EXHIBIT 10.4







September 5, 2003



To:     Lenders under the Calpine Corporation Credit Agreement

From:   Calpine Corporation

Re:     Technical Correction to Amendment and Waiver Request Concerning Proposed
        South Point  and  Broad River Stock  Pledges  (the "Amendment and Waiver
        Request")

Ladies and Gentlemen:

It has come to our attention that a technical correction needs to be made to the
Amendment and Waiver Request dated August 28, 2003.

Background:  In March of 2003 (prior to the July 16, 2003 closing of the Amended
and Restated Credit  Agreement),  the contract  entered into with the California
Department of Water  Resources in connection  with Calpine's 11 LM-6000  peaking
units  (the  "California  Peaker  Contract")  was  assigned  by  Calpine  Energy
Services,  L.P. ("CES") to Calpine California Equipment Finance Company,  LLC, a
non-CES subsidiary of Calpine  Corporation,  in connection with the non-recourse
bank financing of Calpine's California peaking projects.  In connection with the
proposed  non-recourse bond financing of these peaking units, which is scheduled
to close  the  week of  September  8, the  California  Peaker  Contract  will be
transferred  to Gilroy  Energy  Center,  LLC,  another  subsidiary  of  Calpine.
However,  primarily  for tax  planning  purposes,  such  transfer  required  the
rescission of the initial  assignment,  such that the California Peaker Contract
has  temporarily  resided at CES for a short  period  after the July 16 closing.
Consequently,  as a  technical  matter,  this  contract  would  fall  within the
existing  definition of "CES Asset", even though it was not a "CES Asset" at the
time of closing the Amended and Restated Credit Agreement and was never intended
to be part of the group of  contracts  owned by CES. To avoid the  unintentional
application of the Credit Agreement  provisions  relating to the transfer of CES
Assets,  the definition of "Designated CES Contracts" will need to be amended to
include the California  Peaker Contract (and thus exclude the California  Peaker
Contract from the definition of CES Assets in relevant respects).

Amendment:  With the  approval  of the  requisite  Lenders,  the  definition  of
"Designated  CES  Contracts"  will be deemed  amended  to read as  follows  (new
language is underlined):

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     "Designated CES Contracts"  means (i) the agreements  pledged to secure the
CCFCII  Credit  Agreement  and  listed on Annex B to the  Amendment  and  Waiver
Request  Concerning  Proposed South Point and Broad River Stock  Pledges,  dated
August 28, 2003, from the Borrower to the Lenders and (ii)  Confirmation  Letter
No. 3 related to 11 LM-6000  peaking units,  entered into pursuant to the Master
Power  Purchase and Sale  Agreement  dated as of April 22, 2002 between  Calpine
Energy Services, L.P. and the State of California Department of Water Resources,
as amended and assigned from time to time.

     Please  provide  your  institution's  acknowledgment  and  approval to this
Technical  Correction  at your earliest  opportunity  by sending an email or fax
message   to  the   attention   of   Isabel   Abella  of   Scotia   Capital   at
isabel_abella@scotiacapital.com  (fax number: (212) 225-5172),  reaffirming your
institution's  execution of the Amendment and Waiver Request, as amended by this
Technical  Correction,  by 5:00 p.m. (Eastern Time), Monday,  September 8, 2003.
Should you have any questions,  please feel free to contact me at  408-792-1107,
Rick Dean of Scotia  Capital at  212-225-5276  or Alok Garg of Scotia Capital at
212-225-5463.

Thank you for your cooperation with this request.

Sincerely,
CALPINE CORPORATION

/s/ MICHAEL THOMAS
------------------
Michael Thomas
Senior Vice President and Treasurer


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