amended return or declaration of estimated
Tax.                                                                            

  Section 3.10 Actions and Proceedings. Except as set forth in the Company
SEC Documents filed prior to the date of this Agreement, there are, as of the   
date of this Agreement, no outstanding orders, judgments, injunctions, awards or
decrees of any Governmental Entity against or involving (i) the Company or any  
of its Subsidiaries, (ii) to the Knowledge of the Company, any of the present or
former directors, officers, employees, consultants, agents or stockholders of   
the Company or any of its Subsidiaries, as such, (iii) any of the properties,   
assets or businesses of the Company or any of its Subsidiaries or (iv) any      
Company Plan (as hereinafter defined) that, individually or in the aggregate,   
would have a Material Adverse Effect on the Company or materially impair the    
ability of the Company to perform its obligations hereunder. As of the date of  
this Agreement, there are no actions, suits or claims or legal, administrative  
or arbitrative proceedings or investigations pending or, to the Knowledge of the
Company, threatened against or involving (i) the Company or any of its          
Subsidiaries, (ii) to the Knowledge of the Company, any of its or their present 
or former directors, officers, employees, consultants, agents or stockholders,  
as such, (iii) any of the properties, assets or businesses of the Company or any
of its Subsidiaries or (iv) any Company Plan (as hereinafter defined) that,     
individually or in the aggregate, would have a Material Adverse Effect on       

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the Company or materially impair the ability of the Company to perform its      
obligations hereunder. As of the date hereof, there are no actions, suits, labor
disputes or other litigation, legal or administrative proceedings or            
governmental investigations pending or, to the Knowledge of the Company,        
threatened against or affecting (i) the Company or any of its Subsidiaries, (ii)
to the Knowledge of the Company, any of its or their present or former officers,
directors, employees, consultants, agents or stockholders, as such, (iii) any of
the properties, assets or businesses of the Company or any of its Subsidiaries  
or (iv) any Company Plan, in each case relating to the transactions contemplated
by this Agreement. The Company is not in default with respect to any material   
final judgment, order or decree of any court or any governmental agency or      
instrumentality.                                                                

     Section 3.11 Certain Agreements. Except as set forth in Section 3.11 of the
Company Letter or as provided pursuant to Section 1.7(d) hereof, neither the    
Company nor any of its Subsidiaries is a party to any oral or written agreement 
or plan, including any employment agreement, severance agreement, stock option  
plan, stock appreciation rights plan, restricted stock plan or stock purchase   
plan, any of the benefits of which will be increased, or the vesting of the     
benefits of which will be accelerated, by the occurrence of any of the          
transactions contemplated by this Agreement or the value of any of the benefits 
of which will be calculated on the basis of any of the transactions contemplated
by this Agreement. No holder of any option to purchase shares of Company Common 
Stock, or shares of Company Common Stock granted in connection with the         
performance of services for the Company or its Subsidiaries, is or will be      
entitled to receive cash from the Company or any Subsidiary in lieu of or in    
exchange for such option or shares as a result of the transactions contemplated 
by this Agreement, other than as provided in Section 1.5(d).                    

Section 3.12 ERISA                                                    

    (a) Company Plans. Each Company Plan (as hereinafter defined) is listed in
Section 3.12(a) of the Company Letter. Except as would not have a Material      
Adverse Effect on the Company, each Company Plan complies in all respects with  
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the  
Code and all other applicable statutes and governmental rules and regulations,  
and (i) no "reportable event" (within the meaning of Section 4043 of ERISA) has 
occurred with respect to any Company Plan that is likely to have individually or
in the aggregate, a Material Adverse Effect on the Company, and (ii) no action  
has been taken, or is currently being considered, to terminate any Company Plan 
subject to Title IV of ERISA. No Company Plan, nor any trust created thereunder,
has incurred any "accumulated funding deficiency" (as defined in Section 412 of 
the Code or Section 302 of ERISA), whether or not waived.                       

(b) Plan Liabilities. With respect to the Company Plans, no event has 
occurred and, to the Knowledge of the Company, there exists no condition or set 
of circumstances in connection with which the Company or any ERISA Affiliate or 
Company Plan fiduciary could be subject to any liability under the terms of such
Company Plans, ERISA, the Code or any other applicable law, other than          
liabilities for benefits payable in the normal course, which would have a       
Material Adverse Effect on the Company. All Company Plans that are intended to  
be qualified under Section 401(a) of the Code have been determined by the IRS to
be so qualified, or a timely application for such determination is now pending  
or a request for such a determination filed within the remedial amendment period
of Section 401(b) of the Code is pending, and the Company is not aware of any   
reason why any such Company Plan is not so qualified in operation. Neither the  
Company nor any entity which is treated as a single employer along with the     
Company under                                                                   

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Section 414(b), (c), (m) or (o) of the Code maintains or contributes to, or has 
ever maintained or contributed to, or been required to contribute to or has     
otherwise incurred any liability with respect to a "multiemployer plan" within  
the meaning of Section 3(37) of ERISA or any plan subject to Title IV of ERISA. 
Except as disclosed in Section 3.12(b) of the Company Letter, neither the       
Company nor any of its ERISA Affiliates has any liability or obligation under   
any welfare plan to provide benefits after termination of employment to any     
employee or dependent other than as required by Section 4980B of the Code.      

    (c) Definitions. As used herein, (i) "Company Plan" means a "pension plan"
(as defined in Section 3(2) of ERISA), a "welfare plan" (as defined in Section  
3(1) of ERISA), or any bonus, profit sharing, deferred compensation, incentive  
compensation, stock ownership, stock purchase, stock option, phantom stock,     
holiday pay, vacation, severance, death benefit, sick leave, fringe benefit,    
personnel policy, insurance or other plan, arrangement or understanding, in each
case established or maintained by the Company or any of its ERISA Affiliates or 
as to which the Company or any of its ERISA Affiliates has contributed or       
otherwise may have any liability, and (iii) "ERISA Affiliate" means any         
corporation or trade or business controlled by, controlling or under common     
control with the Company within the meaning of Section 414 of the Code or       
Section 4001(a)(14) or 4001(b) of ERISA.                                        

     (d) Employment Agreements. Section 3.12(d) of the Company Letter contains a
true and complete list of all (i) severance and employment agreements with the  
current and former directors, officers, employees, independent contractors and  
consultants of the Company and each ERISA Affiliate containing any obligation or
liability on or after the date of this Agreement, (ii) severance programs and   
policies of the Company and each ERISA Affiliate with or relating to its current
and former directors, officers, employees, independent contractors and          
consultants containing any obligation or liability on or after the date of this 
Agreement, and (iii) plans, programs, agreements and other arrangements of the  
Company and each ERISA Affiliate with or relating to its current and former     
directors, officers, employees, independent contractors and consultants         
containing change of control, acceleration of the time of payment or vesting of 
benefits or similar provisions currently in effect (collectively, the "Employee 
Agreements").                                                                   

Section 3.13 Compliance with Worker Safety and Environmental Laws. The
properties, assets and operations of the Company and its Subsidiaries are in    
compliance with all applicable federal, state, local and foreign laws, rules and
regulations, orders, decrees, judgments, permits and licenses relating to public
and worker health and safety (collectively, "Worker Safety Laws") and the       
protection and clean-up of the environment and activities or conditions related 
thereto, including, without limitation, those relating to the generation,       
handling, disposal, transportation or release of hazardous materials            
(collectively, "Environmental Laws"), except for any violations that,           
individually or in the aggregate, would not have a Material Adverse Effect on   
the Company. With respect to such properties, assets and operations, including  
any previously owned, leased or operated properties, assets or operations, there
are no events, conditions, circumstances, activities, practices, incidents,     
actions or plans of the Company or any of its Subsidiaries that may interfere   
with or prevent compliance or continued compliance with applicable Worker Safety
Laws and Environmental Laws, other than any such interference or prevention as  
would not, individually or in the aggregate with any such other interference or 
prevention, have a Material Adverse Effect on the Company. None of the Company  
or any of its Subsidiaries has received or is aware of any claim or notice of   
violations of any applicable                                                    

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Environmental Laws or Worker Safety Laws other than such claims or violations as
would not individually or in the aggregate have a Material Adverse Effect on the
Company.                                                                        

     Section 3.14 Labor Matters. Neither the Company nor any of its Subsidiaries
is a party to any collective bargaining agreement or labor contract. Neither the
Company nor any of its Subsidiaries has engaged in any unfair labor practice    
with respect to any Persons employed by or otherwise performing services        
primarily for the Company or any of its Subsidiaries (the "Company Business     
Personnel"), and there is no unfair labor practice complaint or grievance       
against the Company or any of its Subsidiaries by the National Labor Relations  
Board or any comparable state agency pending or threatened in writing with      
respect to the Company Business Personnel, except where such unfair labor       
practice, complaint or grievance would not have a Material Adverse Effect on the
Company. There is no labor strike, dispute, slowdown or stoppage pending or, to 
the Knowledge of the Company, threatened against or affecting the Company or any
of its Subsidiaries which may interfere with the respective business activities 
of the Company or any of its Subsidiaries, except where such dispute, strike or 
work stoppage would not have a Material Adverse Effect on the Company.          

Section 3.15 State Takeover Statute. Section 203 of the DGCL is not   
applicable to the Transactions.                                                 

     Section 3.16 Required Vote of Company Stockholders. The affirmative vote of
the holders of two-thirds of the outstanding shares of Company Common Stock is  
required to approve the Merger. No other vote of the security holders of the    
Company is required by law, the Certificate of Incorporation or By-laws of the  
Company or otherwise in order for the Company to consummate the Transactions.   

   Section 3.17 Brokers. No broker, investment banker or other Person, other
than Donaldson, Lufkin & Jenrette Securities Corporation (the "Financial        
Advisor"), is entitled to any broker's, finder's or other similar fee or        
commission in connection with the transactions contemplated by this Agreement   
based upon arrangements made by or on behalf of the Company. The Company has    
furnished Parent a true and correct copy of the engagement agreement with the   
Financial Advisor.                                                              

 Section 3.18 Opinion of Financial Advisor. The Company has received the
opinion of the Financial Advisor addressed to the Company's Board of Directors, 
dated the date of this Agreement, to the effect that, as of such date, the      
consideration to be received in the Merger by the holders of the shares of      
Company Common Stock is fair from a financial point of view to the Company's    
stockholders, other than NRG Energy, Inc. A signed copy of such opinion has been
delivered to Parent.                                                            

Section 3.19 Utility Regulation. None of the Company or any of its    
Subsidiaries is (i) subject to regulation under the Public Utility Holding      
Company Act of 1935 ("PUHCA") (other than any such regulation contemplated by   
Section 9(a)(2), 32 or 33 of PUHCA), (ii) subject to regulation as an "electric 
utility" or a "public utility" as such terms are defined in the Federal Power   
Act (other than as contemplated by 18 C.F.R. sec. 292.601(c) or Section 32 or 33
of PUHCA), or (iii) subject to regulation by any state respecting the rates of  
electric utilities or the financial and organizational regulation of electric   
utilities as those terms are used in Section 210(e) of the Public Utility       
Regulatory Policies Act of 1978 ("PURPA"), except with respect to participation 
in, or ownership of, an "exempt wholesale generator" as such term is defined in 
Section 32 of PUHCA. Not more than 50% of the ultimate ownership of the projects
operated by the Subsidiaries is                                                 

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held by Persons primarily engaged in the generation or sale of electric power   
(other than electric power solely from qualifying cogeneration facilities,      
qualifying small power production facilities, exempt wholesale generators or    
foreign utilities companies (as defined in Section 33 of PUHCA)) within the     
meaning of the Federal Power Act. Each such project has self-certified itself to
be in compliance with such requirements without objection by FERC or FERC has   
issued a final order stating that each such project is a facility which complies
with the definition of "cogeneration facility" as set forth in 18 C.F.R. sec.   
292.202(c) and which meets all of the requirements for qualification set forth  
in 18 C.F.R. sec. 292.203(b).                                                   

    Section 3.20 Insurance. Section 3.20 of the Company Letter contains a true
and complete list of all material insurance policies held by the Company or any 
of its Subsidiaries. All such policies are in full force and effect and all     
related premiums have been paid to date. As of the date of this Agreement, there
are no pending or, to the Knowledge of the Company, threatened disputes or      
communications with or from any insurance carrier denying or disputing any claim
or regarding cancellation or non-renewal of any such policy which if determined 
adversely to the Company, would have a Material Adverse Effect on the Company.  

Section 3.21 Related Party Transactions. No director or officer of the
Company or any of its Subsidiaries or any Person which as of the date of this   
Agreement has a Schedule 13D or 13G on file with the Securities and Exchange    
Commission with respect to the Company Common Stock (each such Person, a        
"Significant Holder"), or any member of the immediate family of any such        
director, officer, Significant Holder or any Person in which any such director, 
officer, Significant Holder, or any member of the immediate family of any such  
director or officer, is an officer, director, trustee, partner or holder of more
than 50% of the outstanding capital stock or equity interests, is a party to any
material executory transaction with the Company or any of its Subsidiaries.     
There are not loans, guarantees, letters of credit or other forms of credit     
support provided by or on behalf of any director or officer of the Company or   
any of its Subsidiaries to or in favor of the Company or any of its             
Subsidiaries. For purposes of this Agreement, "Affiliate Arrangements" shall    
mean the arrangements identified on Section 3.21 of the Company Letter that will
terminate at the Effective Time.                                                

ARTICLE IV
COVENANTS OF THE COMPANY

 Section 4.1 Conduct of Business Pending the Merger. Except as expressly
permitted by clauses (i) through (xvi) of this Section 4.1 or as set forth in   
the Company Letter, during the period from the date of this Agreement through   
the Effective Time, the Company shall, and shall cause each of its Subsidiaries 
to carry on its business in the ordinary course of its business as currently    
conducted and, to the extent consistent therewith, use best efforts to preserve 
intact its current business organizations, keep available the services of its   
current officers and employees and preserve its relationships with customers,   
suppliers and others having business dealings with it to the end that its       
goodwill and ongoing business shall be unimpaired at the Effective Time. Without
limiting the generality of the foregoing, and except as otherwise expressly     
contemplated by this Agreement or as set forth in the Company Letter, the       
Company shall not, and shall not                                                

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permit any of its Subsidiaries to, without the prior written consent of Parent  
(which consent shall not be unreasonably withheld or delayed):                  

         (i) (A) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions in respect of, any of its
    capital stock, or otherwise make any payments to its stockholders in their
capacity as such (other than dividends and other distributions by     
     Subsidiaries), (B) split, combine or reclassify any of its capital stock or
   issue or authorize the issuance of any other securities in respect of, in
     lieu of or in substitution for shares of its capital stock or (C) purchase,
   redeem or otherwise acquire any shares of capital stock of the Company or
     any of its Subsidiaries or any other interests or securities thereof or any
   rights, warrants or options to acquire any such shares or other interests
or securities;                                                        

       (ii) issue, deliver, sell, pledge, dispose of or otherwise encumber
    any shares of its capital stock or partnership interests, any other voting
    securities or equity equivalent or any securities convertible into, or any
     rights, warrants or options to acquire any such shares or interests, voting
 securities, equity equivalent or convertible securities, other than the
 issuance of shares of Company Common Stock upon the exercise of Company
    Stock Options outstanding on the date of this Agreement in accordance with
their current terms.                                                  

       (iii) amend its Certificate of Incorporation or charter or By-Laws;

         (iv) acquire or agree to acquire by merging or consolidating with, or
  by purchasing a substantial portion of the assets of or equity in, or by
any other manner, any business or any corporation, limited liability  
company, partnership, association or other business organization or   
     division thereof or otherwise acquire or agree to acquire any assets, other
  than transactions that are in the ordinary course of business consistent
 with past practice and that have a transaction value less than $250,000
     individually or $1,000,000 in the aggregate and not material to the Company
and its Subsidiaries taken as a whole;                                

       (v) sell, lease or otherwise dispose of, or agree to sell, lease or
   otherwise dispose of, any of its assets, other than transactions that are
   in the ordinary course of business consistent with past practice and that
   have a transaction value less than $250,000 individually or $1,000,000 in
the aggregate;                                                        

      (vi) incur any indebtedness for borrowed money, guarantee any such
  indebtedness or make any loans, advances or capital contributions to, or
     other investments in, any other Person, other than (A) any such obligations
    incurred in the ordinary course of business consistent with past practices
 and that are less than $500,000 in the aggregate, and (B) indebtedness,
    loans, advances, capital contributions and investments between the Company
and any of its Subsidiaries or between any of such Subsidiaries;      

(vii) alter (through merger, liquidation, reorganization,   
     restructuring or in any other fashion) the corporate structure or ownership
of the Company or of any of its Subsidiaries;                         

          (viii) enter into or adopt any, or amend any existing, severance plan,
agreement or arrangement or enter into or amend any Company Plan or   
     employment or consulting agreement, except in the case of any amendments to
     any Company Plan, for any immaterial changes as required by applicable law;

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      (ix) increase the compensation payable or to become payable to its
   current or former directors, officers, employees, independent contractors
    or consultants or grant any severance or termination pay to, or enter into
    or amend any employment or severance agreement with, any current or former
  director, officer, employee, independent contractor or consultant of the
  Company or any of its Subsidiaries, or establish, adopt, enter into, or,
except in the case of any amendments to any Company Plan, for any     
    immaterial changes as may be required to comply with applicable law, amend
   in any material respect or take action to enhance in any material respect
   or accelerate the payment or vesting of any rights or benefits under, any
    labor, collective bargaining, bonus, profit sharing, thrift, compensation,
     stock option, restricted stock, pension, retirement, deferred compensation,
   employment, termination, severance or other plan, agreement, trust, fund,
   policy or arrangement for the benefit of any director, officer, employee,
consultant or independent contractor;                                 

         (x) violate or fail to perform any obligation or duty imposed upon it
 or any of its Subsidiaries by any applicable material federal, state or
local law, rule, regulation, guideline or ordinance;                  

         (xi) make any change to accounting policies or procedures (other than
    actions required to be taken by generally accepted accounting principles);

        (xii) prepare or file any Tax Return inconsistent with past practice
    or, on any such Tax Return, take any position, make any election, or adopt
 any method that is inconsistent with positions taken, elections made or
   methods used in preparing or filing similar Tax Returns in prior periods;

     (xiii) make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability;                

      (xiv) enter into any contract which involves aggregate payments in
    excess of $250,000 for individual contracts or $1,000,000 in the aggregate
for all contracts or amend, terminate, renew or waive any rights of   
  material value under, any Material Contract of the Company or any of its
     Subsidiaries; or other than as described in Section 4.1(xiv) of the Company
   Letter, make or agree to make any new capital expenditure or expenditures
in excess of $250,000 individually or $500,000 in the aggregate;      

         (xv) pay, discharge or satisfy any claims, liabilities or obligations
     (absolute, accrued, asserted or unasserted, contingent or otherwise), other
    than (a) the payment, discharge or satisfaction, in the ordinary course of
   business consistent with past practice or in accordance with their terms,
  of liabilities reflected or reserved against in, or contemplated by, the
most recent financial statements (or the notes thereto) of the Company
     included in the Company SEC Documents or incurred in the ordinary course of
 business consistent with past practice or (b) payments of principal and
     interest and related fees on indebtedness owed by the Company or any of its
Subsidiaries under existing revolving credit facilities and scheduled 
payments of principal and interest and related fees on any other      
indebtedness owed by the Company or any of its Subsidiaries under any 
existing credit facility;                                             

   (xvi) take any write-down of the value of any asset or take any
write-off as uncollectible of any accounts or notes receivable or any 
portion thereof, except to the extent such write-down or write-off is 
required by generally accepted accounting                             

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   principles or is consistent with the historic accounting policies adhered
to by the Company or its Subsidiaries, as applicable; or              

       (xvii) authorize, recommend, propose or announce an intention to do
    any of the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.                               

Section 4.2 No Solicitation                                           

   (a) Takeover Proposals. The Company shall not, nor shall it permit any of
its Subsidiaries to, nor shall it authorize or permit any officer, director or  
employee of or any financial advisor, attorney or other advisor or              
representative of, the Company or any of its Subsidiaries to, (i) solicit,      
initiate or encourage the submission of, any Takeover Proposal (as hereafter    
defined), (ii) enter into any agreement with respect to any Takeover Proposal or
(iii) participate in any discussions or negotiations regarding, or furnish to   
any Person any information with respect to, or take any other action to         
facilitate any inquiries or the making of any proposal that constitutes, or may 
reasonably be expected to lead to, any Takeover Proposal; provided, however,    
that, if the Board of Directors of the Company reasonably determines the        
Takeover Proposal constitutes a Superior Proposal (as defined below), then, to  
the extent required by the fiduciary obligations of the Board of Directors of   
the Company, as determined in good faith by a majority of the disinterested     
members thereof after receiving the advice of independent legal counsel, the    
Company may, in response to an unsolicited request therefor, furnish information
with respect to the Company to, and enter into discussions with, any Person that
has made such Takeover Proposal pursuant to a customary confidentiality         
agreement. For purposes of this Agreement, (i) "Takeover Proposal" means any    
proposal for, offer or indication of interest in a merger or other business     
combination involving the Company or any of its Subsidiaries or any proposal or 
offer to acquire in any manner, directly or indirectly, a substantial equity    
interest in, a substantial portion of the voting securities of, or a substantial
portion of the assets of the Company or any of its Subsidiaries, other than the 
transactions contemplated by this Agreement, and (ii) "Superior Proposal" means 
a bona fide Takeover Proposal made by a third party which a majority of the     
disinterested members of the Board of Directors of the Company determines in its
reasonable good faith judgment to be more favorable to the Company's            
stockholders than the Merger (after receiving the opinion, with only customary  
qualifications, of the Company's independent financial advisor of nationally    
recognized reputation that the value of the consideration provided for in such  
proposal exceeds the value of the consideration provided for in the Merger) and 
for which financing, to the extent required, is then committed or which, in the 
reasonable good faith judgment of a majority of such disinterested members      
(after receiving the advice of the Company's independent financial advisor), is 
highly likely to be financed by such third party.                               

     (b) Recommendation of the Board of Directors. Except as expressly permitted
by this Section 4.2, neither the Board of Directors of the Company nor any      
committee thereof shall (i) withdraw or modify, or propose to withdraw or       
modify, in a manner adverse to Parent or Sub, the approval or recommendation by 
such Board of Directors or any such committee of the Merger or (ii) approve or  
recommend, propose to approve or recommend, or cause the Company to enter into  
any letter of intent, agreement in principle or legally binding acquisition     
agreement (the "Company Acquisition Agreement") relating to any Takeover        
Proposal. Notwithstanding the foregoing, if the Company has received a Superior 
Proposal, the Board of Directors of the Company may (subject to this and the    
following sentences) terminate this Agreement, but only at a time               

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that is more than four (4) business days following Parent's receipt of written  
notice advising Parent that the Company's Board of Directors is prepared to     
accept such Superior Proposal, specifying the material terms and conditions of  
such Superior Proposal and identifying the Person making such Superior Proposal;
provided, however, that (x) at the time of such termination, such proposal      
continues to be a Superior Proposal, taking into account any amendment of the   
terms of the Merger by Parent or any proposal by Parent to amend the terms of   
this Agreement, the Merger or any other Takeover Proposal made by Parent (a "New
Parent Proposal"), and (y) concurrently with or immediately after such          
termination, the Company's Board of Directors shall cause the Company to enter  
into a definitive agreement with respect to such Superior Proposal.             

 (c) Notice of Takeover Proposal. The Company shall advise Parent orally
(within one business day) and in writing (as promptly as practicable) of (i) any
Takeover Proposal or any inquiry with respect to or which could lead to any     
Takeover Proposal, (ii) the material terms of such Takeover Proposal and (iii)  
the identity of the Person making any such Takeover Proposal or inquiry. The    
Company will keep Parent fully informed of the status and details of any such   
Takeover Proposal or inquiry.                                                   

   (d) Permitted Actions or Disclosures by the Company. Nothing contained in
this Section 4.2 shall prohibit the Company from taking and disclosing to its   
stockholders a position contemplated by Rule 14e-2(a) promulgated under the     
Exchange Act or from making any disclosure to the Company's stockholders if, in 
the good faith judgment of the Board of Directors of the Company, after         
consultation with independent counsel, failure so to disclose would be          
inconsistent with its obligations under applicable law; provided, however, that,
except as expressly provided in this Section 4.2, neither the Company nor its   
Board nor any committee thereof shall withdraw or modify, or propose publicly to
withdraw or modify, its position with respect to this Agreement or in connection
with the Merger, or approve or recommend, or propose publicly to approve or     
recommend, a Takeover Proposal.                                                 

ARTICLE V 
ADDITIONAL AGREEMENTS 

   Section 5.1 Stockholder Meeting. The Company will, as soon as practicable
following the date of this Agreement, duly call, give notice of, convene and    
hold a stockholder meeting (the "Stockholder Meeting") for the purpose of       
considering the approval of this Agreement and the transactions contemplated    
hereby. The Company has, through its Board of Directors, recommended to its     
stockholders the adoption or approval of this Agreement, the Merger and the     
Amendment, shall use all reasonable efforts to solicit such approvals by its    
stockholders and shall not withdraw such recommendation. Without limiting the   
generality of the foregoing, the Company agrees that its obligations pursuant to
the first sentence of this Section 5.1 shall not be affected by the             
commencement, public proposal, public disclosure or communication to the Company
of a Takeover Proposal.                                                         

Section 5.2 Preparation of the Proxy Statement and Schedule 13e-3. The
Company shall promptly prepare and, after consultation with Parent, file with   
the SEC the Proxy Statement and shall use its reasonable best efforts to obtain 
and furnish the information required to be included in the Proxy Statement and, 
after consultation with Parent, respond promptly to any comments made by the    
SEC. In connection with the Company consulting with Parent concerning the Proxy 
Statement, the Company shall provide Parent                                     

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a reasonable opportunity to review and comment on the Proxy Statement and       
amendment or modification thereto prior to filing with the SEC, shall reasonably
consider the comments and suggestions of Parent, shall not change without       
Parent's consent any information provided by Parent for inclusion in the Proxy  
Statement that the Company requests of Parent, shall promptly notify Parent of  
the receipt of any comments or other communications from the SEC regarding the  
Proxy Statement and shall provide Parent a reasonable opportunity to review and 
comment on any response by the Company to any comments or other communications  
from the SEC that requires a response. The Company shall mail the Proxy         
Statement to its stockholders at the earliest practical date. Parent, Sub and   
(to the extent required by law) their respective affiliates shall promptly      
prepare and file, concurrent with the filing of the Proxy Statement and after   
consultation with the Company, with the SEC the Schedule 13e-3 and the Company  
shall reasonably cooperate with Parent in connection with the preparation of the
Schedule 13e-3. If at any time prior to the Effective Time any event with       
respect to Parent, its officers and directors or Sub shall occur, which is      
required to be described in the Schedule 13e-3 or the Proxy Statement, such     
event shall be so described, and, in the case of the Schedule 13e-3, Parent will
promptly give notice of such event to the Company and an appropriate amendment  
or supplement shall be promptly filed with the SEC and, as required by law,     
disseminated to the stockholders of the Company. If at any time prior to the    
Effective Time any event with respect to the Company, its officers and directors
or any of its Subsidiaries shall occur which is required at that time to be     
described in the Proxy Statement or the Schedule 13e-3, such event shall be so  
described, and, in the case of the Proxy Statement, the Company shall promptly  
notify Parent of such event and an appropriate amendment or supplement shall be 
promptly filed with the SEC and, as required by law, disseminated to the        
stockholders of the Company.                                                    

Section 5.3 Access to Information. Subject to currently existing      
contractual and legal restrictions applicable to the Company or any of its      
Subsidiaries, the Company shall, and shall cause each of its Subsidiaries to,   
afford to the accountants, counsel, financial advisors and other representatives
of Parent hereto reasonable access to, and permit them to make such inspections 
as they may reasonably require of, during normal business hours during the      
period from the date of this Agreement through the Effective Time, all their    
respective properties, books, contracts, commitments and records (including,    
without limitation, the work papers of independent accountants, if available and
subject to the consent of such independent accountants) and, during such period,
the Company shall, and shall cause each of its Subsidiaries to, furnish promptly
to Parent (i) a copy of each report, schedule, registration statement and other 
document filed by it during such period pursuant to the requirements of federal 
or state securities laws and (ii) all other information concerning its business,
properties and personnel as Parent may reasonably request. No investigation     
pursuant to this Section 5.3 shall affect any representation or warranty in this
Agreement of any party hereto or any condition to the obligations of the parties
hereto. All information obtained by Parent pursuant to this Section 5.3 shall be
kept confidential in accordance with the Confidentiality Agreement, dated May   
17, 1999, between Parent and the Company (the "Confidentiality Agreement").     

Section 5.4 Fees and Expenses                                         

   (a) Expenses. Except as provided below, all fees and expenses incurred in
connection with the Transactions shall be paid by the party incurring such fees 
or expenses, whether or not the Merger is consummated.                          

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   (b) Termination Fee. The Company shall pay to Parent a termination fee of
$7,500,000 if:                                                                  

         (i) the Company terminates this Agreement pursuant to Section 7.1(d);

          (ii) (A) after the date of this Agreement and prior to the termination
     of this Agreement, any Person makes a Takeover Proposal, (B) this Agreement
is terminated pursuant to Section 7.1(b)(iii) or (c) and (C) within 12
     months of the date of termination of this Agreement, the Company executes a
    legally binding definitive agreement or an agreement in principle pursuant
to which any Person, entity or group (other than Parent, Sub or any of
 their affiliates), in one transaction or a series of transactions, will
    acquire more than 50% of the outstanding Company Common Stock or assets of
the Company through any open market purchases, merger, consolidation, 
tender or exchange offer, recapitalization, reorganization or other   
  business combination and such transaction or series of transactions have
been consummated (an "Third Party Acquisition Event"); or             

(iii) (A) after the date of this Agreement and prior to the 
  termination of this Agreement, any Person makes a Takeover Proposal, (B)
   this Agreement is terminated by Parent pursuant to Section 7.1(e) or (f),
     and (C) a Third Party Acquisition Event occurs within 12 months of the date
of termination of this Agreement.                                     

Any termination fee due under this Section 5.4(b) shall be paid by wire transfer
of same-day funds on the date of termination of this Agreement in the case of a 
fee due under clause (i) of the preceding sentence, or on the date such Third   
Party Acquisition Event is consummated in the case of a fee due under clause    
(ii) or (iii) of the preceding sentence. The payment of the termination fee     
pursuant to this Section 5.4(b) shall constitute liquidated damages and shall be
the sole and exclusive remedy of Parent and Sub if this Agreement is terminated 
under the circumstances described above in this Section 5.4(b).                 

Section 5.5 Best Efforts                                              

(a) Consummation of the Merger. Upon the terms and subject to the     
conditions set forth in this Agreement, each of the parties agrees to use best  
efforts to take, or cause to be taken, all actions, and to do, or cause to be   
done, and to assist and cooperate with the other parties in doing, all things   
necessary, proper or advisable to consummate and make effective, in the most    
expeditious manner practicable, the transactions contemplated by this Agreement,
including, but not limited to: (i) the obtaining of all necessary actions or    
non-actions, waivers, consents and approvals from all Governmental Entities and 
the making of all necessary registrations and filings (including filings with   
Governmental Entities) and the taking of all reasonable steps as may be         
necessary to obtain an approval or waiver from, or to avoid an action or        
proceeding by, any Governmental Entity (including those in connection with the  
HSR Act, the Regulatory Approval, the Applicable New Jersey Laws, and State     
Takeover Approvals), (ii) the defending of any lawsuits or other legal          
proceedings, whether judicial or administrative, challenging this Agreement and 
the consummation of the transactions contemplated hereby, including seeking to  
have any stay or temporary restraining order entered by any court or other      
Governmental Entity vacated or reversed, (iii) the taking of all reasonable     
actions to minimize the effects of any State Takeover Approval on the           
transactions contemplated hereby, and (iv) the execution and delivery of any    
additional instruments necessary to consummate the transactions contemplated by 
this Agreement. No party to this Agreement shall consent to any                 

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voluntary delay of the consummation of the Merger at the behest of any          
Governmental Entity without the consent of the other parties to this Agreement, 
which consent shall not be unreasonably withheld.                               

   (b) Representations and Warranties. Each party shall not take any action,
or enter into any transaction, which would cause any of its representations or  
warranties contained in this Agreement to be untrue or result in a breach of any
covenant made by it in this Agreement.                                          

     (c) Divestiture. Notwithstanding anything to the contrary contained in this
Agreement, in connection with any filing or submission required or action to be 
taken by either Parent or the Company to effect the Merger and to consummate the
other transactions contemplated hereby, the Company shall not, without Parent's 
prior written consent, commit to any divestiture transaction, and neither Parent
nor any of its Affiliates shall be required to divest or hold separate or       
otherwise take or commit to take any action that limits its freedom of action   
with respect to, or its ability to retain, the Company or any of the material   
businesses, product lines or assets of Parent or any of its Subsidiaries or that
otherwise would have a Material Adverse Effect on Parent.                       

(d) Company Stock Option Termination Notices. At least sixty (60) days
prior to the Effective Time, the Company will give the "Acceleration Notice" as 
defined in and contemplated by the Company Plans pursuant to which Company Stock
Options were granted, provided that the holders of the Company Stock Options    
shall be entitled to the Option Consideration pursuant to Section 1.5(d) if such
holder executes and delivers the option termination agreement as contemplated by
Section 1.5(d) above.                                                           

     Section 5.6 Public Announcements. Parent and the Company will not issue any
press release with respect to the transactions contemplated by this Agreement or
otherwise issue any written public statements with respect to such transactions 
without prior consultation with the other party, except as may be required by   
applicable law or by obligations pursuant to any listing agreement with any     
national securities exchange or the Nasdaq National Market.                     

Section 5.7 Real Estate Transfer and Gains Tax. Parent and the Company
agree that either the Company or the Surviving Corporation will pay any state or
local tax which is attributable to the transfer of the beneficial ownership of  
the Company's or its Subsidiaries' real property, if any (collectively, the     
"Gains Taxes"), and any penalties or interest with respect to the Gains Taxes,  
payable in connection with the consummation of the Merger. The Company and      
Parent agree to cooperate with the other in the filing of any returns with      
respect to the Gains Taxes, including supplying in a timely manner a complete   
list of all real property interests held by the Company and its Subsidiaries and
any information with respect to such property that is reasonably necessary to   
complete such returns. The portion of the consideration allocable to the real   
property of the Company and its Subsidiaries shall be determined by Parent in   
its reasonable discretion.                                                      

Section 5.8 Indemnification; Directors and Officers Insurance.        

     (a) For six years from and after the Effective Time, Parent agrees to cause
the Surviving Corporation to, and shall guarantee the obligation of the         
Surviving Corporation to, indemnify and hold harmless all past and present      
officers and directors of the Company and of its Subsidiaries to the same extent
such Persons are indemnified as of the date of this Agreement by the Company    
pursuant to the Company's Certificate of Incorporation,                         

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By-Laws or agreements in existence on the date hereof for acts or omissions     
occurring at or prior to the Effective Time.                                    

(b) Parent shall provide, or shall cause the Surviving Corporation to 
provide, for an aggregate period of not less than six years from the Effective  
Time, the Company's current directors and officers an insurance and             
indemnification policy that provides coverage for events occurring prior to the 
Effective Time (the "D&O Insurance") that is substantially similar (with respect
to limits and deductibles) to the Company's existing policy or, if substantially
equivalent insurance coverage is unavailable, the best available coverage;      
provided, however, that the Surviving Corporation shall not be required in any  
year to expend more than $360,000 for such coverage (the "Maximum Premium"), and
provided, further, that if the Surviving Corporation is unable to obtain the    
amount of such insurance required by this Section 5.8(b) for such aggregate     
premiums, the Surviving Corporation shall purchase as much insurance as is      
obtainable for an aggregate annual premium of $360,000.                         

    (c) From and after the Effective Time, to the full extent permitted by the
law, Parent shall, and shall cause the Company (or any successor to the Company)
to, indemnify, defend and hold harmless the present officers and directors of   
the Company and its Subsidiaries (each an "Indemnified Party") against all      
losses, claims, damages, liabilities, fees and expenses (including reasonable   
attorneys' fees and disbursements), judgments, fines and amounts paid in        
settlement (collectively, "Losses") arising out of actions or omissions         
occurring at or prior to the Effective Time in connection with this Agreement,  
the Company Stockholder Agreement and the Transactions; provided, however, that 
an Indemnified Party shall not be entitled to indemnification under this Section
5.8(c) for Losses arising out of actions or omissions by the Indemnified Party  
constituting (i) a breach of this Agreement or the Company Stockholder          
Agreement, (ii) grossly negligent or criminal conduct or fraud, or (iii) any    
violation of federal, state or foreign securities laws. In order to be entitled 
to indemnification under this Section 5.8(c), an Indemnified Party must give    
Parent and the Company prompt written notice of any third party claim which may 
give rise to any indemnify obligation under this Section 5.8(c), and Parent and 
the Company shall have the right to assume the defense of any such claim through
counsel of their own choosing, subject to such counsel's reasonable judgment    
that separate defenses that would create a conflict of interest on the part of  
such counsel are not available. If Parent and the Company do not assume any such
defense, they shall be liable for all reasonable costs and expenses of defending
such claim incurred by the Indemnified Party, including reasonable fees and     
disbursements of counsel, and shall advance such reasonable costs and expenses  
to the Indemnified Party; provided, however, that such advance shall be made    
only after receiving an undertaking from the Indemnified Party that such advance
shall be repaid if it is determined that such Indemnified Party is not entitled 
to indemnification therefor. Neither Parent nor the Company shall be liable     
under this Section 5.8(c) for any Losses resulting from any settlement,         
compromise or offer to settle or compromise any such claim or litigation or     
other action, without the prior written consent of Parent and the Company.      

(d) In the event the Surviving Corporation or any successor to the    
Surviving Corporation (i) consolidates with or merges into any other Person and 
shall not be the continuing or surviving corporation or entity in such          
consolidation or merger or (ii) transfers all or substantially all its          
properties and assets to any Person, then, and in each case, proper provision   
shall be made so that the successors of the Surviving Corporation honor the     
obligations of the Company set forth in this Section 5.8.                       

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Section 5.9 Notification of Certain Matters. Parent shall use its best
efforts to give prompt notice to the Company, and the Company shall use its best
efforts to give prompt notice to Parent, of: (i) the occurrence, or             
non-occurrence, of any event the occurrence, or non-occurrence, of which it is  
aware and which would be reasonably likely to cause (x) any representation or   
warranty by it contained in this Agreement to be untrue or inaccurate in any    
material respect or (y) any covenant, condition or agreement contained in this  
Agreement not to be complied with or satisfied in all material respects by it,  
(ii) any failure of Parent or the Company, as the case may be, to comply in a   
timely manner with or satisfy any covenant, condition or agreement to be        
complied with or satisfied by it hereunder or (iii) any change or event which   
would be reasonably likely to have a Material Adverse Effect on the Company;    
provided, however, that the delivery of any notice pursuant to this Section 5.9 
shall not limit or otherwise affect the remedies available hereunder to the     
party receiving such notice.                                                    

Section 5.10 Employee Benefit Plans and Agreements                    

    (a) Company Plans. Parent shall cause the Surviving Corporation to perform
the obligations of the Company under, and comply with, the Employee Agreements  
and to maintain through December 31, 1999 the Company Plans (other than plans   
providing for the issuance of Company Common Stock or based on the value of     
Company Common Stock) in effect on the date of this Agreement; provided,        
however, that Parent shall have no obligation to continue or renew any Employee 
Agreement or Company Plan that may be terminated in accordance with its terms;  
and provided, further, however, that nothing in this Agreement shall confer on  
any individual any right to employment, compensation for employment, or employee
benefits. Notwithstanding the foregoing, Parent shall have the right, at its    
option, to replace the Company Plans with its own benefit plans provided such   
plans are in the aggregate comparable (taking into account all relevant factors)
with the Company Plans.                                                         

 (b) Credit for Prior Service; Waiver of Pre-existing Conditions. In the
event that Parent shall merge any Company Plan with any benefit plan of Parent  
or otherwise modify any Company Plan, prior service with the Company or any of  
its Subsidiaries will be counted for purposes of employee eligibility, seniority
and vesting under such benefit plan, and any pre-existing condition shall be    
waived for each employee so long as such employee has had medical coverage under
the Company Plans for at least six months immediately prior to the Effective    
Time.                                                                           

(c) Change of Control. Parent agrees that for purposes of any of the  
Company Plans conferring rights on a current or former employee, officer or     
director as a result of a change of control of the Company, the consummation of 
the Merger shall be deemed to constitute a "Change of Control" (as that term is 
defined in such Company Plans).                                                 

     Section 5.11 Performance by Sub. Parent shall cause Sub to comply with each
of its obligations hereunder and pursuant to the Company Stockholder Agreement, 
including, without limitation, causing Sub to consummate the Merger as          
contemplated herein, and Parent hereby guarantees the performance by Sub of such
obligations. Parent shall cause Sub to vote any shares of Common Stock owned by 
the Sub on the record date for the Stockholder Meeting to be voted for approval 
of this Agreement and the Merger.                                               

Section 5.12 Additional Consents and Approvals. The Company and Parent
agree that they will cooperate and use their commercially reasonable efforts to 
seek any waiver and/or consent required such that consummation of the           
Transactions will not constitute a                                              

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default under the terms of (1) that certain Credit Agreement, by and among NRG  
Generating (Newark) Cogeneration Inc. and NRG Generating (Parlin) Cogeneration  
Inc., Credit Suisse, Greenwich Funding Corporation and any Purchasing Lender as 
Lender and Credit Suisse as Agent, dated as of May 17, 1996, as amended by      
Amendment Number 1, dated June 28, 1996 and (2) that certain Construction and   
Term Loan Agreement, by and among NRG (Morris) Cogen, L.L.C., The Chase         
Manhattan Bank and other Banks as Lenders, The Chase Manhattan Bank as Agent and
The Chase Manhattan Bank as Collateral Agent, dated September 15, 1997, as      
amended by the Amendment and Consent, dated December 10, 1997.                  

ARTICLE VI

CONDITIONS PRECEDENT TO THE MERGER

     Section 6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to   
the fulfillment at or prior to the Effective Time of the following conditions:  

   (a) Stockholder Approval. This Agreement shall have been duly approved by
the requisite vote of stockholders of the Company in accordance with applicable 
law and the Certificate of Incorporation and By-laws of the Company.            

(b) HSR and Other Approvals. (i) The waiting period (and any extension
thereof) applicable to the consummation of the Merger under the HSR Act shall   
have expired or been terminated.                                                

     (ii) All authorizations, consents, orders, declarations or approvals of, or
filings with, or terminations or expirations of waiting periods imposed by, any 
Governmental Entity, which the failure to obtain, make or occur would have the  
effect of making the Merger or any of the transactions contemplated hereby      
illegal or would have, individually or in the aggregate, a Material Adverse     
Effect on Parent (assuming the Merger had taken place), shall have been         
obtained, shall have been made or shall have occurred.                          

(c) Governmental Actions. No statute, rule, regulation, legislation,  
interpretation, judgment, order or injunction shall be enacted, entered,        
enforced, promulgated, amended or become applicable to this Agreement or the    
Merger and no other action shall have been taken by any court or other          
Governmental Entity other than the application to the Merger of the waiting     
period under the HSR Act, that, in each case, would be reasonably expected to   
result in any of the following effects: (i) challenging the acquisition by      
Parent or Sub of any Company Common Stock, seeking to restrain or prohibit the  
making or consummation of the Merger or any other Transaction, (ii) seeking to  
prohibit or limit the ownership or operation by the Company, Parent or any of   
their respective Subsidiaries of any material portion of the business or assets 
of the Company, Parent or any of their respective Subsidiaries, or to compel the
Company, Parent or any of their respective Subsidiaries to dispose of or hold   
separate any material portion of the business or assets of the Company, Parent  
or any of their respective Subsidiaries, (iii) seeking to impose limitations on 
the ability of Parent or Sub to acquire or hold, or exercise full rights of     
ownership of, any shares of Company Common Stock, including the right to vote   
the Company Common Stock purchased by it on all matters properly presented to   
the stockholders of the Company, (iv) seeking to prohibit Parent or any of its  
Subsidiaries from effectively                                                   

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controlling in any material respect the business or operations of the Company   
and its Subsidiaries in connection with the Offer, the Merger or the Agreement, 
or (v) which otherwise is reasonably likely to have a Material Adverse Effect on
the Company.                                                                    

Section 6.2 Conditions to Obligation of the Company to Effect the     
Merger. The obligation of the Company to effect the Merger shall be subject to  
the fulfillment at or prior to the Effective Time of the following additional   
conditions:                                                                     

     (a) Performance of Obligations. Each of Parent and Sub shall have performed
in all material respects each of its agreements contained in this Agreement     
required to be performed on or prior to the Effective Time.                     

(b) Representations and Warranties. Each of the representations and   
warranties of Parent and Sub contained in this Agreement shall be true and      
correct, provided that such representations and warranties shall be deemed to be
true and correct unless the failure of such representations and warranties to be
so true and correct would have a Material Adverse Effect on Parent or would     
prevent Parent from consummating the transactions contemplated by the Agreement,
in each case as if such representations and warranties were made at the time of 
such termination (except to the extent such representations or warranties       
expressly relate to an earlier date).                                           

(c) Certain Consents. In obtaining any approval or consent required to
consummate any of the transactions contemplated herein, no Governmental Entity  
shall have imposed or shall have sought to impose any condition, penalty or     
requirement which, in the reasonable opinion of the Company, individually or in 
the aggregate, would have a Material Adverse Effect on Parent (assuming the     
consummation of the Merger).                                                    

Section 6.3 Conditions to Obligations of Parent and Sub to Effect the 
Merger. The obligations of Parent and Sub to effect the Merger shall be subject 
to the fulfillment at or prior to the Effective Time of the following additional
conditions:                                                                     

  (a) Performance of Obligations. The Company shall have complied with the
provisions of Section 4.1 of the Agreement, and the Company shall have complied 
with any agreement or covenant in any material respect of the Company to be     
performed or complied with by it under the Agreement.                           

(b) Representations and Warranties. Each of the representations and   
warranties of the Company contained in this Agreement shall be true and correct,
provided that such representations and warranties shall be deemed to be true and
correct unless the failure of such representations and warranties to be so true 
and correct would have a Material Adverse Effect on the Company or would prevent
the Company from consummating the transactions contemplated by the Agreement, in
each case as if such representations and warranties were made at the time of    
such termination (except to the extent such representations or warranties       
expressly relate to an earlier date).                                           

   (c) Litigation. There shall not be instituted or pending any suit, action
or proceeding by any Governmental Entity or by any other Person initiated as a  
result of this Agreement or any transactions contemplated hereby (i) challenging
the acquisition by Parent or Sub of any Company Common Stock, seeking to        
restrain or prohibit the making or consummation of the Merger or any other      
Transaction, (ii) seeking to prohibit or limit the ownership or operation by the
Company, Parent or any of their respective Subsidiaries of any material portion 
of the business or assets of the Company, Parent or any of their respective     
Subsidiaries, or to compel the Company, Parent or any of their respective       

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Subsidiaries to dispose of or hold separate any material portion of the business
or assets of the Company, Parent or any of their respective Subsidiaries, (iii) 
seeking to impose limitations on the ability of Parent or Sub to acquire or     
hold, or exercise full rights of ownership of, any shares of Company Common     
Stock, including the right to vote the Company Common Stock purchased by it on  
all matters properly presented to the stockholders of the Company, (iv) seeking 
to prohibit Parent or any of its Subsidiaries from effectively controlling in   
any material respect the business or operations of the Company and its          
Subsidiaries in connection with the Merger or the Agreement, or (v) which       
otherwise is reasonably likely to have a Material Adverse Effect on the Company.

   (d) Material Adverse Effect. Since the date of the Agreement, there shall
not have occurred any event, change, effect or development that, individually or
in the aggregate, has had or would be reasonably expected to have a Material    
Adverse Effect on the Company.                                                  

ARTICLE VII 
TERMINATION, AMENDMENT AND WAIVER 

     Section 7.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after any approval of the matters      
presented in connection with the Merger by the stockholders of the Company or   
Parent:                                                                         

(a) by mutual written consent of Parent and the Company;              

(b) by either Parent or the Company:                                  

       (i) if the Merger has not been effected on or prior to the close of
     business on February 28, 2000 (the "Outside Date"); provided, however, that
  the right to terminate this Agreement pursuant to this Section 7.1(b)(i)
   shall not be available to any party whose material and willful failure to
 fulfill any of its obligations contained in this Agreement has been the
    cause of, or resulted in, the failure of the Merger to have occurred on or
   prior to the Outside Date; provided; however that if the sole reason that
the Merger shall not have been consummated by the Outside Date is the 
   failure to hold the Stockholder Meeting by February 28, 2000, the Outside
Date shall be extended to March 31, 2000;                             

      (ii) if any court or other Governmental Entity having jurisdiction
   over a party hereto shall have issued an order, decree or ruling or taken
any other action permanently enjoining, restraining or otherwise      
     prohibiting the transactions contemplated by this Agreement and such order,
   decree, ruling or other action shall have become final and nonappealable;
or                                                                    

 (iii) if the stockholders of the Company fail to approve this
   Agreement and the Merger at the Stockholder Meeting or any adjournment or
postponement thereof;                                                 

(c) by Parent if prior to the Effective Time, the Company's Board of  
Directors or any committee thereof shall have withdrawn or modified in a manner 
adverse to Sub or Parent its approval or recommendation of the Transactions or  
shall have recommended or approved a Company Superior Proposal, or shall have   
resolved to do any of the foregoing;                                            

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   (d) by the Company, upon approval of its Board of Directors in accordance
with Section 4.2(b); provided, however, that any termination of this Agreement  
pursuant to this Section 7.1(d) shall not be effective until the Company has    
made full payment of all amounts provided under Section 5.4(b);                 

    (e) by either Parent or the Company if the other party shall have breached
or failed to comply in any material respect with any of its covenants or        
agreements other than Section 4.1 contained in this Agreement required to be    
performed or complied with prior to the date of such termination, which failure 
to comply has not been cured within thirty business days following receipt by   
such other party of written notice from the non-breaching party of such failure 
to comply or by Parent if the Company shall have breached or failed to comply   
with Section 4.1; or                                                            

     (f) by either Parent or the Company if there has been a breach by the other
party (in the case of Parent, including any material breach by Sub) of any      
representation or warranty that individually or in the aggregate has a Material 
Adverse Effect on the breaching party or would prevent such breaching party from
consummating the transactions contemplated by this Agreement.                   

    The right of any party hereto to terminate this Agreement pursuant to this
Section 7.1 shall remain operative and in full force and effect regardless of   
any investigation made by or on behalf of any party hereto, any Person          
controlling any such party or any of their respective officers or directors,    
whether prior to or after the execution of this Agreement.                      

Section 7.2 Effect of Termination. In the event of termination of this
Agreement by either Parent or the Company, as provided in Section 7.1, this     
Agreement shall forthwith become void and there shall be no liability hereunder 
on the part of the Company, Parent, Sub or their respective officers or         
directors (except for the last sentence of Section 5.3 and the entirety of      
Sections 5.4, 8.6, 8.7, 8.9 and 8.10, which shall survive the termination);     
provided, however, that nothing contained in this Section 7.2 shall relieve any 
party hereto from any liability for any willful breach of a representation or   
warranty contained in this Agreement or the breach of any covenant contained in 
this Agreement.                                                                 

     Section 7.3 Amendment. This Agreement may be amended by the parties hereto,
by or pursuant to action taken by their respective Boards of Directors, at any  
time before or after approval of the matters presented in connection with the   
Merger by the stockholders of the Company, but, after any such approval, no     
amendment shall be made which by law requires further approval by such          
stockholders without such further approval. This Agreement may not be amended   
except by an instrument in writing signed on behalf of each of the parties      
hereto.                                                                         

  Section 7.4 Waiver. At any time prior to the Effective Time, the parties
hereto may (i) extend the time for the performance of any of the obligations or 
other acts of the other parties hereto, (ii) waive any inaccuracies in the      
representations and warranties of the other parties contained herein or in any  
document delivered pursuant hereto and (iii) waive compliance with any of the   
agreements or conditions contained herein which may legally be waived. Any      
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such    
party.                                                                          

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ARTICLE VIII

GENERAL PROVISIONS

Section 8.1 Non-Survival of Representations and Warranties. The       
representations and warranties in this Agreement or in any instrument delivered 
pursuant to this Agreement shall terminate at the Effective Time.               

   Section 8.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given when delivered personally, one day after
being delivered to an overnight courier or when sent via facsimile (with a      
confirmatory copy sent by overnight courier) to the parties at the following    
addresses (or at such other address for a party as shall be specified by like   
notice):                                                                        

(a) if to Parent or Sub, to                                               

Calpine Corporation                                               
50 West San Fernando Street                                       
San Jose, CA 95113                                                
Attention: John T. King, Vice President                           
Fax: (408) 995-0505                                               

with a copy to:                                                   

Howard, Smith & Levin LLP                                         
1330 Avenue of the Americas                                       
New York, NY 10019                                                
Attention: William R. Collins                                     
Fax: (212) 841-1010                                               

(b) if to the Company, to                                                 

Cogeneration Corporation of America.                              
One Carlson Parkway, Suite 240                                    
Minneapolis, Minnesota 55447-4454                                 
Attention: Julie A. Jorgensen                                     
President and Chief Executive Officer     
Facsimile No.: (612) 745-7901                                     

with a copy to:                                                   

Kaplan, Strangis and Kaplan, P.A.                                 
5500 Norwest Center                                               
Minneapolis, Minnesota 55402                                      
Attention: Bruce J. Parker                                        
Facsimile No.: (612) 375-1143                                     

     Section 8.3 Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are   
for reference purposes only and shall not affect in any way the meaning or      
interpretation of this Agreement. Whenever the words "include," "includes" or   
"including" are used in this Agreement, they shall be deemed to be followed by  
the words "without limitation."                                                 

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   Section 8.4 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement, and shall become   
effective when one or more counterparts have been signed by each of the parties 
and delivered to the other parties.                                             

     Section 8.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement,
except and as provided in the last sentence of Section 5.3, constitutes the     
entire agreement and supersedes all prior agreements and understandings, both   
written and oral, among the parties with respect to the subject matter hereof.  
Except as provided pursuant to Section 5.8 and 5.10, this Agreement is not      
intended to confer upon any Person other than the parties hereto any rights or  
remedies hereunder.                                                             

Section 8.6 Governing Law. This Agreement shall be governed by, and   
construed in accordance with, the laws of the State of Delaware, regardless of  
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.                                                                   

Section 8.7 Assignment. Neither this Agreement nor any of the rights, 
interests or obligations hereunder shall be assigned by any of the parties      
hereto (whether by operation of law or otherwise) without the prior written     
consent of the other parties.                                                   

    Section 8.8 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other terms, conditions and provisions of this Agreement shall      
nevertheless remain in full force and effect so long as the economic and legal  
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon such determination that any term or other 
provision is invalid, illegal or incapable of being enforced, the parties shall 
negotiate in good faith to modify this Agreement so as to effect the original   
intent of the parties as closely as possible in a mutually acceptable manner in 
order that the transactions contemplated by this Agreement may be consummated as
originally contemplated to the fullest extent possible.                         

  Section 8.9 Enforcement of this Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this  
Agreement were not performed in accordance with their specific wording or were  
otherwise breached. It is accordingly agreed that the parties hereto shall be   
entitled to seek an injunction or injunctions to prevent breaches of this       
Agreement and to enforce specifically the terms and provisions hereof in any    
court of the United States or any state having jurisdiction, such remedy being  
in addition to any other remedy to which any party is entitled at law or in     
equity.                                                                         

Section 8.10 Consent to Jurisdiction. Each of the parties hereto (a)  
consents to submit itself to the non-exclusive personal jurisdiction of any     
Federal court located in the State of Delaware or any Delaware state court in   
the event any dispute arises out of this Agreement or any of the transactions   
contemplated by this Agreement, and (b) agrees that it will not attempt to deny 
or defeat such personal jurisdiction by motion.                                 

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    IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized all as of   
the date first written above.                                                   

                                       COGENERATION CORPORATION OF AMERICA

                              By: /s/ JULIE A. JORGENSEN
                                             -----------------------------------
                              Julie A. Jorgensen
                                         President and Chief Executive
                   Officer

                       CALPINE CORPORATION
                        By: /s/ JOHN T. KING
                                             -----------------------------------
                        John T. King
                          Vice President

                                  CALPINE EAST ACQUISITION CORP.
                        By: /s/ JOHN T. KING
                                             -----------------------------------
                        John T. King
                          Vice President

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EXHIBIT A 
FORM OF CERTIFICATE OF INCORPORATION

    The following sentence shall be added at the end of Article Seventh of the
Company's Amended and Restated Certificate of Incorporation:                    

   The provisions of this Article Seventh shall not apply to the transfer of
 shares of the Corporation's common stock by NRG Energy, Inc. to Calpine
    East Acquisition Corp. in contemplation of closing the merger contemplated
by the agreement and plan of merger dated August   , 1999 among the   
Corporation, Calpine Corporation and Calpine East Acquisition Corp.   

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                                                                      APPENDIX B

AMENDMENT TO CERTIFICATE OF INCORPORATION 

    The following sentence shall be added at the end of Article Seventh of the
Company's Amended and Restated Certificate of Incorporation:                    

   The provisions of this Article Seventh shall not apply to the transfer of
 shares of the Corporation's common stock by NRG Energy, Inc. to Calpine
    East Acquisition Corp. in contemplation of closing the merger contemplated
by the agreement and plan of merger dated August 26, 1999 among the   
Corporation, Calpine Corporation and Calpine East Acquisition Corp.   

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                                                                      APPENDIX C

FAIRNESS OPINION OF DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION 

                                                                 August 26, 1999

The Independent Directors Committee                                             
Cogeneration Corporation of America                                             
One Carlson Parkway                                                             
Suite 240                                                                       
Minneapolis, MN 55447-4454                                                      

Dear Sirs:                                                                      

     You have requested our opinion as to the fairness from a financial point of
view to the stockholders of Cogeneration Corporation of America, a Delaware     
corporation (the "Company"), other than NRG Energy, Inc. ("NRG") which currently
owns approximately 45.3% of the Company's outstanding common stock, of the      
consideration to be received by such stockholders pursuant to the terms of the  
Agreement and Plan of Merger, dated as of August 26, 1999 (the "Agreement"), by 
and among Calpine Corporation, a Delaware corporation ("Buyer"), the Company and
Calpine East Acquisition Corp., a Delaware corporation and a subsidiary of Buyer
("Sub"), pursuant to which Sub will be merged (the "Merger") with and into the  
Company.                                                                        

Pursuant to the Agreement, each issued and outstanding share of common
stock of the Company, par value $.01 per share (the "Common Stock"), will be    
converted into the right to receive $25.00 per share in cash (the "Merger       
Price"), except for certain shares held by Sub, including shares that NRG will  
contribute to the Sub pursuant to the Contribution and Stockholders Agreement,  
dated August 26, 1999 (the "Stockholder Agreement"), by and among Buyer, Sub and
NRG. After giving effect to the Merger and the Stockholder Agreement, 80% of the
common stock of the Company surviving the Merger will be held by Buyer and 20%  
will be held by NRG.                                                            

 In arriving at our opinion, we have reviewed the Agreement, the Company
Letter, dated August 26, 1999, described in Section 3.2 of the Agreement, and   
the Stockholder Agreement, which sets forth the essential terms and conditions  
under which NRG would be able to sell its Common Stock. We also have reviewed   
certain financial and other business information that was publicly available or 
furnished to us by the Company, including information provided during           
discussions with management, for recent years and interim periods to date.      
Included in the information provided during discussions with management were    
certain internal financial forecasts and projections of the Company for the     
period beginning January 1, 1999 and ending December 31, 2009 prepared by the   
management of the Company. We have met with the management of the Company to    
review and discuss such information and the Company's business, operations,     
assets, financial condition and future prospects. In addition, we have also     
considered certain financial and stock market data of the Company, and we have  
compared that data with similar data for various other companies whose          
securities are traded in public markets, which we believe may be similar or     
comparable to the Company, reviewed the historical stock prices and trading     
volumes of the common stock of the Company, reviewed prices and premiums paid in
certain other recent acquisition or business combination transactions           
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and conducted such other financial studies, analyses and investigations as we   
deemed appropriate for purposes of rendering this opinion.                      

    In our review and analysis and in formulating our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other 
information that was available to us from public sources, that was provided to  
us by the Company or its representatives, or that was otherwise reviewed by us, 
and we have not attempted independently to verify any of such information. With 
respect to the financial projections supplied to us by the Company, we have     
relied on representations that they were prepared in good faith and on bases    
reflecting the best currently available judgments and estimates of the          
management of the Company as to the future operating and financial performance  
of the Company. In addition, we have not conducted a physical inspection of the 
properties or facilities of the Company or assumed any responsibility for making
an independent evaluation of any assets or liabilities of the Company or for    
making any independent verification of any of the information reviewed by us.   

   Our opinion is necessarily based on economic, market, financial and other
conditions as they exist on, and on the information made available to us as of  
the date of this letter. It should be understood that, although subsequent      
developments may affect this opinion, we do not have any obligation to update,  
revise or reaffirm this opinion. Our opinion does not constitute a              
recommendation to any stockholder as to how such stockholder should vote on the 
proposed Merger and should not be relied upon by any stockholder as such.       

     Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), as part of its
investment banking services, is regularly engaged in the valuation of businesses
and securities in connection with mergers, acquisitions, underwritings, sales   
and distributions of listed and unlisted securities, private placements and     
valuations for corporate and other purposes. DLJ has performed investment       
banking services for the Company in the past and has been compensated for such  
services. We have also acted as financial advisor to the Company in connection  
with the proposed sale of the Company to Buyer, including participating in the  
discussions and negotiations between the Company and Buyer which resulted in the
Agreement. We will also receive a fee from the Company for rendering this       
opinion and are continuing to provide financial advisory services to the Company
with respect to the Merger and may receive additional fees for such services.   

   Based upon and subject to the foregoing and such other factors as we deem
relevant, including the various assumptions and limitations set forth herein, we
are of the opinion that as of the date hereof the Merger Price to be received by
the stockholders of the Company (other than NRG) pursuant to the Merger is fair 
from a financial point of view to such stockholders.                            

                     Very truly yours,

                                DONALDSON, LUFKIN & JENRETTE
                          SECURITIES CORPORATION

                           By: /s/ JAMES M. BRONER
                                             -----------------------------------
                           James M. Broner
                                 Senior Vice President

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                                                                      APPENDIX D

SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW 

(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this  
section with respect to such shares, who continuously holds such shares through 
the effective date of the merger or consolidation, who has otherwise complied   
with subsection (d) of this section and who has neither voted in favor of the   
merger or consolidation nor consented thereto in writing pursuant to sec. 228 of
this title shall be entitled to an appraisal by the Court of Chancery of the    
fair value of the stockholder's shares of stock under the circumstances         
described in subsections (b) and (c) of this section. As used in this section,  
the word "stockholder" means a holder of record of stock in a stock corporation 
and also a member of record of a nonstock corporation; the words "stock" and    
"share" mean and include what is ordinarily meant by those words and also       
membership or membership interest of a member of a nonstock corporation; and the
words "depository receipt" mean a receipt or other instrument issued by a       
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository. 

(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be 
effected pursuant to sec. 251 (other than a merger effected pursuant to sec.    
251(g) of this title), sec. 252, sec. 254, sec. 257, sec. 258, sec. 263 or sec. 
264 of this title:                                                              

      (1) Provided, however, that no appraisal rights under this section
  shall be available for the shares of any class or series of stock, which
    stock, or depository receipts in respect thereof, at the record date fixed
    to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or    
    consolidation, were either (i) listed on a national securities exchange or
     designated as a national market system security on an interdealer quotation
     system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no    
appraisal rights shall be available for any shares of stock of the    
  constituent corporation surviving a merger if the merger did not require
    for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec. 251 of this title.              

          (2) Notwithstanding paragraph (1) of this subsection, appraisal rights
     under this section shall be available for the shares of any class or series
   of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to   
   sec.sec. 251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:                                           

           a. Shares of stock of the corporation surviving or resulting from
        such merger or consolidation, or depository receipts in respect thereof;

             b. Shares of stock of any other corporation, or depository receipts
    in respect thereof, which shares of stock (or depository receipts in
    respect thereof) or depository receipts at the effective date of the
      merger or consolidation will be either listed on a national securities
 exchange or designated as a national market system security on an
      interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;     

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       c. Cash in lieu of fractional shares or fractional depository
   receipts described in the foregoing subparagraphs a. and b. of this
   paragraph; or d. Any combination of the shares of stock, depository
       receipts and cash in lieu of fractional shares or fractional depository
       receipts described in the foregoing subparagraphs a., b. and c. of this
paragraph.                                                      

          (3) In the event all of the stock of a subsidiary Delaware corporation
     party to a merger effected under sec. 253 of this title is not owned by the
    parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.   

  (c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any    
class or series of its stock as a result of an amendment to its certificate of  
incorporation, any merger or consolidation in which the corporation is a        
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision, 
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.                   

(d) Appraisal rights shall be perfected as follows:                   

        (1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a  
  meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
 record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsection (b) or (c) hereof that    
appraisal rights are available for any or all of the shares of the    
   constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of such    
     stockholder's shares shall deliver to the corporation, before the taking of
    the vote on the merger or consolidation, a written demand for appraisal of
    such stockholder's shares. Such demand will be sufficient if it reasonably
 informs the corporation of the identity of the stockholder and that the
   stockholder intends thereby to demand the appraisal of such stockholder's
shares. A proxy or vote against the merger or consolidation shall not 
   constitute such a demand. A stockholder electing to take such action must
     do so by a separate written demand as herein provided. Within 10 days after
the effective date of such merger or consolidation, the surviving or  
 resulting corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not voted in
   favor of or consented to the merger or consolidation of the date that the
merger or consolidation has become effective; or                      

        (2) If the merger or consolidation was approved pursuant to sec. 228
    or sec. 253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days      
thereafter, shall notify each of the holders of any class or series of
    stock of such constituent corporation who are entitled to appraisal rights
  of the approval of the merger or consolidation and that appraisal rights
 are available for any or all shares of such class or series of stock of
  such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the   
   effective date of the merger or consolidation, such notice shall be given
    by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to  
    appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or                                                 

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   consolidation, shall, also notify such stockholders of the effective date
of the merger or consolidation. Any stockholder entitled to appraisal 
     rights may, within 20 days after the date of mailing of such notice, demand
 in writing from the surviving or resulting corporation the appraisal of
such holder's shares. Such demand will be sufficient if it reasonably 
 informs the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such holder's  
     shares. If such notice did not notify stockholders of the effective date of
   the merger or consolidation, either (i) each such constituent corporation
shall send a second notice before the effective date of the merger or 
     consolidation notifying each of the holders of any class or series of stock
  of such constituent corporation that are entitled to appraisal rights of
    the effective date of the merger or consolidation or (ii) the surviving or
   resulting corporation shall send such a second notice to all such holders
    on or within 10 days after such effective date; provided, however, that if
   such second notice is sent more than 20 days following the sending of the
    first notice, such second notice need only be sent to each stockholder who
is entitled to appraisal rights and who has demanded appraisal of such
 holder's shares in accordance with this subsection. An affidavit of the
secretary or assistant secretary or of the transfer agent of the      
 corporation that is required to give either notice that such notice has
   been given shall, in the absence of fraud, be prima facie evidence of the
     facts stated therein. For purposes of determining the stockholders entitled
     to receive either notice, each constituent corporation may fix, in advance,
 a record date that shall be not more than 10 days prior to the date the
notice is given, provided, that if the notice is given on or after the
 effective date of the merger or consolidation, the record date shall be
 such effective date. If no record date is fixed and the notice is given
     prior to the effective date, the record date shall be the close of business
on the day next preceding the day on which the notice is given.       

(e) Within 120 days after the effective date of the merger or         
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to   
appraisal rights, may file a petition in the Court of Chancery demanding a      
determination of the value of the stock of all such stockholders.               
Notwithstanding the foregoing, at any time within 60 days after the effective   
date of the merger or consolidation, any stockholder shall have the right to    
withdraw such stockholder's demand for appraisal and to accept the terms offered
upon the merger or consolidation. Within 120 days after the effective date of   
the merger or consolidation, any stockholder who has complied with the          
requirements of subsections (a) and (d) hereof, upon written request, shall be  
entitled to receive from the corporation surviving the merger or resulting from 
the consolidation a statement setting forth the aggregate number of shares not  
voted in favor of the merger or consolidation and with respect to which demands 
for appraisal have been received and the aggregate number of holders of such    
shares. Such written statement shall be mailed to the stockholder within 10 days
after such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the    
period for delivery of demands for appraisal under subsection (d) hereof,       
whichever is later.                                                             

 (f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which   
shall within 20 days after such service file in the office of the Register in   
Chancery in which the petition was filed a duly verified list containing the    
names and addresses of all stockholders who have demanded payment for their     
shares and with whom agreements as to the value of their shares have not been   
reached by the surviving or resulting corporation. If the petition shall be     
filed by the surviving or resulting corporation, the petition shall be          
accompanied by such                                                             

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a duly verified list. The Register in Chancery, if so ordered by the Court,     
shall give notice of the time and place fixed for the hearing of such petition  
by registered or certified mail to the surviving or resulting corporation and to
the stockholders shown on the list at the addresses therein stated. Such notice 
shall also be given by 1 or more publications at least 1 week before the day of 
the hearing, in a newspaper of general circulation published in the City of     
Wilmington, Delaware or such publication as the Court deems advisable. The forms
of the notices by mail and by publication shall be approved by the Court, and   
the costs thereof shall be borne by the surviving or resulting corporation.     

(g) At the hearing on such petition, the Court shall determine the    
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an   
appraisal for their shares and who hold stock represented by certificates to    
submit their certificates of stock to the Register in Chancery for notation     
thereon of the pendency of the appraisal proceedings; and if any stockholder    
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.                                                               

    (h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or        
consolidation, together with a fair rate of interest, if any, to be paid upon   
the amount determined to be the fair value. In determining such fair value, the 
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of 
interest which the surviving or resulting corporation would have had to pay to  
borrow money during the pendency of the proceeding. Upon application by the     
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery 
or other pretrial proceedings and may proceed to trial upon the appraisal prior 
to the final determination of the stockholder entitled to an appraisal. Any     
stockholder whose name appears on the list filed by the surviving or resulting  
corporation pursuant to subsection (f) of this section and who has submitted    
such stockholder's certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally          
determined that such stockholder is not entitled to appraisal rights under this 
section.                                                                        

 (i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court 
may direct. Payment shall be so made to each such stockholder, in the case of   
holders of uncertificated stock forthwith, and the case of holders of shares    
represented by certificates upon the surrender to the corporation of the        
certificates representing such stock. The Court's decree may be enforced as     
other decrees in the Court of Chancery may be enforced, whether such surviving  
or resulting corporation be a corporation of this State or of any state.        

  (j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon        
application of a stockholder, the Court may order all or a portion of the       
expenses incurred by any stockholder in connection with the appraisal           
proceeding, including, without limitation, reasonable attorney's fees and the   
fees and expenses of experts, to be charged pro rata against the value of all   
the shares entitled to an appraisal.                                            

  (k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of  
this section shall be                                                           

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entitled to vote such stock for any purpose or to receive payment of dividends  
or other distributions on the stock (except dividends or other distributions    
payable to stockholders of record at a date which is prior to the effective date
of the merger or consolidation); provided, however, that if no petition for an  
appraisal shall be filed within the time provided in subsection (e) of this     
section, or if such stockholder shall deliver to the surviving or resulting     
corporation a written withdrawal of such stockholder's demand for an appraisal  
and an acceptance of the merger or consolidation, either within 60 days after   
the effective date of the merger or consolidation as provided in subsection (e) 
of this section or thereafter with the written approval of the corporation, then
the right of such stockholder to an appraisal shall cease. Notwithstanding the  
foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed  
as to any stockholder without the approval of the Court, and such approval may  
be conditioned upon such terms as the Court deems just.                         

(l) The shares of the surviving or resulting corporation to which the 
shares of such objecting stockholders would have been converted had they        
assented to the merger or consolidation shall have the status of authorized and 
unissued shares of the surviving or resulting corporation.                      

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COGENERATION CORPORATION OF AMERICA 
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS 
FOR THE SPECIAL MEETING OF STOCKHOLDERS ON DECEMBER 16, 1999. 
 The undersigned, hereby appoints David H. Peterson and Julie A.
Jorgensen, or either of them, as proxies, each with full power of     
substitution, to represent and to vote, as designated below, all the  
undersigned's shares of Common Stock of Cogeneration Corporation of   
America, which the undersigned would be entitled to vote at the       
Special Meeting of Stockholders to be held on             , December  
16, 1999 at 9:00 a.m., and at any adjournment thereof.                
 This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is    
made, this Proxy will be voted "FOR" proposals 1, 2 and 3.            

PLEASE MARK VOTE IN BOX IN THE FOLLOWING MANNER USING DARK INK ONLY.

1. To consider and vote upon a proposal to approve and adopt the      
Agreement and Plan of Merger, dated as of August 26, 1999 (the  
"Merger Agreement"), pursuant to which Calpine East Acquisition 
  Corp ("Acquisition Sub"), a Delaware corporation and subsidiary of
Calpine Corporation, a Delaware corporation ("Calpine"), will be
merged (the "Merger") with and into Cogeneration Corporation of 
   America ("CogenAmerica") and each outstanding share of CogenAmerica
  common stock will be converted into the right to receive $25.00 in
  cash, other than shares owned by CogenAmerica, Acquisition Sub and
stockholders who exercise their appraisal rights under Delaware 
law. A copy of the Merger Agreement is attached as Appendix A to
the accompanying Proxy Statement. The Merger Agreement is also  
summarized in the Proxy Statement.                              
    [ ] FOR          [ ] AGAINST         [ ] ABSTAIN
2. To consider and vote upon a proposal to approve an amendment to    
CogenAmerica's Certificate of Incorporation as set forth in     
Appendix B to the Proxy Statement. The charter amendment is also
summarized in the Proxy Statement.                              
    [ ] FOR          [ ] AGAINST         [ ] ABSTAIN
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
(Continued and TO BE SIGNED on reverse side.) 

(Continued from other side) 
3. To authorize the proxies to vote to postpone or adjourn the Special
Meeting for the purpose of soliciting additional proxies for    
approval of proposals 1 and 2 above.                            
    [ ] FOR          [ ] AGAINST         [ ] ABSTAIN
4. To consider and act upon such other matters as may properly come   
before the Special Meeting or any adjournment or adjournments   
thereof.                                                        
    [ ] FOR          [ ] AGAINST         [ ] ABSTAIN
Please vote, date, sign and mail promptly this proxy in the   
enclosed envelope. When there is more than one owner, each should     
sign. When signing as attorney, administrator, executor, guardian or  
trustee, please add your title as such. If executed by a corporation, 
the full corporation name should be given, and this proxy should be   
signed by a duly authorized officer, showing his or her title.        

                     Dated  , 1999

                                       -------------------------------
                                      Signature(s)

                                       -------------------------------
                                      Signature(s)
                                    (Please sign exactly as name
                                    appears hereon. Joint owners
                                should each sign.) Where
                                     applicable, indicate official
                                  position or representative
                 capacity.

YOUR VOTE IS IMPORTANT. 
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEFS14A’ Filing		Date		First		Last			Other Filings
		12/31/09		22		108
		4/30/02		60
		12/31/00		37
		3/31/00		13		101
		2/28/00		13		101
		1/20/00		65
		12/31/99		5		98
For Period End:		12/16/99		2		115
		12/15/99		43
Filed on:		11/16/99							SC 13E3/A
		11/15/99		65					10-Q
		11/12/99		2		61			PRER14A,  SC 13E3/A
		11/8/99		18
		10/13/99		15
		9/20/99		1
		9/17/99		15
		9/3/99		42
		9/2/99		65					8-K
		8/31/99		15		41
		8/27/99		11		27			8-K,  SC 13D/A
		8/26/99		3		115
		8/25/99		26		29
		8/23/99		35
		8/20/99		35
		8/19/99		26		29
		8/17/99		25
		8/16/99		26
		8/13/99		25
		8/12/99		25					10-Q
		8/10/99		24		25
		8/9/99		24
		8/6/99		24
		8/4/99		24
		8/3/99		24
		7/30/99		24
		7/29/99		29
		7/28/99		23
		7/27/99		23
		7/22/99		23
		7/15/99		23
		7/13/99		22		23
		6/30/99		20		65			10-Q
		6/21/99		22
		6/11/99		22		43
		6/4/99		22
		6/3/99		38
		5/31/99		79
		5/25/99		22
		5/20/99		22		29			DEF 14A
		5/17/99		94
		5/13/99		21
		5/1/99		43
		4/26/99		22
		3/31/99		22		65			10-K,  10-Q
		1/26/99		21		29
		1/1/99		22		108
		12/31/98		22		82			10-K
		8/20/98		35
		12/10/97		99
		9/15/97		99
		5/8/97		62					SC 13D
		12/31/96		19					10-K,  10-K/A
		7/1/96		20
		6/30/96		20					10-K/A,  10-K405,  10-K405/A,  NT 10-K
		6/28/96		99
		5/17/96		99
		4/30/96		20		81			8-K,  8-K/A
		1/1/96		35
		9/30/95		36
		6/30/95		20
		9/28/94		21
		6/30/94		20					10-K,  NT 10-K
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