SECURITIES AND EXCHANGE COMMISSION

                    WASHINGTON, D.C.  20549

                           FORM 10-K

       Annual Report Pursuant to Section 13 or 15 (d) of
              the Securities Exchange Act of 1934

          For the fiscal year ended December 31, 1998
                 Commission File No. 333-00608

           CE CASECNAN WATER AND ENERGY COMPANY, INC.
     (Exact name of registrant as specified in its charter)

           Philippines                   Not applicable
          (State or other                (IRS Employer
     jurisdiction of incorporation      Identification No.)
          or organization)
                                
       6750 Ayala Avenue, 24th Floor,          Not applicable
         Makati, Manila, Philippines              (Zip Code)
               (Address of principal executive offices)

Registrant's telephone number, including area code:  (632) 892-0276

Securities registered pursuant to Section 12(b) of the Act:  N/A

Securities registered pursuant to Section 12(g) of the Act:  N/A

     Indicate by check mark whether the Registrant (1) has filed
all  reports required to be filed by Section 13 or 15(d) of  the
Securities Exchange Act of 1934 during the preceding  12  months
(or for such shorter period that the Registrant was required  to
file  such  reports), and (2) has been subject  to  such  filing
requirements for the past 90 days:

               Yes    X            No______

      Indicate by check mark if disclosure of delinquent  filers
pursuant to Item 405 of Regulation S-K is not contained  herein,
and   will  not  be  contained,  to  the  best  of  Registrant's
knowledge,   in  definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form 10-K  or  any
amendment to this Form 10-K.  [  X  ]

      All  Common  Stock of the Company is held by  the  original
shareholders.  Accordingly there is no market value.

      767,162  shares  of Common Stock, $0.038  par  value,  were
outstanding on March 23, 1999.

     Documents incorporated by reference:  N/A
<PAGE>
                        TABLE OF CONTENTS
PART I                                                          3
ITEM 1.  BUSINESS                                               3
GENERAL                                                         3
PROJECT                                                         3
 THE EXPANDING PHILIPPINE AGRICULTURE SECTOR AND POWER MARKETS  5
 AGRICULTURE                                                    5
 POWER                                                          6
TERMS OF THE SECURITIES                                         6
 GENERAL                                                        6
 PAYMENT OF PRINCIPAL AND INTEREST                              6
 PRIORITY OF PAYMENTS                                           7
 DEBT SERVICE RESERVE FUND                                      8
 OPTIONAL REDEMPTION                                            8
 MANDATORY REDEMPTION                                           8
 CHANGE IN CONTROL PUT                                          8
 DISTRIBUTIONS                                                  9
 RANKING AND SECURITY FOR THE SECURITIES                        9
 RATINGS                                                        9
 NATURE OF RECOURSE ON THE SECURITIES                           9
 INCURRENCE OF ADDITIONAL DEBT                                 10
 PRINCIPAL COVENANTS                                           11
 INSURANCE                                                     11
 REGULATORY MATTERS                                            12
 EMPLOYEES                                                     12
ITEM 2.  PROPERTIES                                            12
ITEM 3.  LEGAL PROCEEDINGS                                     12
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS   13
PART II                                                        14
ITEM 5.  MARKET FOR COMPANY'S EQUITY AND RELATED STOCKHOLDER
MATTERS                                                        14
ITEM 6.  SELECTED FINANCIAL DATA                               14
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS                            14
ITEM 7A.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET
RISK                                                           16
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA           18
          REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS             19
          BALANCE SHEETS                                       20
          STATEMENTS OF OPERATIONS                             21
          STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY        22
          STATEMENTS OF CASH FLOWS                             23
          NOTES  TO FINANCIAL STATEMENTS                       24
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE                            30
PART III                                                       31
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY      31
ITEM 11.  EXECUTIVE COMPENSATION                               33
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT                                                     33
 DESCRIPTION OF CAPITAL STOCK                                  33
 PRINCIPAL HOLDERS                                             33
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS       34
SIGNATURES                                                     35
INDEX TO EXHIBITS                                              36
<PAGE>
PART I

Item 1.  Business

General

     CE Casecnan Water and Energy Company, Inc. ("Company" or "CE
Casecnan") is a privately held Philippine corporation  formed  in
September  of 1994 solely to develop, construct, own and  operate
the    Casecnan   Project,   a   multi-purpose   irrigation   and
hydroelectric   power   facility  with  a   rated   capacity   of
approximately 150 Megawatts ("MW") located on the island of Luzon
in  the  Republic  of  the Philippines (the "Casecnan  Project").
After  the completion of the aforementioned project, the  Company
is  expected  to  be  owned  at  least  70%  (subject  to  upward
adjustment  based  upon  the  actual economics  of  the  Casecnan
Project  at commencement of commercial operations) by MidAmerican
Energy Holdings Company, the successor of CalEnergy Company, Inc.
("MidAmerican"), through its wholly owned subsidiary CE  Casecnan
Ltd.   The ownership percentage held by the minority shareholders
may  be reduced in certain circumstances and such reduction would
result in a corresponding increase in the ownership percentage of
the Company held by affiliates of MidAmerican.

      The Securities (described herein) are recourse only to  the
Company.   MidAmerican has not guaranteed directly or  indirectly
the payment or performance of any Company obligations.

      The Company's principal executive office is located at 6750
Ayala Avenue, 24th Floor, Makati, Metro Manila, Philippines,  and
its  telephone  number is 632 892 0276.  The Company's  principal
office  will be located in Pantabangan in the Province  of  Nueva
Ecija, Philippines.

Project

      The Casecnan Project is located in the central part of  the
island   of  Luzon.   It  will  consist  generally  of  diversion
structures in the Casecnan and Taan Rivers that will capture  and
divert  excess  water  in  the Casecnan  watershed  by  means  of
concrete,  in-stream  diversion weirs  and  transfer  that  water
through  a  transbasin  tunnel  of  approximately  23  kilometers
(including the intake adit from the Taan to the Casecnan  River),
with  a  diameter  of  approximately 6.5 meters  to  an  existing
underutilized water storage reservoir at Pantabangan.  During the
water  transfer,  the  elevation  differences  between  the   two
watersheds will allow electrical energy to be generated at a  new
150  net MW rated capacity power plant, which will be constructed
in  a  underground powerhouse cavern located at the  end  of  the
water tunnel.  A tailrace discharge tunnel of approximately three
kilometers will deliver water from the water tunnel and  the  new
powerhouse  to  the  Pantabangan Reservoir, providing  additional
water  for  irrigation  and increasing the  potential  electrical
generation at two downstream existing hydroelectric facilities of
the Philippine National Power Corporation ("NPC"), the government-
owned and controlled corporation that is the primary supplier  of
electricity  in  the  Philippines.   Since  the  water  has  been
determined  to  remain  suitable for  irrigation  throughout  the
Casecnan   Project   operations  of  capturing,   diverting   and
transferring  the  water, other than removing  sediments  at  the
diversion structures, no treatment will be required.  Once in the
reservoir at Pantabangan, the water will be under the control of,
and   for   the   use  of  the  Philippine  National   Irrigation
Administration ("NIA").

      The Casecnan Project's diversion structures will be capable
of  storing flows from the Casecnan and Taan Rivers over a number
of  hours,  and  then discharging that stored water  through  the
transbasin  tunnel and new powerhouse during the 12  hours  (8:00
a.m.  through  8:00 p.m.) coinciding with peak electrical  demand
hours.   Tunnel  flows  and  water depths  behind  the  diversion
structures will be regulated by in-tunnel valves in front of  the
powerhouse turbines controlled by the operators at the powerhouse
control room.

     In early 1994, President Fidel Ramos recognized the need for
an  irrigation  and  hydroelectric  project  that  would  provide
increased water flows for irrigation to the rice growing area  of
Central   Luzon,  would  be  environmentally  sound,  technically
feasible  and economically viable, and would involve no  flooding
or  relocation of local residents.  At that time, he directed the
<PAGE>
Philippine  Department of Agriculture and NPC  to  work  together
with  other  interested agencies to develop a combined irrigation
and  hydroelectric project.  Shortly thereafter,  the  Philippine
government  was approached by the Company with a proposal  for  a
project  to  be  developed in the Casecnan area on  a  build-own-
operate-transfer  ("BOOT") basis, that is, an  arrangement  under
which  the  Company as developer would agree to  build,  own  and
operate the Casecnan Project during the construction period and a
twenty-year   cooperation  period,  after  which  ownership   and
operation of the Project would be transferred to the NIA and  NPC
at  no  cost.   After  conclusion of a  public  solicitation  for
competing  proposals,  NIA  selected  the  Company  as  the  BOOT
developer  and  entered  into  the  Project  Agreement  with  the
Company.  The Casecnan Project was subsequently designated a high
priority  project  under Republic Act No.  529  by  the  National
Economic and Development  Authority of the Philippines.

      CE  Casecnan is developing the Casecnan Project  under  the
terms  of  the  Project Agreement between CE  Casecnan  and  NIA.
Under  the  Project Agreement, CE Casecnan will develop,  finance
and  construct the Casecnan Project over the construction period,
and  thereafter own and operate the Casecnan Project for 20 years
(the  "Cooperation Period").  During the Cooperation Period,  NIA
is obligated to accept all deliveries of water and energy, and so
long  as  the Casecnan Project is physically capable of operating
and  delivering in accordance with agreed levels set forth in the
Project Agreement, NIA will pay CE Casecnan a guaranteed fee  for
the  delivery of water and a guaranteed fee for the  delivery  of
electricity,  regardless of the amount of  water  or  electricity
actually  delivered.  In addition, NIA will pay  a  fee  for  all
electricity  delivered in excess of a threshold amount  up  to  a
specified amount.  NIA will sell the electricity it purchases  to
NPC,  although NIA's obligations to CE Casecnan under the Project
Agreement  are not dependent on NPC's purchase of the electricity
from  NIA.  All fees to be paid by NIA to CE Casecnan are payable
in  U.S. dollars.  The guaranteed fees for the delivery of  water
and  energy  are  expected  to provide approximately  70%  of  CE
Casecnan's revenues.

      The  Project Agreement provides for additional compensation
to  CE  Casecnan upon the occurrence of certain events, including
increases  in Philippine taxes and adverse changes in  Philippine
law.   Upon the occurrence and during the continuance of  certain
force majeure events, including those associated with Philippines
political  action,  NIA  may be obligated  to  buy  the  Casecnan
Project  from CE Casecnan at a buy out price expected  to  be  in
excess  of  the aggregate principal amount of the outstanding  CE
Casecnan  debt  securities,  together  with  accrued  but  unpaid
interest.   At  the end of the Cooperation Period,  the  Casecnan
Project  will  be  transferred to NIA and NPC for  no  additional
consideration on an "as is" basis.

      The  Republic of the Philippines has provided a Performance
Undertaking  under  which  NIA's obligations  under  the  Project
Agreement  are  guaranteed by the full faith and  credit  of  the
Republic  of  the  Philippines.  The Project  Agreement  and  the
Performance Undertaking provide for the resolution of disputes by
binding  arbitration in Singapore under international arbitration
rules.

      NIA's  payment obligations under the Project Agreement  are
expected  to be the Company's sole source of operating  revenues.
Because  of the Company's dependence on NIA, any material failure
of NIA to fulfill its obligations under the Project Agreement and
any  material  failure  of the Republic  of  the  Philippines  to
fulfill  its obligations under the Performance Undertaking  would
significantly  impair  the ability of the  Company  to  meet  its
obligations under the Securities.

      CE Casecnan financed a portion of the costs of the Casecnan
Project through the issuance of $125,000,000 of its 11.45% Senior
Secured  Series A Notes due 2005 (the "Series A Securities")  and
$171,500,000 of its 11.95% Senior Secured Series B Bonds due 2010
(the  "Series  B  Securities") and  $75,000,000  of  its  Secured
Floating  Rate  Notes due 2002, pursuant to  an  indenture  dated
November 27, 1995, as amended to date (the "Casecnan Indenture").

      The  Casecnan Project was being constructed pursuant  to  a
fixed-price,  date-certain,  turnkey construction  contract  (the
"Hanbo  Contract")  on  a  joint  and  several  basis  by   Hanbo
Corporation ("Hanbo") and Hanbo Engineering and Construction Co.,
Ltd.  ("HECC"), both of which are South Korean corporations.   As
of  May 7, 1997, the Company terminated the Hanbo Contract due to
defaults by Hanbo and HECC including the insolvency of each  such
<PAGE>
company.  On the same date, the Company entered into a new fixed-
price,   date   certain  turnkey  engineering,  procurement   and
construction  contract  to  complete  the  construction  of   the
Casecnan  Project (the "Replacement Contract").  The  work  under
the  Replacement  Contract  is being conducted  by  a  consortium
consisting of Cooperativa Muratori Cementisti CMC di Ravenna  and
Impresa Pizzarotti & C. Spa., working together with Siemens A.G.,
Sulzer  Hydro Ltd., Black & Veatch and Colenco Power  Engineering
Ltd. (collectively, the "Replacement Contractor").

      In  connection  with  the Hanbo Contract  termination,  the
Company tendered four certificates of drawing to Korea First Bank
("KFB") under the irrevocable standby letter of credit issued  by
KFB  as  security  under the Hanbo Contract to  pay  for  certain
transition costs and other then ascertainable damages  under  the
Hanbo  Contract.  As a result of KFB's wrongful dishonor  of  the
draw request, the Company filed an action against KFB in New York
State Court.

      On  September 2, 1997, Hanbo and HECC filed a  Request  for
Arbitration  before the International Chamber of  Commerce.   The
Request of Arbitration asserted various claims by Hanbo and  HECC
against CE Casecnan relating to the terminated Hanbo Contract and
sought  damages.   On  October 10, 1997, CE Casecnan  served  its
answer and defenses in response to the Request of Arbitration  as
well as counterclaims against Hanbo and HECC for breaches of  the
Hanbo Contract.

      On April 17, 1998, the Company and Hanbo, HECC, Hanbo Steel
Company  and KFB mutually agreed to settle the differences  among
them related to the Project. Under the settlement, KFB agreed  to
pay  the  Company  $90 million and the parties discontinued  with
prejudice the pending arbitration and litigation proceedings  and
released each other from all claims arising out of the litigation
and   arbitration.   In  accordance  with  the  terms   of   such
settlement,  the  Company  received  $10  million  from  KFB   on
April  17,  1998  and  the  remaining  balance  of  $80  million,
including interest thereon, on July 3, 1998.

The Expanding Philippine Agriculture Sector and Power Markets

Agriculture

      The agricultural sector has played an important role in the
sustained  growth  of  the  Philippines economy,  accounting  for
approximately  23%  of  gross  domestic  product  and   employing
approximately 46% of the economically active population in  1994.
The  Philippine  government  has a policy  objective  to  provide
necessary  agriculture  infrastructure for  farmers  to  increase
productivity of important agricultural crops, such  as  rice,  in
order  to attain self-sufficiency and eliminate the need to  rely
on imports of rice which consume foreign exchange reserves.

      NIA  supports agricultural production and rural development
by  providing  water and irrigation services  to  the  Philippine
agricultural  sector.  NIA is responsible for the  implementation
of irrigation development programs and the operation, maintenance
and  administration  of all national irrigation  systems  in  the
Philippines.  One of NIA's mandates is to provide and  facilitate
the  procurement and delivery of irrigation water to  farmers  in
Central Luzon.

      The  Casecnan  watershed  is  one  of  the  last  remaining
substantial  sources  of water available  to  provide  irrigation
water  to  Central  Luzon,  the most  significant  rice-producing
region  in  the  Philippines.  NIA estimates  that  the  Casecnan
Project  will divert sufficient water to irrigate the  equivalent
of  at  least 50,000 additional hectares of agricultural land  in
the  Central  Luzon  Valley, which could  produce  an  additional
465,000  tons or more of rice per year with a direct  annual  net
production value to the Philippines of approximately 2.03 billion
pesos  (U.S.  $52  million).  The increased production  resulting
from  the  additional irrigation water is expected to  contribute
significantly  to the Philippines' goal to become self-sufficient
in rice production.
<PAGE>
Power

      According  to  NPC's 1995 Power Development Program  (1995-
2005)("PDP"), industrial growth, a rising standard of living, and
an   expanding  power  distribution  network  have  resulted   in
increased  demand for electrical power in the Philippines  by  an
average  of 6% per year since 1987.  NPC has projected that  over
the next ten years the need for additional generating capacity in
the Philippines will exceed 14,000 MW.

      With  NPC projecting that electricity demand will  increase
approximately  13%  annually between 1996-2000 and  approximately
11% annually for 2001-2005, the government of the Philippines has
taken  steps to accelerate private power investment in an attempt
to  enable  supply  to  keep up with  demand.   As  a  result  of
government  action,  many new power projects  have  come  on-line
during  the  past  two  years, but capacity shortages  are  still
anticipated  over the next several years.  Elimination  of  power
shortages through increases in production from plans such as  the
Casecnan  Project should contribute to further industrial  growth
and economic stability in the Philippines.

                     TERMS OF THE SECURITIES
General

     In   June  1996,  the  Company  exchanged  (i)  $125,000,000
aggregate  principal  amount of the Series A  Securities  for  an
equal  principal  amount  of New Series A  Securities,  and  (ii)
$171,500,000   aggregate  principal  amount  of  the   Series   B
Securities  for an equal amount of New Series B Securities.   The
Series  A  Securities  and  Series  B  Securities  are  sometimes
referred to herein as the "Old Securities", and the New Series  A
Securities and the New Series B Securities are sometimes referred
to  herein as the "New Securities".  The New Securities  are  the
obligations  of  the Company evidencing the same indebtedness  as
the  Old Securities and will be entitled to the benefits  of  the
Indenture,  which  governs both the Old Securities  and  the  New
Securities.   The  form  and terms (including  principal  amount,
interest  rate,  maturity and ranking) of the New Securities  are
the same as the form and terms of the Old Securities, except that
(i)  the New Securities have been registered under the Securities
Act and therefore will not be subject to certain restrictions  on
transfer  applicable  to  the  Old Securities  and  will  not  be
entitled to registration rights, and (ii) the New Securities will
not provide for any increase in the interest rate thereon.

      Simultaneously with the offering of the Old Securities  the
Company  also  issued  and sold $75,000,000  aggregate  principal
amount of LIBOR Plus 3.00% Senior Secured Floating Rate Notes Due
November  15, 2002 ("FRNs") that rank pari passu with  and  share
the  collateral  on a pro rata basis with the Old Securities  and
the  New  Securities  and are entitled to  the  benefits  of  the
Indenture and the Depositary Agreement.  The Old Securities,  New
Securities  and FRNs are collectively referred to herein  as  the
"Securities".

     The Securities are direct obligations of the Company,
secured by the Company Collateral.

Payment of Principal and Interest

      Interest  on the New Securities is payable semiannually  on
each May 15 and November 15 (the "New Securities Interest Payment
Date"),  commencing  May  15, 1996,  to  the  registered  Holders
thereof at the close of business on the May 1 and November 1,  as
the  case may be, preceding each New Securities Interest  Payment
Date.   The  initial average life of the Series A Securities  was
8.84  years,  and  the  initial average  life  of  the  Series  B
Securities was 11.57 years.
<PAGE>
     The $125,000,000 principal of the 11.45% New Series A
Securities due November 15, 2005 are payable in semiannual
installments, commencing May 15, 2003, as follows:

                              Percentage of Principal
Payment Date                       Amount Payable

May 15, 2003                            13.50%
November 15, 2003                       13.50%
May 15, 2004                            17.00%
November 15, 2004                       17.00%
May 15, 2005                            19.50%
November 15, 2005                       19.50%

     The $171,500,000 principal of the 11.95% New Series B
Securities due November 15, 2010 are payable in semiannual
installments, commencing May 15, 2002, as follows:

                              Percentage of Principal
Payment Date                       Amount Payable

May 15, 2002                            2.50%
November 15, 2002                       2.50%
May 15, 2003                            2.25%
November 15, 2003                       2.25%
May 15, 2004                            2.00%
November 15, 2004                       2.00%
May 15, 2005                            1.75%
November 15, 2005                       1.75%
May 15, 2006                           10.50%
November 15, 2006                      10.50%
May 15, 2007                           11.00%
November 15,  2007                     11.00%
May 15, 2008                           11.00%
November 15, 2008                      11.00%
May 15, 2009                            4.00%
November 15, 2009                       4.00%
May 15, 2010                            5.00%
November 15, 2010                       5.00%

     The $75,000,000 principal of the FRNs due November 15, 2002
are payable in semiannual installments, commencing November 15,
2000, as follows:

                              Percentage of Principal
Payment Date                       Amount Payable

November 15, 2000                       25.00%
May 15, 2001                            19.50%
November 15, 2001                       20.00%
May 15, 2002                            18.00%
November 15, 2002                       17.50%

      The  FRNs  bear interest at LIBOR plus 3.00% per annum  and
will be payable quarterly on each February 15, May 15, August 15,
and  November  15,  commencing  on  February  15,  1996,  to  the
registered  Holders  thereof at the  close  of  business  on  the
preceding  February 1, May 1, August 1, and November  1,  as  the
case may be.

Priority of Payments

      Prior to Completion of the Casecnan Project (as defined  in
the  Turnkey  Construction Contract), all  net  proceeds  of  the
Securities and any Liquidated Damages Proceeds will be  deposited
in  the  Construction  Fund and disbursed  to  pay  for  budgeted
construction  or  restoration costs, including interest  and,  if
applicable, principal on the Securities.
<PAGE>
      After  Completion, except as otherwise  provided  for  with
respect  to mandatory redemptions and Loss Proceeds, all revenues
received  by the Company from the Project will be paid  into  the
Revenue  Fund  maintained by the Depositary (other  than  certain
peso  payments  required  to be used  for  VAT  payments  to  the
Republic of the Philippines).  Amounts paid into the Revenue Fund
shall be distributed in the following order of priority:  (a)  to
pay   Operating  and  Maintenance  Costs;  (b)  to  pay   certain
administrative costs of the agents for the Secured Parties  under
the  Financing  Documents; (c) to pay principal of,  premium  (if
any)  and  interest  on the Securities (including  any  increased
costs necessary to gross up such payments for certain withholding
taxes  and  other  assessments  to charges),  and  principal  and
interest  on  other Senior Debt, if any; (d) to  cause  the  Debt
Service  Reserve  Fund  to equal the Debt  Service  Reserve  Fund
Required  Balance,  as defined below; (e) to pay  indemnification
expenses  and other expenses to the Secured Parties  and  certain
other  costs,  and (f) to the Distribution Fund  or  Distribution
Suspense Fund, as applicable.

Debt Service Reserve Fund

      At  Completion, the Company will establish a  Debt  Service
Reserve  Fund  for the benefit of the Holders of the  Securities,
which  will  be  funded  in cash from any  remaining  shareholder
capital contributions in the Capital Contribution Fund or, to the
extent  required,  from  operating revenues  as  described  under
"Priority  of  Payments" above.  Such amounts will  be  deposited
into  the  Debt  Service Reserve Fund from time to  time  to  the
extent  required  to cause it to equal the Debt  Service  Reserve
Fund  Required  Balance  which  is intended  to  approximate  the
highest  amount of the payments of principal and interest  to  be
made  on  the  Securities during any semiannual period  over  the
subsequent three years.

Optional Redemption

      On  and  after the seventh anniversary of the  Closing  (as
defined   in  the  Trust  Indenture)  of  the  Casecnan   Project
financing,  the New Series A Securities are subject  to  optional
redemption by the Company, in whole and not in part, at par  plus
accrued interest to the Redemption Date.

      The  New  Series  B  Securities  are  subject  to  optional
redemption by the Company, at any time, in whole or in part,  pro
rata, at par plus accrued interest to the Redemption Date plus  a
premium,  calculated to "make whole" to comparable U.S.  treasury
securities plus 150 basis points.

       After  completion,  the  FRN's  are  subject  to  optional
redemption by the Company, in whole or in part, pro rata  at  par
plus accrued interest, on any FRN interest payment date.

     The Company also has the option to redeem the Securities, in
whole or in part, at par plus accrued interest at any time if, as
a  result  of  any  change  in  Philippine  tax  law  or  in  the
application  or  interpretation of Philippine tax  law  occurring
after  the  date  of issuance of the Securities, the  Company  is
required  to  pay  certain additional amounts  described  in  the
Indenture.

Mandatory Redemption

      The  Securities  are subject to mandatory  redemption,  pro
rata,  at  par plus accrued interest to the Redemption Date,  (a)
upon the receipt by the Company of Loss Proceeds that exceed  $15
million in respect of certain events of property or casualty loss
or  similar  events, unless the funds are to be utilized  by  the
Company for an Approved Restoration Plan; or (b) upon the receipt
by  the Company of proceeds realized in connection with a Project
Agreement Buyout.

Change in Control Put

      Upon the occurrence of a Change of Control each Holder will
have  the right to require the Company to repurchase all  or  any
part  of  such  Holder's Securities at a purchase price  in  cash
equal  to  101%  of  the principal amount thereof,  plus  accrued
interest  to  the  date  of repurchase  in  accordance  with  the
procedures  set  forth in the Indenture.  There is  no  assurance
that  upon  a Change in Control the Company will have  sufficient
funds to repurchase the Securities.
<PAGE>
Distributions

      Prior to Completion, there will be no distributions to  the
Company or its shareholders.  After Completion, distributions may
be  made only from and to the extent of monies on deposit in  the
Distribution  Fund or Distribution Suspense Fund.   Distributions
are   subject   to  the  prior  satisfaction  of  the   following
conditions:

      (a)   the amounts contained in the Principal Fund  and  the
Interest  Fund will be equal to or greater    than the  aggregate
scheduled  principal  and  interest  payments  next  due  on  the
Securities;

     (b)  no Default or Event of Default under the Indenture
shall have occurred and be continuing;

      (c)  the Debt Service Coverage Ratio for the preceding  12-
month  period is equal to or greater than 1.35 to 1 as  certified
by an officer of the Company;

      (d)   the  projected  Debt Service Coverage  Ratio  of  the
Securities  for  the succeeding 12-month period is  equal  to  or
greater  than  1.35  to  1, as certified by  an  officer  of  the
Company; and

     (e)  the Debt Service Reserve Fund has a balance equal to or
greater than the Debt Service Reserve Fund Required Balance.

Ranking and Security for the Securities

      The  New  Securities and the FRNs are, Senior Debt  of  the
Company  and  are  secured by (a) an assignment of  all  revenues
received  by  the  Company  from the Project;  (b)  a  collateral
assignment of all material contracts; (c) a Lien on any  accounts
and funds on deposit under the Depositary Agreement; (d) a pledge
of  approximately  100%  of the capital  stock  of  the  Company,
subject to release in certain circumstances relating to accessing
political risk insurance for the benefit of the shareholders; and
(e) a Lien on all other material assets and property interests of
the  Company.  The Securities will rank pari passu with and  will
share  the  Collateral  on a pro rata basis  with  certain  other
Senior  Secured  Debt,  if any (provided that  the  Debt  Service
Reserve Fund shall be collateral solely for the obligations under
the  Securities).  The proceeds of any political  risk  insurance
covering  the  capital  investment  will  not  be  part  of   the
collateral  for  the Securities.  While under the  Indenture  the
Company   may  incur  certain  Permitted  Debt  senior   to   the
Securities, it has no present intention to do so.

Ratings

      Moody's  and Standard & Poor's have assigned the Securities
ratings  of "Ba2" and "BB+", respectively.  There is no assurance
that  any such credit rating will remain in effect for any  given
period of time or that such rating will not be lowered, suspended
or  withdrawn  entirely by the applicable Rating Agency,  if,  in
such Rating Agency's judgment, circumstances so warrant.

Nature of Recourse on the Securities

      The Company's obligations to make payments of principal or,
premium, if any, and interest on the New Securities and FRNs are,
obligations  solely  of  the  Company  secured  solely   by   the
Collateral.   Neither  the shareholders of the  Company  nor  any
Affiliate,    including   MidAmerican,   incorporator,   officer,
director  or  employee thereof or of the Company  guaranteed  the
payment  of, nor have any obligation with respect to  payment  of
the   Securities,  except  to  the  extent  that  affiliates   of
MidAmerican  who  are  stockholders of the Company  have  pledged
their capital stock in the Company as security for the notes  and
bonds  issued  by  the  Company.  As a  result,  payment  of  the
<PAGE>
Company's obligations depends upon the availability of sufficient
revenues  from  the  Company's  business  after  the  payment  of
operating expenses.

Incurrence of Additional Debt

     The Company shall not incur any Debt other than "Permitted
Debt."  "Permitted Debt" means:

     (a)  The Securities;

      (b)   After Completion, Debt incurred to finance the making
of  capital  improvements  to the Casecnan  Project  required  to
maintain  compliance  with applicable law or anticipated  changes
therein; provided that no such Debt may be incurred unless at the
time   of   incurrence  the  Independent  Engineer  confirms   as
reasonable   (i)  a  certification  by  the  Company  (containing
customary  assumptions  and  qualifications)  that  the  proposed
capital  improvements  are  reasonably  expected  to  enable  the
Casecnan  Project to comply with applicable or anticipated  legal
requirements  and  (ii)  the calculations  of  the  Company  that
demonstrate, after giving effect to the incurrence of such  Debt,
the  minimum project Debt Service Coverage Ratio (x) for the next
four consecutive fiscal quarters, commencing with the quarter  in
which such Debt is incurred, taken as one annual period, and  (y)
for  each subsequent fiscal year through the Final Maturity Date,
will not be less than 1.3 to 1;

      (c)   After Completion, Debt incurred to finance the making
of  capital improvements to the Casecnan Project not required  by
applicable  law, so long as after giving effect to the incurrence
of  such Debt (i) no Default or Event of Default has occurred and
is  continuing, and (ii)(A) the Independent Engineer confirms  as
reasonable   (I)  a  certification  by  the  Company  (containing
customary  assumptions  and  qualifications)  that  the  proposed
capital  improvements are technically feasible  and  prudent  and
(II)  the  calculations  of the Company that  demonstrate,  after
giving  effect  to the incurrence of such Debt, (x)  the  minimum
project Debt Service Coverage Ratio for the next four consecutive
fiscal  quarters, commencing with the quarter in which such  Debt
is incurred, taken as one annual period, and in every fiscal year
thereafter,  will not be less than 1.4 to 1 and (y)  the  average
projected  Debt Service Coverage Ratio for all succeeding  fiscal
years until the Final Maturity Date will not be less than 1.7  to
1, or (B) the Rating Agencies confirm that the incurrence of such
Debt will not result in a Rating Downgrade;

      (d)  After Completion, Working Capital Debt in an aggregate
amount outstanding at any time not to exceed $5 million;

      (e)   Debt  incurred in connection with  certain  permitted
interest rate and currency hedging arrangements;

      (f)   Subordinated  Debt from Affiliates  in  an  aggregate
amount  not to exceed $150 million prior to Completion  and  $100
million after Completion, which shall be used to finance capital,
operating or other costs with respect to the Project;

     (g)  Debt incurred for purposes for which Permitted Liens
may be incurred;

      (h)   Debt  contemplated  to be incurred  pursuant  to  the
Casecnan  Project Documents, including obligations in  connection
with  any letter of credit in an aggregate amount outstanding  at
any time not to exceed $15 million;

      (i)   Purchase Money Debt and other ordinary  course  trade
Debt  to  support  operation  and  maintenance  of  the  Casecnan
Project,  in  an aggregate amount at any time not to  exceed  $35
million;

      (j)   Permitted  Refinancing Debt, if, as certified  by  an
authorized  officer  of the Company at the  time  of  incurrence,
(A)(i)  after giving effect to the incurrence of such  Debt,  (x)
the  minimum projected Debt Service Coverage Ratio for  the  next
four  consecutive fiscal quarters in which such Debt is incurred,
taken  as one annual period, and in every fiscal year thereafter,
<PAGE>
will  not  be  less  than 1.5 to 1, and (y) for  each  subsequent
fiscal  year through the Final Maturity Date, the average project
Debt  Service Coverage Ratio will not be less than 2.0 to 1,  and
(ii)  the  final maturity and average life of the  Debt  incurred
each  exceed  those  of the Debt remaining,  (B)  each  principal
payment  equals that of each corresponding principal  payment  of
the  Debt being replaced or (C) the Rating Agencies confirm  that
the  incurrence  of  such  Debt  will  not  result  in  a  Rating
Downgrade; and,

      (k)   Debt  incurred by the Company prior to Completion  as
necessary  for financing, engineering, construction,  completion,
testing  and  start-up  of  the Project  in  accordance  with  an
Approved  Completion Plan in order to achieve  Completion  ("Pre-
Completion  Additional  Debt"),  provided  that  (i)  the  Rating
Agencies confirm that the incurrence of such Debt will not result
in  a  Rating Downgrade; or (ii)(A) the Independent Engineer  has
confirmed  (subject to customary assumptions and  qualifications)
as   reasonable  the  technical  feasibility  of   the   Approved
Completion  Plan  including  a  certification  that  (subject  to
customary  assumptions and qualifications) the  net  proceeds  of
such  Debt  and  other  funds  available  to  the  Company  (from
Liquidated Damages Proceeds or otherwise) are reasonably expected
to  be  sufficient to fund the costs of reaching Completion;  and
(B)  the  Company  certifies  at the  time  of  incurrence  (with
customary  assumptions and qualifications) that (x) the  Approved
Completion  Plan is technically feasible and prudent,  (y)  after
giving  effect  to  the  incurrence of  such  Debt,  the  minimum
projected  Debt  Service  Coverage  Ratio  for  the  four  fiscal
quarters  commencing with the quarter that commences  immediately
after  the projected date of commercial operation of the Casecnan
Project,  taken  as one annual period, and in every  fiscal  year
thereafter, will not be less than 1.3 to 1, and (z) after  giving
effect  to  incurrence of such Debt, the average  projected  Debt
Service Coverage Ratio for all succeeding Fiscal Years until  the
Final Maturity Date will not be less than 1.5 to 1.

Principal Covenants

     Principal covenants under the Indenture require the Company,
subject  to  certain exceptions and qualifications,  (a)  not  to
incur  (i)  any Debt except Permitted Debt or (ii) any Lien  upon
any  of its assets except Permitted Liens; (b) not to enter  into
any  transaction of merger or consolidation, change its  form  of
organization, liquidate, wind-up or dissolve itself; (c)  not  to
enter  into  non-arm's  length transactions  or  agreements  with
Affiliates;  (d)  not  to engage in any business  other  than  as
contemplated  by  the Indenture; (e) not to  enter  into  certain
change  orders under the Turnkey Construction Contract  or  amend
the  Approved  Construction Budget and Schedule (or  an  Approved
Completion  Plan),  or amend, terminate or otherwise  modify  any
material  Project  Document to which it is  a  party,  except  as
permitted under the Indenture; (f) not to sell, lease or transfer
any property or assets material to the Casecnan Project except in
the  ordinary  course of business; (g) to construct the  Casecnan
Project  in accordance with the Approved Construction Budget  and
Schedule;  (h)  to operate and maintain the Casecnan  Project  in
accordance  with  the Approved Operation and Maintenance  Budget;
(i)  to  maintain insurance as required under the Indenture;  and
(j) to enter into an interest rate agreement for the FRNs, within
30 days of Closing, at a LIBOR cap of up to 7.5%.

Insurance

     The Company maintains insurance with respect to the Casecnan
Project of a type and in such amounts as are generally carried by
companies  engaged  in  similar  businesses  and  owning  similar
projects  that are financed in a similar manner.  These coverages
will  include casualty insurance, including flood and  earthquake
coverage,  business  interruption insurance, primary  and  excess
liability    insurance,   automobile   insurance   and    workers
compensation insurance.  However, the proceeds of such  insurance
may not be adequate to cover reduced revenues, increased expenses
or  other liabilities arising from the occurrence of catastrophic
events.   Moreover, there can be no assurance that such insurance
coverage   will  be  available  in  the  future  at  commercially
reasonable  rates or that the amounts for which the Company  will
be insured will cover all losses.  Nevertheless, the Company will
not  reduce  or  cancel  coverages if  the  Insurance  Consultant
determines  it  is  not  reasonable to do  so  and  insurance  is
available on commercially reasonable terms.
<PAGE>
Regulatory Matters

     The  Company is subject to a number of Philippine  statutory
and  regulatory  standards and required and desirable  approvals,
including those relating to energy and environmental laws.   Many
permits  and regulatory approvals are required and desirable  for
the construction and operation of the Casecnan Project.  A number
of  these  permits  and regulatory approvals have  not  yet  been
obtained.  Some of the permits and regulatory approvals that have
been obtained contain conditions, and a number of the permits and
approvals not yet obtained may contain conditions when  they  are
issued.   Delay in receipt of or failure to obtain these  permits
or  approvals or to satisfy any of these conditions  could  delay
completion of the construction of the Casecnan Project,  restrict
the  operation  of the Casecnan Project, or result in  additional
costs   or  taxes.   The  adoption  of  new  laws,  policies   or
regulations,  or changes in the interpretation or application  of
existing laws, policies and regulations, that modify the  present
regulatory  environment could have a material adverse  effect  on
the  Company's  ability  to construct  or  operate  the  Casecnan
Project and could trigger the Company's right to sell the Project
to  NIA.   Upon  such  sale, the Securities will  be  subject  to
mandatory redemption.

Employees

     After Completion, the Casecnan Project is expected to employ
approximately  25 people, consisting of operations,  maintenance,
logistics,  compliance,  and  engineering  personnel.    At   the
powerhouse  control  room,  personnel will  monitor,  direct  and
control  the  operations and maintenance of  the  whole  Casecnan
Project.  The control room will be staffed 24 hours per  day  and
will  be  the contact point for the Casecnan Project's  customers
and  others.   At  the diversion structures,  personnel  will  be
responsible to ensure that the trash racks at the tunnel  intakes
are  kept clean and maintained and that excessive sediment build-
up behind the structure is prevented.

Item 2.  Properties

CE Casecnan does not separately own or lease office space but has
arranged for a separate suite at the offices of MidAmerican's
affiliate in Manila.

Item 3.  Legal Proceedings

      The  Casecnan Project was being constructed pursuant  to  a
fixed-price,  date-certain,  turnkey construction  contract  (the
"Hanbo  Contract")  on  a  joint  and  several  basis  by   Hanbo
Corporation ("Hanbo") and Hanbo Engineering and Construction Co.,
Ltd.  ("HECC"), both of which are South Korean corporations.   As
of  May 7, 1997, the Company terminated the Hanbo Contract due to
defaults by Hanbo and HECC including the insolvency of each  such
company.  On the same date, the Company entered into a new fixed-
price,   date   certain  turnkey  engineering,  procurement   and
construction  contract  to  complete  the  construction  of   the
Casecnan  Project (the "Replacement Contract").  The  work  under
the  Replacement  Contract  is being conducted  by  a  consortium
consisting of Cooperativa Muratori Cementisti CMC di Ravenna  and
Impresa Pizzarotti & C. Spa., working together with Siemens A.G.,
Sulzer  Hydro Ltd., Black & Veatch and Colenco Power  Engineering
Ltd. (collectively, the "Replacement Contractor").

      In  connection  with  the Hanbo Contract  termination,  the
Company tendered four certificates of drawing to Korea First Bank
("KFB") under the irrevocable standby letter of credit issued  by
KFB  as  security  under the Hanbo Contract to  pay  for  certain
transition costs and other then ascertainable damages  under  the
Hanbo  Contract.  As a result of KFB's wrongful dishonor  of  the
draw request, the Company filed an action against KFB in New York
State Court.

      On  September 2, 1997, Hanbo and HECC filed a  Request  for
Arbitration  before the International Chamber of  Commerce.   The
Request of Arbitration asserted various claims by Hanbo and  HECC
against CE Casecnan relating to the terminated Hanbo Contract and
sought  damages.   On  October 10, 1997, CE Casecnan  served  its
answer and defenses in response to the Request of Arbitration  as
well as counterclaims against Hanbo and HECC for breaches of  the
Hanbo Contract.
<PAGE>
      On April 17, 1998, the Company and Hanbo, HECC, Hanbo Steel
Company  and KFB mutually agreed to settle the differences  among
them related to the Project. Under the settlement, KFB agreed  to
pay  the  Company  $90 million and the parties discontinued  with
prejudice the pending arbitration and litigation proceedings  and
released each other from all claims arising out of the litigation
and   arbitration.   In  accordance  with  the  terms   of   such
settlement,  the  Company  received  $10  million  from  KFB   on
April  17,  1998  and  the  remaining  balance  of  $80  million,
including interest thereon, on July 3, 1998.

Item 4.  Submission of Matters to a Vote of Security Holders.

     Not Applicable.
<PAGE>
PART II

Item  5.   Market  for  Company's Equity and Related  Stockholder
Matters.

     Not Applicable.

Item 6.  Selected Financial Data

Dollars in Thousands Except Per Share Amounts


                                          Year Ended December 31,
                                1998        1997        1996      1995
Total revenue                 $19,533    $19,786      $25,611   $ 2,494
Net income (loss) to common
    stockholders                  381    (11,264)     (13,211)   (1,200)
Net income (loss) per share      0.50     (14.68)      (17.22)    (2.09)
Total assets                  553,433    491,912      490,162   501,160
Total liabilities             454,891    393,751      380,737   378,524
Notes and bonds payable       371,500    371,500      371,500   371,500
Stockholders' equity           98,542     98,161      109,425   122,636

Item  7.   Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations

Dollars in thousands, expect per share amounts

Results of Operations:

   The  Company  is  in the construction stage and  has  not  yet
started  commercial  operations as of  December  31,  1998.   The
quarter  and year ended December 31, 1998 revenue of  $4,330  and
$19,533,  respectively, consists of interest income on  cash  and
investment  balances.  The quarter and year  ended  December  31,
1998  interest expense of $11,023 and $45,028, respectively, less
amounts  capitalized  of  $7,932 and $27,161,  respectively,  and
amortization   of   bond  issue  costs  of   $295   and   $1,179,
respectively,  are related to the notes and bonds payable  issued
by the Company in the fourth quarter of 1995.

Liquidity and Capital Resources:

      In  November  1995  the Company closed  the  financing  and
commenced  construction  of  the  Casecnan  Project,  a  combined
irrigation and 150 net MW hydroelectric power generation  project
located  in  the  central  part of the island  of  Luzon  in  the
Republic of the Philippines.

      CE  Casecnan, which is expected to be indirectly  owned  at
least  70%  by  MidAmerican, is developing the  Casecnan  Project
under  the  terms of the Project Agreement ("Project  Agreement")
between  CE  Casecnan and the National Irrigation  Administration
("NIA").   Under the Project Agreement, CE Casecnan will develop,
finance  and construct the Casecnan Project over the construction
period,  and thereafter own and operate the Casecnan Project  for
20  years  (the  "Cooperation Period").  During  the  Cooperation
Period,  NIA is obligated to accept all deliveries of  water  and
energy, and so long as the Casecnan Project is physically capable
of  operating and delivering in accordance with agreed levels set
forth  in  the  Project Agreement, NIA will  pay  CE  Casecnan  a
guaranteed fee for the delivery of water and a guaranteed fee for
the delivery of electricity, regardless of the amount of water or
electricity actually delivered.  In addition, NIA will pay a  fee
for all electricity delivered in excess of a threshold amount  up
to  a  specified  amount.   NIA  will  sell  the  electricity  it
purchases  to the Philippine National Power Corporation  ("NPC"),
although  NIA's  obligations  to CE Casecnan  under  the  Project
<PAGE>
Agreement  are  not dependent on the purchase of the  electricity
from  NIA by NPC.  All fees to be paid by NIA to CE Casecnan  are
payable in U.S. dollars.

      The  Casecnan Project was being constructed pursuant  to  a
fixed-price,  date-certain,  turnkey construction  contract  (the
"Hanbo  Contract")  on  a  joint  and  several  basis  by   Hanbo
Corporation ("Hanbo") and Hanbo Engineering and Construction Co.,
Ltd.  ("HECC"), both of which are South Korean corporations.   As
of  May 7, 1997, the Company terminated the Hanbo Contract due to
defaults by Hanbo and HECC including the insolvency of each  such
company.  On the same date, the Company entered into a new fixed-
price,   date   certain  turnkey  engineering,  procurement   and
construction  contract  to  complete  the  construction  of   the
Casecnan  Project (the "Replacement Contract").  The  work  under
the  Replacement  Contract  is being conducted  by  a  consortium
consisting of Cooperativa Muratori Cementisti CMC di Ravenna  and
Impresa Pizzarotti & C. Spa., working together with Siemens A.G.,
Sulzer  Hydro Ltd., Black & Veatch and Colenco Power  Engineering
Ltd. (collectively, the "Replacement Contractor").

      In  connection  with  the Hanbo Contract  termination,  the
Company tendered four certificates of drawing to Korea First Bank
("KFB") under the irrevocable standby letter of credit issued  by
KFB  as  security  under the Hanbo Contract to  pay  for  certain
transition costs and other then ascertainable damages  under  the
Hanbo  Contract.  As a result of KFB's wrongful dishonor  of  the
draw request, the Company filed an action against KFB in New York
State Court.

      On  September 2, 1997, Hanbo and HECC filed a  Request  for
Arbitration  before the International Chamber of  Commerce.   The
Request of Arbitration asserted various claims by Hanbo and  HECC
against CE Casecnan relating to the terminated Hanbo Contract and
sought  damages.   On  October 10, 1997, CE Casecnan  served  its
answer and defenses in response to the Request of Arbitration  as
well as counterclaims against Hanbo and HECC for breaches of  the
Hanbo Contract.

      On April 17, 1998, the Company and Hanbo, HECC, Hanbo Steel
Company  and KFB mutually agreed to settle the differences  among
them related to the Project. Under the settlement, KFB agreed  to
pay  the  Company  $90,000  and  the  parties  discontinued  with
prejudice the pending arbitration and litigation proceedings  and
released each other from all claims arising out of the litigation
and   arbitration.   In  accordance  with  the  terms   of   such
settlement,  the Company received $10,000 from KFB on  April  17,
1998  and  the  remaining balance of $80,000, including  interest
thereon, on July 3, 1998.

     CE  Casecnan financed a portion of the cost of the  Casecnan
Project  through  the issuance of $125,000 of its  11.45%  Senior
Secured Series A Notes due 2005 and $171,500 of its 11.95% Senior
Secured  Series  B  Bonds  due 2010 and $75,000  of  its  Secured
Floating  Rate  Notes due 2002, pursuant to  an  indenture  dated
November 27, 1995, as amended to date (the "Casecnan Indenture").

      The  securities  are  senior debt of the  Company  and  are
secured by a collateral assignment of all revenues received  from
the Project, a collateral assignment of all material contracts, a
lien  on  any  accounts and funds on deposit under a Deposit  and
Disbursement Agreement, a pledge of 100% of the capital stock  of
the Company and a lien on all other material assets and property.
The securities rank pari passu with and will share the collateral
on a pro rata basis with other senior secured debt, if any.

     The securities are subject to certain optional and mandatory
redemption schemes as provided for in the Casecnan Indenture.

      The  debt  covenants  contain certain  restrictions  as  to
incurrence  of  additional indebtedness;  merger,  consolidation,
dissolution,  or  any significant change in corporate  structure;
non-arm's  length  transactions or  agreements  with  affiliates;
material  change in the Turnkey Construction Contract; and  sale,
lease,  or transfer of properties material to the Project,  among
others.

     What  is  generally known as the year 2000 ("Y2K")  computer
issue  arose because many existing computer programs and embedded
systems  use  only  the  last two digits  to  refer  to  a  year.
<PAGE>
Therefore,  those  computer programs do not properly  distinguish
between  a year that begins with "20"  instead of "19".   If  not
corrected,  many  computer  applications  could  fail  or  create
erroneous  results.  The failure to correct a material  Y2K  item
could  result  in  an interruption in, or a failure  of,  certain
normal   business   activities  or   operations   including   the
generation,  distribution,  and  supply  of  electricity.    Such
failures  could  materially and adversely  affect  the  Company's
results of operations, liquidity and financial condition.

     The  Y2K  issue  creates uncertainty for  the  Company  from
potential  issues with its own computer systems  and  from  third
parties  with  whom the Company deals on transactions  worldwide.
The  Company's operations utilize systems and equipment  provided
by other organizations.  As a result, Y2K readiness of suppliers,
vendors,   service  providers  or  customers  could  impact   the
Company's operations.  The Company is assessing the readiness  of
such  constituent entities and the impacts on those entities that
rely  upon  the  Company's services.  The Company  is  unable  to
determine  at this time whether the consequences of Y2K  failures
of  third  parties will have a material impact on  the  Company's
results of operations, liquidity or financial condition.

     The  Company  has  commenced, for  all  of  its  information
systems,  a Y2K date conversion project to address all  necessary
code changes, testing and implementation in order to resolve  the
Y2K  issue.  The Company created a worldwide Y2K project team  to
identify,  assess  and correct all of its information  technology
(IT)  and  non-IT systems, as well as, identify and assess  third
party   systems.   The  Company  has  identified   and   assessed
substantially all of its IT and non-IT systems and  is  currently
in  the process of repairing or replacing those systems which  it
believes are not year 2000 compliant.  As the Casecnan Project is
expected to be in construction through the second quarter of  the
year  2000,  the Y2K problem in regard to Casecnan's  operational
assets  can  not  be tested by the Company until construction  is
complete.   This  compliance is the obligation of the  contractor
until completion of construction.

     Total Y2K expenditures, for both repairing or replacing non-
compliant systems, are expected to be immaterial.  The Company is
not  aware of any additional material costs needed to be incurred
to bring all of its systems into compliance; however, there is no
assurance that additional costs will not be incurred.

     Although  management believes that the Y2K project  will  be
substantially  complete before January 1,  2000,  any  unforeseen
failures of the Company's and/or third parties' computer  systems
could  have a material impact on the Company's ability to conduct
its  business.  Accordingly, the Company is developing  a  formal
contingency  plan that is expected to be completed  by  mid  year
1999 to mitigate any potential business interruption.

Item  7A.  Qualitative and Quantitative Disclosures About  Market
Risk

     The  following  discussion  of  the  Company's  exposure  to
various  market risks contains "forward-looking statements"  that
involve  risks and uncertainties.  These projected  results  have
been prepared utilizing certain assumptions considered reasonable
in  the  circumstances  and  in light  of  information  currently
available to the Company.  Actual results could differ materially
from those projected in the forward-looking information.

Interest Rate Risk

     At  December 31, 1998, the Company had fixed-rate  long-term
debt  of $296,500 in principal amount and having a fair value  of
$241,998.  These instruments are fixed-rate and therefore do  not
expose the Company to the risk of earnings loss due to changes in
market  interest  rates.   However,  the  fair  value  of   these
instruments  would decrease by approximately $18,300 if  interest
rates  were to increase by 10% from their levels at December  31,
1998.   In  general, such a decrease in fair value  would  impact
earnings and cash flows only if the Company were to reacquire all
or a portion of these instruments prior to their maturity.
<PAGE>
     At   December   31,  1998,  the  Company  had  floating-rate
obligations  of $75,000 which expose the Company to the  risk  of
increased  interest expense in the event of increases  in  short-
term  interest rates.  If the floating rates were to increase  by
10%  from  December  31, 1998 levels, the Company's  consolidated
interest  expense would increase by approximately $53 each  month
in  which  such increase continued based upon December  31,  1998
principal balances.
     
     Certain information included in this report contains forward-
looking  statements  made  pursuant  to  the  Private  Securities
Litigation  Reform Act of 1995 "(Reform Act").   Such  statements
are  based on current expectations and involve a number of  known
and  unknown risks and uncertainties that could cause the  actual
results and performance of the Company to differ materially  from
any expected future results or performance, expressed or implied,
by  the forward-looking statements.  In connection with the  safe
harbor  provisions of the Reform Act, the Company has  identified
important  factors  that  could cause actual  results  to  differ
materially  from  such  expectations, including  development  and
construction  uncertainty,  operating uncertainty,  uncertainties
relating  to  doing  business  outside  of  the  United   States,
uncertainties  relating to international economic  and  political
conditions and uncertainties regarding the impact of regulations,
changes   in   government  policy,  industry   deregulation   and
competition.   The  Company assumes no responsibility  to  update
forward-looking information contained herein.
<PAGE>



Item 8.  Financial Statements and Supplementary Data

Report of Independent Public Accountants                                    19

Balance Sheets, December 31, 1998 and 1997                                  20

Statements of Operations for the Years Ended December 31, 1998,
1997 and 1996 and for the Period from Inception (September 21, 1994) 
to December 31, 1998                                                        21
Statements of Changes in Stockholders' Equity for the Period from
Inception (September 21, 1994) to December 31, 1998                         22

Statements of Cash Flows for the Years Ended December 31, 1998,1997
and 1996 and for the Period from Inception (September 21, 1994)
to December 31, 1998                                                        23

Notes to Financial Statements                                               24


<PAGE>




REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



The Stockholders and the Board of Directors
CE Casecnan Water and Energy Company, Inc.


We  have  audited the accompanying balance sheets of CE  Casecnan
Water  and  Energy  Company, Inc. (a company in  the  development
stage)  as  of  December  31,  1998 and  1997,  and  the  related
statements  of operations, changes in stockholders'  equity,  and
cash  flows  for  each  of the three years in  the  period  ended
December  31, 1998 and for the period from the date of  inception
(September  21,  1994)  to December 31,  1998.   These  financial
statements  are  the responsibility of the Company's  management.
Our  responsibility is to express an opinion on  these  financial
statements based on our audits.

We  conducted  our  audits in accordance with auditing  standards
generally  accepted  in  the United  States  of  America.   Those
standards  require that we plan and perform the audit  to  obtain
reasonable  assurance about whether the financial statements  are
free  of material misstatement.  An audit includes examining,  on
a  test basis, evidence supporting the amounts and disclosures in
the  financial statements.  An audit also includes assessing  the
accounting  principles  used and significant  estimates  made  by
management, as well as evaluating the overall financial statement
presentation.   We believe that our audits provide  a  reasonable
basis for our opinion.

In  our  opinion,  the  financial statements  referred  to  above
present  fairly, in all material respects, the financial position
of  CE Casecnan Water and Energy Company, Inc. as of December 31,
1998 and 1997, and the results of its operations, the changes  in
stockholders' equity, and its cash flows for each  of  the  three
years  in  the period ended December 31, 1998 and for the  period
from  the date of inception (September 21, 1994) to December  31,
1998  in conformity with accounting principles generally accepted
in the United States of America.






SyCip Gorres Velayo & Co.
An Arthur Andersen Member Firm


Makati City, Philippines
January 20, 1999
<PAGE>

CE CASECNAN WATER AND ENERGY COMPANY, INC.
(A Company in the Development Stage)
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
(Presented in United States Dollars)
(Dollars in Thousands, Except Par Value Amount)

                                                          1998          1997
ASSETS                                                             
Cash                                                   $  1,996      $    676
Restricted Cash and Short-term Investments              145,958       183,478
Accrued Interest Receivable                               3,014         2,962
Restricted Investments                                  122,341       126,684
Bond Issue Costs - net                                   10,334        11,513
Development and Construction Costs                      261,563       158,266
Deferred Income Tax - net                                 8,227         8,333
                                                       $553,433      $491,912
                                                     
LIABILITIES AND STOCKHOLDERS' EQUITY                 
Accounts Payable and Accrued Expenses                  $ 82,635      $ 19,192
Advances from an Affiliate                                  756         3,059
Notes and Bonds Payable                                 371,500       371,500
Commitments and Contingencies                        
Stockholders' Equity                                 
Capital stock -$0.038 par value                      
     Authorized - 2,148,000 shares                   
     Issued - 767,162 shares                                 29            29
Additional paid-in capital                              123,807       123,807
Accumulated Deficit                                     (25,294)      (25,675)
                                                         98,542        98,161
                                                       $553,433      $491,912
                                                     
See accompanying Notes to Financial Statements.
<PAGE>
CE CASECNAN WATER AND ENERGY COMPANY, INC.
(A Company in the Development Stage)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
AND FOR THE PERIOD FROM THE DATE OF INCEPTION (SEPTEMBER 21,1994)
TO DECEMBER 31, 1998
(Presented in United States Dollars)
(Dollars in Thousands, Except Per Share Amounts)

                                                                     From the
                                                                     Date of
                                                                    Inception
                                                                   (September
                                                                    21, 1994)
                                                                   to December
                                     1998       1997       1996      31, 1998
                                                           
Interest Income                    $19,533    $19,786    $25,611     $67,423
                                                           
Expenses                                                   
                                                           
Interest - net of interest 
 capitalized                        17,867     33,653     41,903      97,688
                                                           
Amortization of bond issue costs     1,179      1,053        949       3,256
costs
                                                           
                                    19,046     34,706     42,852     100,944
                                                           
Income (loss) before income tax        487    (14,920)   (17,241)    (33,521)
                                     
Benefit from (provision for)
  deferred income tax                 (106)     3,656      4,030       8,227
                                                           
Net income (loss)                     $381   ($11,264)  ($13,211)   ($25,294)
                                     
Net income (loss) per share        $  0.50    $(14.68)   $(17.22)    $(35.71)
                                                          
Average number of common shares                            
outstanding                        767,162    767,162    767,162     708,225

See accompanying Notes to Financial Statements.
<PAGE>
CE CASECNAN WATER AND ENERGY COMPANY, INC.
(A Company in the Development Stage)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM THE DATE OF INCEPTION (SEPTEMBER 21, 1994)
TO DECEMBER 31, 1998
(Presented in United States Dollars)
(Dollars in Thousands, Except Par Value Amount)

                             Outstanding Common Additional     
                                Common   Stock    Paid-in  Deficit  Total
                                Shares            Capital

Balance, September 21, 1994          -      $-        $-       $-       $-

Issuance of common shares
  at $0.038 par value          537,014      20       530        -      550
Balance, December  31, 1994    537,014      20       530        -      550
Additional issuance of                                      
  common shares                230,148       9         -        -        9
                                                            
Additional paid-in capital           -       -   123,277        -  123,277
Net loss                             -       -         -   (1,200)  (1,200)
Balance, December 31,1995      767,162      29   123,807   (1,200) 122,636
Net loss                             -       -         -  (13,211) (13,211)
Balance, December 31,1996      767,162      29   123,807  (14,411) 109,425
Net loss                             -       -         -  (11,264) (11,264)
Balance, December 31,1997      767,162      29   123,807  (25,675)  98,161
Net income                           -       -         -      381      381
Balance, December 31,1998      767,162     $29  $123,807 ($25,294) $98,542
                                                            
See accompanying Notes to Financial Statements.
<PAGE>
CE CASECNAN WATER AND ENERGY COMPANY, INC.
(A Company in the Development Stage)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
AND FOR THE PERIOD FROM THE DATE OF INCEPTION (SEPTEMBER 21,1994)
TO DECEMBER 31, 1998
(Presented in United States Dollars)
(Dollars in Thousands)
                                                               From the Date of
                                                                 Inception
                                                               (September 21,
                                                                  1994) to
                                                                December 31,
                                     1998     1997     1996         1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                    $381  ($11,264) ($13,211)   ($25,294)
Adjustments to reconcile net income
  (loss) to net cash provided by
  (used in)operating activities:
  Amortization of bond issue costs  1,179     1,053       949       3,256
  Provision for (benefit from) 
   deferred income tax                106    (3,656)   (4,030)     (8,227)
  Changes in assets and liabilities:
   Decrease (increase) in 
    accrued interest receivable       (52)    1,996    (2,138)     (3,014)
   Increase in accounts payable
    and accrued expenses            2,195       360     1,829       8,650
Net cash provided by (used in) 
  operating activities              3,809   (11,511)  (16,601)    (24,629)

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to development and 
  construction costs             (103,297) (107,474)  (42,453)   (261,563)
Decrease (increase)in restricted:
    Cash and short-term 
      investments                  37,520   (39,356)   91,729    (145,958)
    Investments                     4,343   146,331   (34,550)   (122,341)
Increase in accounts payable and                            
  accrued expenses related to
  development and construction 
  costs                            61,248    10,029     1,302      73,985
Net cash provided by (used in) 
  investing activities               (186)    9,530    16,028    (455,877)

CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in:                                    
  Advances from an affiliate       (2,303)    2,625      (639)        756
  Accounts payable and accrued
  expenses related to financing 
  activities                            -         -      (279)          -
Increase in bond issue costs            -         -      (173)    (13,590)
Proceeds from issuance of:                                 
  Capital stock                         -         -         -          29
  Notes and bonds payable               -         -         -     371,500
Additional paid-in capital              -         -         -     123,807
Net cash provided by (used in) 
  financing activities             (2,303)    2,625    (1,091)    482,502

NET INCREASE (DECREASE) IN CASH     1,320       644    (1,664)      1,996
CASH AT BEGINNING OF PERIOD           676        32     1,696           -
CASH AT END OF PERIOD              $1,996      $676       $32      $1,996
SUPPLEMENTAL DISCLOSURE OF CASH                            
     FLOW INFORMATION                                      
Interest paid during the period 
  (net of camount capitalized)    $18,477   $33,293   $40,074     $91,844
                                                           


See accompanying Notes to Financial Statements.
<PAGE>
CE CASECNAN WATER AND ENERGY COMPANY, INC.
(A Company in the Development Stage)
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands)



1.Organization

  The  Company was registered with the Philippine Securities  and
  Exchange  Commission  on September 21, 1994,  with  a  calendar
  year  which  ends on December 31.  Its primary  purpose  is  to
  design,   develop,  construct,  erect,  assemble,   commission,
  operate  and  own a hydroelectric power plant and  the  related
  facilities  for  conversion into electricity of water  provided
  by  and  under contract with the Philippine Government  or  any
  government-owned or controlled corporation.

  The  Company  has  a  contract with the Philippine  Government,
  through   the  National  Irrigation  Administration  (NIA)   (a
  government-owned   and   controlled   corporation),   for   the
  development  and  construction of a hydroelectric  power  plant
  and   related  facilities  under  a  build-own-operate-transfer
  agreement, covering a 20-year cooperation period with "take-or-
  pay" obligations for water and electricity.  At the end of  the
  20-year  cooperation period, the combined  irrigation  and  150
  NMW  hydroelectric power generation project  (the  Casecnan
  Project)  will  be transferred to the Philippine Government  at
  no  cost.   The Philippine Government also signed a Performance
  Undertaking  which  affirms and guarantees the  obligations  of
  NIA  under the contract.  Construction of the Casecnan  Project
  commenced  in  1995  and  related  costs  are  included   under
  "Development and Construction Costs" in the balance sheets.

  The  Company is in the development stage and as of December 31,
  1998 has not yet started commercial operations.

  After  the  completion  of  the  aforementioned  project,   the
  Company  is  expected to be at least 70% owned  by  MidAmerican
  Energy  Holdings  Company, the successor of CalEnergy  Company,
  Inc.,  subject  to  upward adjustment  based  upon  the  actual
  economics   of   the  Casecnan  Project  at   commencement   of
  commercial operations.


2.Summary of Significant Accounting Policies

  Basis of Presentation
  The  financial  statements  of the  Company  were  prepared  in
  United  States dollar amounts.  Gains or losses resulting  from
  translation  of  monetary  assets and  liabilities  in  foreign
  currencies are not material.

  Restricted Cash and Short-term Investments
  Investments   other   than  restricted   cash   are   primarily
  commercial paper and money market securities.  Restricted  cash
  includes similar securities and mortgage-backed securities.
<PAGE>
  Since  the Company has the positive intent and ability to  hold
  all  of  its  investments to maturity, these are classified  as
  held  to maturity and recorded at amortized cost.  The carrying
  amount  of  investments  as of December 31,  1998  approximates
  their  fair  value  which is based on quoted market  prices  as
  provided by the financial institution holding the investments.

  Bond Issue Costs
  Bond  issue costs consist of costs incurred in the issuance  of
  senior secured notes and bonds and are amortized over the  term
  of  the  notes  and  bonds  using the effective  interest  rate
  method.

  Development and Construction Costs
  Costs  related  to  the  development and  construction  of  the
  hydroelectric   power   plant  and   related   facilities   are
  capitalized  and will be amortized over a period  of  20  years
  from the start of its commercial operations.

  Interest Capitalization
  Interest  and other financial charges are capitalized  as  part
  of  the  cost of capital projects.  Interest is capitalized  up
  to the extent of construction and development costs incurred.

  Foreign Currency Transactions
  Transactions   conducted  in  foreign  currencies   (Philippine
  pesos)  are recorded based on the prevailing rates of  exchange
  at   transaction   dates.   Monetary  assets  and   liabilities
  denominated  in  foreign  currencies  (Philippine  pesos)   are
  restated  in  the  financial statements at the  exchange  rates
  prevailing at the balance sheet date.

  Income Tax
  Deferred  tax  assets and liabilities are  recognized  for  the
  future  tax  consequences attributable to  differences  between
  the  financial  reporting bases of assets and  liabilities  and
  their  related tax bases.  Deferred tax assets and  liabilities
  are  measured using the tax rate expected to apply  to  taxable
  income  in  the years in which those temporary differences  are
  expected to be recovered or settled.  A valuation allowance  is
  provided for deferred tax assets which is more likely than  not
  that a tax benefit will not be realized.

  Notes and Bonds Payable
  The   Company  classifies  its  notes  and  bonds  payable   in
  accordance  with FAS No. 107 "Disclosures about Fair  Value  of
  Financial  Instruments."   Based on quoted  market  rates,  the
  fair value of the notes and bonds is $302,248.

  Net Income (Loss) Per Share
  Net income (loss) per share is based on the weighted average number
  of common shares outstanding during the period.

3.Advances from an Affiliate

  This  account represents noninterest-bearing cash advances from
  CE  Casecnan Ltd., a stockholder,  for the construction of  the
  Casecnan Project.
<PAGE>
4.Notes and Bonds Payable

  On  November  27,  1995, the Company issued $371,500  worth  of
  notes  and  bonds to finance the construction of  the  Casecnan
  Project.   These  consist  of $75,000 Senior  Secured  Floating
  Rate  Notes (FRNs) due 2002; $125,000 Senior Secured  Series  A
  Notes  (Series A Notes) with interest at 11.45% due 2005;  and,
  $171,500  Senior Secured Series B Bonds (Series B  Bonds)  with
  interest  at 11.95% due 2010.  For the year ended December  31,
  1998,  the  notes  and bonds had effective  interest  rates  of
  9.40%, 12.01% and 12.44% for FRNs, Series A Notes and Series  B
  Bonds,  respectively,  inclusive of the effect  of  bond  issue
  cost  amortization.  Quarterly interest payments for  the  FRNs
  commenced  on  February  15,  1996,  and  semi-annual  interest
  payments  for  Series A Notes and Series B Bonds  commenced  on
  May 15, 1996.

  Semi-annual  installments for principal payments will  commence
  on  November  15, 2000, May 15, 2003 and May 15, 2002  for  the
  FRNs,  Series  A  Notes and Series B Bonds, respectively.   The
  repayment schedule is as follows:

                    Floating  Series A   Series B          
                  Rate Notes     Notes      Bonds     Total
     2000           $18,750         $-         $-   $18,750
     2001            29,625          -          -    29,625
     2002            26,625          -      8,575    35,200
     2003                 -     33,750      7,718    41,468
     2004                 -     42,500      6,860    49,360
     2005                 -     48,750      6,002    54,752
     2006                 -          -     36,015    36,015
     2007                 -          -     37,730    37,730
     2008                 -          -     37,730    37,730
     2009                 -          -     13,720    13,720
     2010                 -          -     17,150    17,150
                    $75,000   $125,000   $171,500  $371,500

  The  securities are senior debt of the Company and are  secured
  by  an  assignment of all revenues that will be  received  from
  the  Casecnan Project, a collateral assignment of all  material
  contracts, a lien on any accounts and funds on deposit under  a
  Deposit  and  Disbursement Agreement, a pledge of 100%  of  the
  capital  stock of the Company and a lien on all other  material
  assets  and  property interests of the Company.  The securities
  rank  pari passu with and will share the collateral  on  a  pro
  rata  basis  with  other  senior secured  debt,  if  any.   The
  securities  are  subject  to  certain  optional  and  mandatory
  redemption schemes as provided for in the Trust Indenture.

  The   debt  covenants  contain  certain  restrictions   as   to
  incurrence  of  additional indebtedness; merger, consolidation,
  dissolution, or any significant change in corporate  structure;
  non-arm's  length  transactions or agreements with  affiliates;
  material change in the Turnkey Construction Contract (see  Note
  7);  sale,  lease, or transfer of properties  material  to  the
  Casecnan Project, among others.
<PAGE>
  In  connection  with  the foregoing secured  indebtedness,  the
  Company,  on  November 27, 1995, entered  into  a  Deposit  and
  Disbursement   Agreement  with  Chemical   Trust   Company   of
  California   (Chemical   Trust)  and  Kiewit   (a   predecessor
  shareholder) whereby Chemical Trust acts as a depositary and  a
  collateral agent.  As a depositary agent, it will hold  monies,
  instruments  and  securities pledged  by  the  Company  to  the
  collateral  agent.   The  terms of this agreement  require  the
  establishment  of  several  funds  which  include   a   Capital
  Contribution  Fund.   The Company's stockholders  deposited  an
  aggregate  capital contribution of approximately US$123,300  to
  the  fund  which will be strictly used to fund the construction
  of  the  Casecnan Project when the proceeds from the  Series  A
  Notes  and  Series  B  Bonds  have been  fully  utilized.   The
  contributions are included in the "Additional paid-in  capital"
  in the balance sheets.

  Interest  capitalized as part of Development  and  Construction
  Costs  amounted  to US$27,161 and US$12,256 in 1998  and  1997,
  respectively.


5.Income Tax

  The  Company's  deferred  tax asset  amounting  to  $8,227  and
  $8,333 (net of valuation allowance of $3,510 and $3,570) as  of
  December  31, 1998 and 1997, respectively, consists  mainly  of
  the  difference between the financial reporting basis  and  the
  tax reporting basis for Development and Construction Costs.


6.Capital Stock

  On  October 26, 1995, the Company issued 230,148 shares to  the
  current  minority stockholders out of the unsubscribed  portion
  of the Company's authorized capital stock.

  The  minority stockholders initially formed a venture to pursue
  the  opportunity  of developing a water and energy  project  in
  the Casecnan Basin.  After securing preliminary indications  of
  interest   from   the  Philippine  Government,   the   minority
  stockholders sought out the other shareholders to  form  a  new
  entity  capable of financing and building the Casecnan Project.
  In  consideration  of  their role in  initiating  the  Casecnan
  Project,   delivering  the  opportunity  to  the  Company   and
  performing  development assistance, the  minority  stockholders
  retained an ownership interest in the Company.


7.Commitments and Contingencies

  In   November  1995,  the  Company  closed  the  financing  and
  commenced  construction  of the Casecnan  Project,  a  combined
  irrigation  and  150  net  MW  hydroelectric  power  generation
  project  located in the central part of the island of Luzon  in
  the Republic of the Philippines.
<PAGE>
  The Casecnan Project was being constructed pursuant to a fixed-
  price,  date-certain, turnkey construction contract (the "Hanbo
  Contract")  on  a joint and several basis by Hanbo  Corporation
  ("Hanbo")  and  Hanbo  Engineering and Construction  Co.,  Ltd.
  ("HECC"), both of which are South Korean corporations.   As  of
  May  7, 1997, the Company terminated the Hanbo Contract due  to
  defaults  by  Hanbo and HECC including the insolvency  of  each
  such  company.   On the same date, the Company entered  into  a
  new  fixed-price, date certain turnkey engineering, procurement
  and  construction contract to complete the construction of  the
  Casecnan Project (the "Replacement Contract").  The work  under
  the  Replacement  Contract is being conducted by  a  consortium
  consisting  of Cooperativa Muratori Cementisti CMC  di  Ravenna
  and  Impresa  Pizzarotti  &  C.  Spa.,  working  together  with
  Siemens  A.G.,  Sulzer Hydro Ltd., Black & Veatch  and  Colenco
  Power   Engineering   Ltd.  (collectively,   the   "Replacement
  Contractor").

  In  connection with the Hanbo Contract termination, the Company
  tendered  four  certificates of drawing  to  Korea  First  Bank
  ("KFB")  under the irrevocable standby letter of credit  issued
  by  KFB as security under the Hanbo Contract to pay for certain
  transition  costs  and other then ascertainable  damages  under
  the Hanbo Contract.  As a result of KFB's wrongful dishonor  of
  the  draw request, the Company filed an action against  KFB  in
  New York State Court.

  On  September  2,  1997, Hanbo and HECC  filed  a  Request  for
  Arbitration before the International Chamber of Commerce.   The
  Request  of  Arbitration asserted various claims by  Hanbo  and
  HECC  against  CE  Casecnan relating to  the  terminated  Hanbo
  Contract  and sought damages.  On October 10, 1997, CE Casecnan
  served  its  answer and defenses in response to the Request  of
  Arbitration  as  well as counterclaims against Hanbo  and  HECC
  for breaches of the Hanbo Contract.

  On  April  17, 1998, the Company and Hanbo, HECC,  Hanbo  Steel
  Company  and  KFB  mutually agreed to  settle  the  differences
  among  them  related to the Project. Under the settlement,  KFB
  agreed  to pay the Company $90,000 and the parties discontinued
  with   prejudice   the  pending  arbitration   and   litigation
  proceedings  and  released each other from all  claims  arising
  out  of the litigation and arbitration.  In accordance with the
  terms  of  such settlement, the Company received  $10,000  from
  KFB  on  April 17, 1998 and the remaining balance  of  $80,000,
  including  interest thereon, on July 3, 1998.  The  receipt  of
  the  $90,000  was originally included in "Accounts Payable  and
  Accrued Expenses" and is being released periodically to  offset
  costs  which were, and will be, incurred over the remainder  of
  the construction period.

  The  Company's ability to make payments on any of its  existing
  and future obligations is dependent on NIA and the Republic  of
  the  Philippines'  performance of their obligations  under  the
  Project    Agreement    and   the   Performance    Undertaking,
  respectively.  No shareholders, partners or affiliates  of  the
  Company,   including  CECI,  and  no  directors,  officers   or
  employees  of  the  Company will guarantee or  be  in  any  way
  liable  for payment of the Company's obligations.  As a result,
  payment   of  the  Company's  obligations  depends   upon   the
  availability   of  sufficient  revenues  from   the   Company's
  business after the payment of operating expenses.
<PAGE>
  NIA's payments of obligations under the Project Agreement  will
  be  substantially denominated in United States dollars and  are
  expected   to  be  the  Company's  sole  source  of   operating
  revenues.   Because  of the Company's dependence  on  NIA,  any
  material  failure of NIA to fulfill its obligations  under  the
  Project  Agreement and any material failure of the Republic  of
  the   Philippines   to  fulfill  its  obligations   under   the
  Performance Undertaking would significantly impair the  ability
  of the Company to meet its existing and future obligations.


8.Registration with the Board of Investments (BOI)

  The  Company  is registered with the BOI of the Philippines  as
  a  new  operator  of a hydroelectric power plant  with  pioneer
  status  under  the Omnibus Investment Code of  1987  (Executive
  Order  No.  226).   Under  the terms of its  registration,  the
  Company  is  entitled to certain incentives  which  include  an
  income  tax  holiday for a minimum of six years from start of
  commercial operations; tax  and  duty free  importation of 
  capital equipment; tax credits on domestic capital  equipment;  
  and  exemption  from  custom  duties   and  national  internal  
  revenue  taxes  for  the  importation   and  unrestricted   use   
  of  the  consigned   equipment   for   the  development,  
  construction, start-up, testing and operation  of  the   power  
  plant.   The  registration  also  requires,  among others,  the  
  maintenance  of  a  debt-to-equity   ratio   not  exceeding   
  75:25  commencing  from  the  start  of  commercial operations.

<PAGE>
Item  9:    Changes  in  and Disagreements  with  Accountants  on
Accounting and Financial Disclosure

         Not Applicable
<PAGE>
PART III

Item 10.  Directors and Executive Officers of the Company

      The  following  table  sets  forth  the  names,  ages,  and
positions of the directors and executive officers of the Company:

NAME                AGE       POSITION

David L. Sokol           42   Director and Chairman
Gregory E. Abel          36   Chief Executive Officer
Steven A. McArthur       41   Director, Senior Vice President  and
Assistant Secretary
Alan  L.  Wells          39   Senior Vice President  and  Chief
                              Financial Officer
Douglas L. Anderson      41   Vice President, General Counsel and
Assistant Secretary
David  A.  Baldwin       34   Director,  Vice  President  and
General Manager
Edward F. Bazemore       62   Vice President - Human Resources
Vincent R. Fesmire       58   Vice President - Construction
Patrick  J.  Goodman     32   Senior Vice President  and  Chief
Accounting Officer
Brian K. Hankel          36   Vice President and Treasurer
Frederick L. Manuel      40   Director and President
Scott LaPrairie          41   Director
Ruby  S.  Nitorreda      35   Director and Assistant  Corporate
Secretary
Elizabeth B. Opena       29   Director
Jose R. Sandejas         61   Director and Corporate Secretary
James D. Stallmeyer      41   Vice President and General Counsel,
Asia

      Directors  of  the  Company are elected annually  and  hold
office  until  a  successor is elected.  Executive  officers  are
chosen  from  time  to  time by vote of the Board  of  Directors.
Pursuant  to the terms of the Stockholders Agreement, CE Casecnan
Ltd. is entitled to elect seven of the directors, and each of the
minority investors is entitled to elect one director.

      David  L. Sokol.  In addition to serving as a Director  and
Chairman  of  the  Company, Mr. Sokol has  been  Chief  Executive
Officer  of  MidAmerican  since April  19,  1993  and  served  as
President  of MidAmerican from April 19, 1993 until  January  21,
1995.   Mr.  Sokol  has been Chairman of the Board  of  Directors
since  May  1994 and a director of MidAmerican since March  1991.
Formerly,  among  other positions held in the  independent  power
industry,  Mr. Sokol served as the President and Chief  Executive
Officer of Kiewit Energy Company, which at that time was a wholly
owned subsidiary of PKS, and Ogden Projects, Inc.

      Gregory E. Abel.  In addition to serving as Chief Executive
Officer of the Company, Mr. Abel is President and Chief Operating
Officer  of  MidAmerican.  Mr. Abel joined MidAmerican  in  1992.
Mr.  Abel is a Chartered Accountant and from 1984 to 1992 he  was
employed  by Price Waterhouse.  As a Manager in the San Francisco
office of Price Waterhouse, he was responsible for clients in the
energy industry.

      Steven  A. McArthur.  In addition to serving as a Director,
Senior  Vice President of the Company, Mr. McArthur is  a  Senior
Vice President and Secretary of MidAmerican.  Mr. McArthur joined
MidAmerican  in  February 1991.  From 1988  to  1991  he  was  an
attorney in the Corporate Finance Group at Shearman & Sterling in
San  Francisco.   From 1984 to 1988, he was an  attorney  in  the
Corporate Finance Group at Winthrop, Stimson, Putnam & Roberts in
New York.
<PAGE>
      Alan  L.  Wells.   In addition to serving  as  Senior  Vice
President  and  Chief Financial Officer for the  Company,  he  is
Senior   Vice   President   and  Chief  Financial   Officer   for
MidAmerican.   Mr. Wells served as Vice President of  MidAmerican
Energy from November 1, 1996 to October 31, 1997 and held various
executive  and management positions with MidAmerican  Energy  and
Iowa-Illinois from 1993 to October 31, 1996.

      Douglas  L.  Anderson.   In addition  to  serving  as  Vice
President  and General Counsel for the Company, Mr.  Anderson  is
Vice President and Assistant General Counsel of MidAmerican.  Mr.
Anderson joined MidAmerican in February 1993.  From 1990 to  1993
Mr.  Anderson  was  a  business attorney  with  Fraser,  Stryker,
Vaughn, Meusey, Olson, Boyer & Bloch, P.C. in Omaha and from 1987
through 1989, Mr. Anderson was a principal in the firm Anderson &
Anderson.   Prior to that, from 1985 to 1987, he was an  attorney
for Foster, Swift, Collins & Coey, P.C. in Lansing, Michigan.

      David A. Baldwin.  In addition to serving as Director, Vice
President  and  General Manager for the Company,  he  is  General
Manager, Philippines for MidAmerican.  From December 1996 to June
1997,  Mr.  Baldwin served as Vice President, Project Development
for  Asia Power Ltd. In Hong Kong.  From October 1994 to December
1996,  Mr.  Baldwin was Project Director at SouthPac  Corporation
Ltd.  In  New  Zealand and, prior to that, he held  a  series  of
project   management   and   engineering   positions   at   Shell
International in the Neatherlands and New Zealand.

      Edward  F.  Bazemore.   In  addition  to  serving  as  Vice
President  - Human Resources for the Company, he also  serves  in
the   same   capacity  for  MidAmerican.   Mr.  Bazemore   joined
MidAmerican  in  July  1991.  From  1989  to  1991  he  was  Vice
President,  Human  Resources  at Ogden  Projects,  Inc.,  in  New
Jersey.  Previously, he was Director of Industrial Relations  for
Scripto, Inc. in Atlanta, Georgia.

      Vincent  R.  Fesmire.   In  addition  to  serving  as  Vice
President  -  Construction for the Company, Mr. Fesmire  is  Vice
President,  Construction and Engineering  for  MidAmerican.   Mr.
Fesmire  joined  MidAmerican  in  October  1993.   Since  joining
MidAmerican,  Mr.  Fesmire's responsibilities have  shifted  from
project   development  and  implementation  to  construction   in
parallel  with  the status of MidAmerican's projects.   Prior  to
joining  MidAmerican, Mr. Fesmire was employed for 19 years  with
Stone   &  Webster,  an  engineering  firm,  serving  in  various
management  level  capacities with  an  expertise  in  geothermal
design engineering.

      Patrick J. Goodman.  In addition to serving as Senior  Vice
President  and  Chief Accounting Officer for the Company,  he  is
Senior   Vice   President  and  Chief  Accounting   Officer   for
MidAmerican.   Mr. Goodman joined MidAmerican in June  1995,  and
served  as  Manager of Consolidation Accounting  until  September
1996  when  he  was  promoted to Controller.   Prior  to  joining
MidAmerican,  Mr.  Goodman was a financial manager  for  National
Indemnity Company and a senior associate at Coopers & Lybrand.

      Brian  K. Hankel.  In addition to serving as Vice President
and Treasurer for the Company, he is Vice President and Treasurer
for  MidAmerican.  Mr. Hankel joined MidAmerican in February 1992
as  a  Treasury Analyst and served in that position  to  December
1995.   Mr.  Hankel was appointed Assistant Treasurer in  January
1996  and  was  appointed Treasurer in January  1997.   Prior  to
joining  the Company, Mr. Hankel was a Money Position Analyst  at
FirsTier  Bank  of  Lincoln from 1988 to 1992 and  Senior  Credit
Analyst at FirsTier from 1987 to 1988.

     Frederick L. Manuel.  In addition to serving as Director and
President  for  the  Company,  he  is  Senior  Vice  President  -
Operations of MidAmerican.  Prior to joining MidAmerican, he  was
employed  by Chevron Corporation with responsibilities  including
land and offshore drilling, reservoir and production engineering,
project management and technical research.

      Scott  LaPrairie.  In addition to serving as a Director  of
the  Company,  Mr.  LaPrairie is President  and  Chief  Executive
Officer of the LaPrairie Group of Companies.

     Ruby S. Nitorreda.  In addition to serving as a Director and
Assistant Corporate Secretary of the Company, Ms. Nitorreda is  a
partner with the law firm of Quisumbing Torres & Evangelista.
<PAGE>
     Elizabeth B. Opena.  In addition to serving as a Director of
the  Company,  Ms.  Opena is an attorney with  the  law  firm  of
Quesumbing Torres & Evangelista.

      Jose R. Sandejas.  In addition to serving as a Director and
Corporate  Secretary of the Company, Mr. Sandejas  is  a  partner
with the law firm of Quisumbing Torres & Evangelista.

      James  D.  Stallmeyer.   In addition  to  serving  as  Vice
President  of  the Company, Mr. Stallmeyer is Vice President  and
General Counsel of Northern Electric.  Mr. Stallmeyer joined  the
Company  in 1993.  Mr. Stallmeyer practiced in the public finance
and  banking areas at Chapman and Cutler in Chicago from 1984  to
1987  and in the corporate finance department from 1989 to  1993.
Prior  to  that,  Mr. Stallmeyer was an attorney  in  the  public
finance department of the Chicago office of Skadden, Arps, Slate,
Meagher  &  Flom  in  1987  and 1988  and  was  a  legal  writing
instructor at the University of Illinois College of Law  in  1988
and 1989.

Item 11.  EXECUTIVE COMPENSATION

      None  of the executive officers or directors of the Company
receives  compensation from the Company for services as  officers
or  directors  of the Company.  All directors are reimbursed  for
their expenses in attending board and committee meetings.

Item  12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL  OWNERS  AND
MANAGEMENT
Description of Capital Stock

     As of December 31, 1997, the authorized capital stock of the
Company consisted of 2,148,000 shares of common stock, par  value
1.00 peso per share (the "Common Stock"), of which 767,162 shares
were  outstanding.   There is no public trading  market  for  the
Common  Stock.  As of December 31, 1998 there were 8  holders  of
record of the Common Stock.  Holders of Common Stock are entitled
to   one  vote  per  share  on  any  matter  coming  before   the
stockholders for a vote.

      The  Indenture contains certain restrictions on the payment
of dividends with respect to the Common Stock.

Principal Holders

      The following table sets forth information with respect  to
the  shares  of common stock owned of record and beneficially  by
all  persons who own of record or are known by the Company to own
beneficially  more  than  5%  of the  common  stock  and  by  all
directors and officers of the Company as a group.

                                               Number Of      Percentage Of
Name and Address of Owner                     Shares Owned*  Common Stock Owned

1.CE Casecnan, Ltd.  (1)                         537,005            70%(2)
  a Bermuda corporation
  c/o Conyers Dill & Pearman
  Clarendon House
  P.O. Box 666
  Hamilton, Bermuda HM CX

2.LaPrairie Group Contractors 
  (International), Ltd.                          115,074             15%(3)
  a Barbados corporation
  c/o P.O. . Box 690C
  Bridgetown, Barbados

3.San Lorenzo Ruiz Builders  
  and Developers Group, Inc.                     115,074             15%(4)
  a Philippine corporation
  Violago Compound
  222 East Rodriguez Avenue
  Quezon City, Philippines
<PAGE>
*In  addition, each director of the Company owns one share in the
Company as required by Philippine law.

      (1)   MidAmerican  indirectly owns  CE  Casecnan,  Ltd.,  a
Bermuda corporation which is the registered owner of the shares.

      (2)   Number  of shares owned subject to upward  adjustment
based on projected level of financial return to MidAmerican  from
the Project calculated at the time of Completion.

      (3)   Number of shares owned subject to downward adjustment
based on projected level of financial return to MidAmerican  from
the Project calculated at the time of Completion.  Neither of the
minority  shareholders will have a major role in the development,
construction or operation of the project.

     (4)  During 1998, MidAmerican purchased substantially all of
the shares held by San Lorenzo Ruiz Builders and Developers Group
Inc.;  however,  San  Lorenzo has an option to  repurchase  those
shares at project completion.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  Not Applicable.
<PAGE>
                           SIGNATURES


   Pursuant  to  the requirements of Section 13 or 15(d)  of  the
Securities Exchange Act of 1934, the Company has duly caused this
report  to  be signed on its behalf by the undersigned, thereunto
duly  authorized,  in the City of Omaha, State  of  Nebraska,  on
March 26, 1999.


                          CE  CASECNAN WATER AND ENERGY COMPANY, INC.



                         By:  /s/ Steven A. McArthur
                              Steven A. McArthur
                              Director

   Pursuant to the requirements of the Securities Exchange Act of
1934,  the  Company has caused this report to be  signed  by  the
following persons in the capacities and on the dates indicated:

Signature                            Title                            Date

David  L.  Sokol*        Director and Chairman of the Board     March 26, 1999
David L. Sokol

Gregory E. Abel*         Chief Executive Officer                March 26, 1999
Gregory E. Abel          (Principal Executive Officer)

Alan L. Wells*           Senior Vice President and 
Alan L. Wells            Chief Financial Officer                March 26, 1999
                         (Principal Financial Officer)

Steven A. McArthur       Director                               March 26, 1999
Steven A. McArthur

Ruby S. Nitorreda*       Director                               March 26, 1999
Ruby S. Nitorreda

David A. Baldwin*        Director                               March 26, 1999
David A. Baldwin

Frederick L. Manuel*     Director                               March 26, 1999
Frederick L. Manuel

Patrick J. Goodman*      Senior Vice President and              March 26, 1999
Patrick J. Goodman       Chief Accounting Officer               
                        (Principal Accounting Officer)

*By: /s/ Steven A. McArthur
  Steven A. McArthur
  Attorney-in-Fact
<PAGE>
                        INDEX TO EXHIBITS

Exhibit No.    Description of Exhibit

3.1        Articles of Incorporation of the Company (incorporated
           by reference to Exhibit 3.1 the Company's  Registration  Statement  
           on  Form  S-4,  as amended, dated January 25, 1996 ("Form S-4")).

3.2        By-laws  of the Company (incorporated by reference  to
           Exhibit 3.2 the Company's Form S-4).

4.1(a)     Trust Indenture, dated as of November  27,  1995,
           between Chemical Trust Company of California and the Company 
           (incorporated by reference to Exhibit 4.1(a) the Company's Form S-4).

4.1(b)     First Supplemental Indenture, dated as of April 10, 1996, between 
           Chemical Trust Company of California and the Company (incorporated by
           reference to Exhibit 4.1(b) to the Company's Form S-4).

4.2        Exchange and Registration Rights Agreement, dated as of 
           November 27, 1995, by and among CS First Boston Corporation, Bear 
           Stearns & Co. Inc., Lehman Brothers  Inc.  and  the  Company  
           (incorporated by reference to Exhibit 4.2 the Company's Form S-4).

4.3        Collateral Agency and Intercreditor Agreement, dated as
           of November 27, 1995, by and among Chemical Trust Company of 
           California, Far East Bank & Trust Company and the Company 
           (incorporated by reference to Exhibit 4.3 the Company's Form S-4).

4.4        Mortgage and Security Agreement, dated as of  November
           10, 1995, by and among CE Casecnan Ltd., Kiewit Energy 
           International (Bermuda) Ltd., La Prairie Group
           Contractors  (International) Ltd.,  San  Lorenzo  Ruiz
           Builders and Developers Group, Inc., Chemical Trust Company of 
           California, Far East Bank & Trust Company and the Company 
           (incorporated by reference to Exhibit 4.4 the Company's Form S-4).

4.6        Deposit and Disbursement Agreement, dated as of November 27, 1995, 
           by and among the Company, Chemical Trust Company of California, 
           Kiewit Energy  Company  and  the  Company  (incorporated  by
           reference to the Company's Form S-4).

4.7        Consent of NIA, dated as of November 10, 1995, to  the
           assignment of the  Amended  and Restated Casecnan Project Agreement
           (incorporated by reference to Exhibit 4.7 to the Company's Form S-4).


4.8        Consent of the Republic of Philippines, dated November
           10, 1995, to the assignment of the Performance Undertaking and the
           Amended and Restated Casecnan Project Agreement (incorporated  by
           reference to Exhibit 4.8 to the Company's Form S-4).

<PAGE>


4.9        Consent  of Hanbo Corporation and You One  Engineering
           and Construction Company, Ltd., dated as of November 17, 1995, to 
           the assignment of the Engineering, Procurement and Construction 
           Contract (incorporated by reference to Exhibit 4.9 to the Company's 
           Form S-4).

4.10       Consent of Hanbo Steel, dated as of November 17, 1995, to the 
           assignment of the Guaranty of Engineering, Procurement and
           Construction Contract (incorporated by reference to Exhibit 4.10 
           to the Company's Form  S-4).

4.11       Notification, dated as of November 27, 1995, from the Company to
           Korea First Bank, of the assignment of the Irrevocable Letter
           of Credit (incorporated by reference to Exhibit 4.11 to the 
           Company's Form S-4).

10.1       Amended and Restated Casecnan Project Agreement, dated as of
           June 26, 1995, between the National Irrigation Administration and
           the Company (incorporated by reference to Exhibit 10.1 the
           Company's Form S-4).

10.2       Performance Undertaking, dated as of  July  20,  1995,
           executed by the Secretary of Finance on behalf of the Republic of  
           the Philippines (incorporated by reference to Exhibit 10.2 to the 
           Company's Form S-4).

10.3       Engineering,  Procurement and  Construction  Contract,
           dated as of October 10, 1995, by and among Hanbo Corporation,  You
           One Engineering  and Construction Company, Ltd. and the Company
           (incorporated  by  reference  to  Exhibit  10.3   the
           Company's Form S-4)

10.4       Master Equipment Lease Agreement, dated as of November 1, 1995,
           between  You One Engineering and Construction Company, Ltd.
           and  the Company (incorporated by reference to Exhibit
           10.4 the Company's Form S-4).

10.5       Sublease Agreement No. 1, dated as of November 1, 1995, between
           You One Engineering and Construction Company, Ltd. and the
           Company (incorporated by reference to Exhibit 10.5 the Company's
           Form S-4).

10.6       Guaranty of Engineering, Procurement and  Construction Contract,
           dated as of November 13, 1995, by Hanbo Steel guaranteeing the
           performance of the obligations of Hanbo Corporation and You
           One  Engineering and Construction Company, Ltd.  under the
           Engineering  Procurement  and  Construction  Contract (incorporated
           by reference to Exhibit 10.6 to the Company's Form  S-4).

10.7       Korea First Bank Irrevocable Letter of Credit issued to the Company
           in the aggregate principal amount of U.S.$117,850,000.00 to support
           the  obligations of Hanbo Corporation and You One Engineering
           and  Construction Company, Ltd. under the Engineering, Procurement
           and Construction Contract (incorporated by reference to
           Exhibit 10.7 to the Company's Form S-4).

10.8       Engineering,  Procurement  and  Construction  Contract
           between CE Casecnan Water & Energy Company, Inc. and CP Casecnan -
            Consortium.

24        Power of Attorney

27        Financial Data Schedule