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 16, 2004


                               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





ITEM 5.  OTHER EVENTS

NEWS RELEASE                                             CONTACTS:  408-995-5115
                                   Media Relations:  Katherine Potter, Ext. 1168
                                    Investor Relations:  Rick Barraza, Ext. 1125


              Calpine to Sell Canadian Gas Assets for $625 Million

     (SAN JOSE,  Calif.)  /PR  Newswire - First  Call/ Aug.  16,  2004 - Calpine
Corporation [NYSE:CPN] has entered into an agreement to sell all of its Canadian
natural gas reserves and petroleum assets to PrimeWest Energy Trust  (PrimeWest)
for a total purchase price of $Cdn825 million, or approximately  $US625 million,
less  adjustments  to  reflect  a July 1,  2004  effective  date.  These  assets
currently  represent  approximately  221 billion cubic feet equivalent (bcfe) of
proved reserves, producing approximately 61 million cubic feet equivalent of net
gas per day  (mmcfed).  Also  included  in this  sale is  Calpine's  25  percent
interest in  approximately  80 bcfe of proved reserves (net of royalties) and 32
net mmcfed owned by the Calpine Natural Gas Trust.  Calpine expects to close the
sale in early September 2004, pending  regulatory  approval and other conditions
of closing.

     "This is an excellent  opportunity for Calpine to capture significant value
for our natural gas assets during attractive market  conditions," stated Calpine
Chief  Financial  Officer  Bob  Kelly.  "And it  puts us well on our way  toward
achieving  our  goal of  having  $3  billion  of cash and  liquidity  on hand by
year-end."

     Net  proceeds  from this sale will be used to repay the amount  outstanding
under the existing $500 million first lien indebtedness, with remaining proceeds
to be used in accordance  with the asset sale  provisions of Calpine's  existing
bond   indentures.   Following  the   repayment  of  its  existing   first  lien
indebtedness,  Calpine expects to issue up to approximately  $700 million of new
first lien debt. Calpine retained Waterous & Co. as its advisor for the sale.

     Calpine Corporation, celebrating its 20th year in power, is a leading North
American power company  dedicated to providing  electric power to customers from
clean,  efficient,  natural  gas-fired and geothermal power plants.  The company
generates  power at plants it owns or leases in 21 states in the United  States,
three  provinces in Canada and in the United  Kingdom.  The company is listed on
the S&P 500 and was  named  FORTUNE's  2004 Most  Admired  Energy  Company.  The
company  was  founded  in 1984 and is  publicly  traded  on the New  York  Stock
Exchange under the symbol CPN. For more information, visit www.calpine.com.

     This  news  release  discusses  certain  matters  that  may  be  considered
"forward-looking" statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as  amended,  including  statements  regarding  the  intent,  belief or  current
expectations  of  Calpine   Corporation  ("the  Company")  and  its  management.
Prospective investors are cautioned that any such forward-looking statements are
not  guarantees  of  future  performance  and  involve  a number  of  risks  and
uncertainties  that could  materially  affect  actual  results  such as, but not
limited to, (i) the timing and extent of changes in commodity prices for energy,
particularly  natural  gas and  electricity;  (ii) other risks  identified  from
time-to-time in the Company's reports and registration statements filed with the
SEC, including the risk factors identified in its Annual Report on Form 10-K for
the year ended  December 31, 2003 and in its  Quarterly  Report on Form 10-Q for
the  quarter  ended  June 30,  2004,  which  can also be found on the  Company's
website at www.calpine.com. All information set forth in this news release is as
of today's date, and the Company undertakes no duty to update this information.









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

Date: August 17, 2004