                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of

                       the Securities Exchange Act of 1934


        Date of Report (Date of earliest event reported): August 14, 2001


                               CALPINE CORPORATION

                            (A Delaware Corporation)

                        Commission File Number: 001-12079

                  I.R.S. Employer Identification No. 77-0212977


                           50 West San Fernando Street

                           San Jose, California 95113

                            Telephone: (408) 995-5115




<PAGE>


ITEM 5.       OTHER EVENTS

On August 14, 2001, Calpine  Corporation filed its Quarterly Report on Form 10-Q
for the  quarterly  period ended June 30,  2001.  Calpine is filing this Current
Report on Form 8-K to elaborate upon certain disclosures contained in the second
quarter  Form 10-Q  relating  to  mark-to-market  gains  recognized  on  certain
derivatives pursuant to SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities." The accompanying disclosures are intended to supplement the
information  on this topic  provided  in our Annual  Report on Form 10-K for the
year ended December 31, 2000, and in our Quarterly  Reports on Form 10-Q for the
fiscal  quarters  ended March 31, 2001,  and June 30, 2001, as well as to permit
Calpine  to  engage in  discussions  regarding  these  matters  with  investment
professionals  and other  interested  parties in accordance  with Regulation FD.
Readers are encouraged to consult these publicly filed reports for background in
understanding the information presented below.

1. How has the adoption of SFAS No. 133 impacted the Company's balance sheet?

The  Company  has  significantly  increased  the  level  of  hedging  and  other
derivative  activity  through its  subsidiary,  Calpine  Energy  Services,  L.P.
("CES").  This  increase is due to the  commercial  operation  of the  Company's
merchant power generation facilities and the growth of the CES organization. The
Company  expects  this  activity  to  continue  to  increase  as its  generation
portfolio continues to expand.

Effective January 1, 2001, the Company adopted SFAS No. 133, which significantly
expanded the types of transactions  that constitute a derivative,  which for the
Company,   were  principally   commodity   contracts  and  commodity   financial
instruments.  At June 30, 2001, the fair value of all derivatives, as defined by
SFAS  No.  133,  comprised  12% of  consolidated  assets,  14%  of  consolidated
liabilities  and 4% of consolidated  equity.  The table below traces the balance
sheet impact of this increased hedging and other derivative activity at adoption
(January 1, 2001), at March 31, 2001, and at June 30, 2001.
<TABLE>
<CAPTION>
                                                   (in thousands)
                                                        2001
                                       -----------------------------------------
                                       January 1*      March 31*       June 30
                                       ----------     -----------     ----------
<S>                                    <C>            <C>             <C>
Total derivative assets ..........     $  834,872     $  553,779      $1,922,504
Total derivative liabilities .....     $  771,735     $  631,260      $1,647,379
AOCI, net of tax .................     $   37,351     $  (53,570)     $  103,352
</TABLE>

* Amounts do not  reflect  the impact from our  business  combination  under the
pooling-of-interests  method of accounting  consummated on April 19, 2001,  with
Encal Energy Ltd.

The primary factors  affecting the fair value of our derivatives at any point in
time are (1) the volume of open  derivative  positions  (MMBtu and Mwh), and (2)
changing  commodity market prices,  principally for electricity and natural gas.
The total volume of open gas derivative positions increased 206% from January 1,
2001 to March 31, 2001, and 103% from March 31, 2001 to June 30, 2001, while the
total volume of open power derivative  positions  increased 53% and 147% for the
same periods.  In that prices for electricity and natural gas are among the most
volatile of all  commodity  prices,  there may be  material  changes in the fair
value of the Company's  derivatives over time. For example,  on adoption of SFAS
No. 133 the balance in accumulated other comprehensive income (loss) ("AOCI") in
the stockholders' equity section of the balance sheet, related to derivative and
hedging  activity,  was $37.4  million,  while at March 31, 2001, the balance in
AOCI was $(53.6)  million and at June 30,  2001,  the balance in AOCI was $103.4
million.  These changes are primarily related to changes in the market prices of
natural gas and  electricity  during these periods and the increase in volume of
open  derivative  transactions.  Under SFAS No. 133,  the change  since the last
balance  sheet  date in the total  value of the  derivatives  (both  assets  and
liabilities) is reflected either in other  comprehensive  income (loss) ("OCI"),
net of tax,  or in the  statement  of  operations  as an item  (gain or loss) of
current  earnings.  For the Company,  the majority of the balance in AOCI, as of
the respective  balance sheet dates,  represented  the  unrealized  gain or loss
associated with commodity cash flow hedging transactions.

2. What determines whether a gain or loss in the value of a derivative goes into
AOCI on the balance sheet or is charged to current  earnings in the statement of
operations?

When we enter into a  transaction,  we apply the criteria under SFAS No. 133 and
EITF  98-10,  "Accounting  for  Contracts  Involved  in Energy  Trading and Risk
Management  Activities," to determine the appropriate  accounting  treatment for
the transaction.  First, we assess whether the transaction meets the criteria of
a derivative  under SFAS No. 133. If so, we next assess whether the criteria for
classification  of the derivative as a normal  purchase or sale has been met, in
which case the transaction can be documented as normal and thereby exempted from
the basic accounting  requirements of SFAS No. 133. If the transaction qualifies
for  and is  documented  as a  normal  purchase  or  sale,  traditional  accrual
accounting  will apply.  An example of this is when we use a derivative  to sell
power from one of our power generation facilities.

If the  transaction  does not meet the criteria as a normal purchase or sale, we
determine whether the transaction should be designated as a hedge of a cash flow
or fair value exposure.  An example of this is when we use a derivative to hedge
an index priced  (variable  cash flow) power sales  agreement.  In the case of a
cash flow hedge,  only the  ineffective  portion of the derivative is charged to
current  earnings with the remainder  recorded in OCI. If the  derivative is not
designated and documented as a hedge,  it is  marked-to-market  through  current
earnings.

In cases where a  transaction  is not a derivative  and therefore not subject to
SFAS No. 133, we must  examine  whether it is,  nonetheless,  an energy  trading
contract  in which  case the  transaction  would be  subject  to  mark-to-market
accounting  through  current  earnings  under  EITF  98-10.  If it is  neither a
derivative nor an energy trading  contract  under EITF 98-10,  then  traditional
accrual  accounting  applies,  and revenue or expense is recorded  when physical
delivery takes place or the transaction otherwise settles.

While the  accounting  requirements  of SFAS No. 133 and EITF 98-10 require some
judgment in their application,  the Company applies these standards consistently
so that similar  transactions  entered into with similar  objectives receive the
same accounting treatment.

In our  business  there are two primary  situations  when,  after  applying  the
criteria  described above, a derivative is subject to mark-to-market  accounting
through current earnings: (1) if the intent of the transaction is to profit from
changes in commodity  prices (i.e.  an energy  trading  contract);  or (2) if we
enter into a contract to sell power in a market where we do not have  generation
assets  (i.e.  it is  neither  a hedge  nor a  normal  purchase  or  sale).  The
determination   is  documented  at  the  consummation  of  the  transaction  and
consistently applied thereafter.

3. Why did the mark-to-market activity of the Company related to derivatives not
designated as hedges increase substantially in the second quarter?

In the second quarter of 2001, during a period of volatility in the marketplace,
CES  entered   into  a  series  of  related   transactions   with  a  number  of
counterparties to sell and buy power over a multi-year  period.  These contracts
were  derivatives  but  did  not  meet  the  criteria  as  discussed  above  for
classification as either normal purchases and sales or as hedges. Therefore, the
Company marked the entire series of transactions to market.  These  transactions
are fixed price and, as of June 30, 2001,  are balanced in terms of purchase and
sales volumes.  As a result,  any future changes in the related commodity prices
will result in equal and offsetting gains and losses on the respective commodity
contracts,  resulting in no net future  impact on the Company's  earnings  other
than changes due to time value  factors,  which are not expected to be material.
This  treatment  is  consistent  with the  policies we have  followed  since the
adoption of SFAS No. 133, as described above, and does not represent a change in
accounting method. The  mark-to-market  impact on these contracts  comprised the
majority of the net pre-tax gains of $67.2 million and $69.7 million recorded in
electric  generation  and  marketing  revenue for the three and six months ended
June 30, 2001, respectively.

We also profited from the  volatility of gas prices for the three and six months
ended June 30, 2001,  and  recorded  mark-to-market  gains of $27.4  million and
$34.5 million,  respectively,  relating to derivatives not designated as hedges.
The Company expects that it will continue to enter into similar  transactions in
the future,  consistent  with the rapid growth in the level of hedging and other
derivative  activity,  although no assurance  can be given that similar  results
will  be  achieved  in the  future,  and the  timing  and  availability  of such
opportunities  will  likely  vary due to various  factors  such as the degree of
market volatility.


SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.


                               CALPINE CORPORATION


                          By: /s/ Charles B. Clark, Jr.
                              -------------------------
                              Charles B. Clark, Jr.
                      Senior Vice President and Controller
                            Chief Accounting Officer
September 4, 2001


