EXHIBIT 10.7


                INCREASE IN TERM B LOAN COMMITMENT AMOUNT NOTICE


To the Revolving Lenders party to the
hereinafter described Credit Agreement

     Re: Calpine Corporation

Gentlemen and Ladies:

     This  notice is  delivered  to you  pursuant  to Section  2.8 of the Credit
Agreement,  dated as of March 8, 2002 (together with all amendments from time to
time made  thereto,  the  "Credit  Agreement"),  among  Calpine  Corporation,  a
Delaware  corporation (the "Borrower"),  certain financial  institutions and The
Bank Of Nova Scotia and Citicorp USA, Inc.  ("Citi"),  as administrative  agents
(the  "Administrative  Agents").  Unless otherwise defined herein or the context
otherwise  requires,  terms used herein have the meanings provided in the Credit
Agreement.

     Pursuant to a letter dated May 31, 2002,  the Borrower  requested,  and the
Lead Term B Arrangers approved, an increase in the Term B Loan Commitment Amount
by  $400,000,000  (the "Increased  Amount").  As of May 31, 2002, the applicable
Percentages  of each Lender  shall be  adjusted to give effect to the  Increased
Amount and the Revolving  Commitment  Amount of each  Revolving  Lender shall be
reduced as follows.

     Pursuant to the Fee Letter,  until the Revolving  Commitment Amount of each
of the Revolving Lead Arrangers have been reduced to $100,000,000, the Increased
Amount  shall be applied to the ratable  reduction of the  Revolving  Commitment
Amount of each of the Revolving Lead  Arrangers.  Once the Revolving  Commitment
Amount  of each of the  Revolving  Lead  Arrangers  has  been  so  reduced,  the
remaining  Increased  Amount  shall be applied to the ratable  reduction  of the
Revolving Commitment Amount of the Revolving Lead Arrangers and Toronto Dominion
(Texas) Inc. The new schedule  reflecting the revised Revolving  Commitments and
Revolving  Percentages of each Revolving  Lender are attached hereto as Schedule
II.

                                            THE BANK OF NOVA SCOTIA, as
                                            Administrative Agent


                                            By:  /s/ KEMP LEONARD
                                                 -------------------------------
                                                 Name:  Kemp Leonard
                                                        ------------------------
                                                 Title: Director
                                                        ------------------------


                                            CITICORP USA, INC., as
                                            Administrative Agent


                                            By:  /s/ DAVE R. GONCHER
                                                 -------------------------------
                                            Name:  Dave R. Goncher
                                                   -----------------------------
                                            Title: Director
                                                   -----------------------------






                                                                     SCHEDULE II


                                                       Revolving      Revolving
Lender                                                 Commitment     Percentage
- ------                                                 -----------    ----------

The Bank of Nova Scotia                                $80,000,000      13.333%
Citicorp USA, Inc.                                     $80,000,000      13.333%
Bayerische Landesbank Girozentrale                     $80,000,000      13.333%
Bankers Trust Company                                  $80,000,000      13.333%
Credit Suisse First Boston, Cayman Islands Branch      $80,000,000      13.333%
Bank of America, National Association                  $80,000,000      13.333%
Toronto Dominion (Texas) Inc.                          $80,000,000      13.333%
ING (U.S.) Capital LLC                                 $40,000,000       6.667%