UNITED STATES
                       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, 2000

                          Commission File No. 333-89521

                               CE Generation, LLC.
             (Exact name of registrant as specified in its charter)

     Delaware                                              47-0818523
 (State or other jurisdiction of                        (I.R.S. Employer
 Incorporation or organization)                         Identification No.)

 302 South 36th Street, Suite 400 Omaha, NE               68131
 (Address of principal executive offices)               (Zip Code)

       Registrant's telephone number, including area code: (402) 341-4500

         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 ]

     The members  equity  accounts are held 50% by MidAmerican  Energy  Holdings
Company and 50% by El Paso CE Generation Holding Company as of March 28, 2001.
<PAGE>

                                TABLE OF CONTENTS


Part I.......................................................................  1
   Item 1.  Business.........................................................  1
    General..................................................................  1
     The Projects............................................................  2
     Geothermal Facilities...................................................  2
     Gas Facilities..........................................................  4
    Description of the Securities............................................  5
    General..................................................................  5
    Collateral for the Securities............................................  6
    Payment of Interest and Principal........................................  6
    Interest.................................................................  6
    Principal................................................................  6
    Priority of Payments.....................................................  8
    Debt Service Reserve Account.............................................  8
    Optional Redemption......................................................  8
    Mandatory Redemption--At Par.............................................  8
    Mandatory Redemption--With Yield Maintenance Premium.....................  8
    Distributions............................................................  8
    Nature of Recourse on the Securities.....................................  9
    Covenants................................................................  9
    Employees................................................................  9
  Item 2. Properties.........................................................  9
  Item 3. Legal Proceedings.................................................. 10
  Item 4. Submission of Matters to a Vote of Security Holders................ 11

Part II...................................................................... 12
  Item 5.  Market for Registrant's Common Equity and Related Stockholder's
        Matters ............................................................. 12
  Item 6. Selected Financial Data............................................ 13
  Item 7. Management's Discussion and Analysis of Financial Condition and
        Results of Operations ............................................... 14
  Item 7A. Qualitative and Quantitative Disclosures About Market Risk........ 14
  Item 8. Financial Statements and Supplementary Data........................ 22
  Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure................................................. 45

Part III......................................................................46
  Item 10.  Directors and Executive Officers..................................46
  Item 11.  Executive Compensation............................................48
  Item 12. Security Ownership of Certain Beneficial Owners and Management ....48
  Item 13.  Certain Relationships and Related Transactions....................48

Part IV.......................................................................49
 Item 14.  Exhibits, Financial Statements Schedule and Reports on Form 8-K....49

SIGNATURES....................................................................50

Exhibit Index.................................................................51
<PAGE>

                                     PART I

Item 1.  Business

General

CE Generation,  LLC ("CE  Generation" or the  "Company"),  is a special  purpose
Delaware  limited  liability  company  created by  MidAmerican  Energy  Holdings
Company ("MEHC" or  "MidAmerican")  on February 8, 1999, for the sole purpose of
issuing securities and holding the equity  investments in certain  subsidiaries.
On March 3, 1999,  MEHC sold 50% of its ownership  interests in CE Generation to
El Paso CE  Generation  Holding  Company  which was merged into El Paso Merchant
Energy Holding  Company on December 31, 2000 ("El Paso Power"),  a subsidiary of
El Paso Corporation ("El Paso"). The principal executive office of CE Generation
is located at 302 South 36th Street,  Omaha,  Nebraska  68131 and its  telephone
number is (402) 341-4500.

Due to the then  pending  merger  of MEHC  with an  electric  utility,  MEHC was
required to divest a portion of its ownership  interests in the Company's  power
projects  in  order to  permit  those  projects  to  maintain  their  status  as
qualifying facilities ("QFs") under the Public Utilities Regulatory Policies Act
of 1978. This law requires that a non-electric utility own at least 50% of a QF.
The sale to El Paso Power, which does not own an electric utility,  was intended
to permit the Company's power projects to satisfy this ownership requirement. By
maintaining QF status, the Company's power projects are entitled to an exemption
from federal and state utility regulation under the Public Utilities  Regulatory
Policies Act and are able to maintain  compliance  with the  provisions of their
current power purchase agreements which require that they be QFs during the term
of those agreements.

The  Company's  limited  liability  company  operating  agreement  provides that
MidAmerican  and El Paso Power each are entitled to appoint 50% of the directors
and are entitled to 50% of the distributions made by the Company.

CE  Generation  owns all of the common stock  interests  in Magma Power  Company
("Magma"),  FSRI  Holdings,  Inc.  ("FSRI") and  California  Energy  Development
Corporation  ("CEDC")  and their  subsidiaries.  Through  its  subsidiaries,  CE
Generation is primarily  engaged in the development,  ownership and operation of
environmentally  responsible  independent  power  production  facilities  in the
United States utilizing geothermal and natural gas resources.  CE Generation has
an aggregate net ownership interest of 756 MW of electrical  generating capacity
in power plants in operation or under  construction in the United States,  which
have an aggregate net capacity of 816 MW.


<PAGE>


The Projects

The following table sets out information concerning CE Generation projects:

PROJECT..FUEL.....        COMMERCIAL        CAPACITY     LOCATION
                                       OPERATION

Vulcan               Geothermal       1986             34 MW          California
Del Ranch            Geothermal       1989             38 MW          California
Elmore               Geothermal       1989             38 MW          California
Leathers             Geothermal       1990             38 MW          California
CE Turbo             Geothermal       2000             10 MW          California
Salton Sea I         Geothermal       1987             10 MW          California
Salton Sea II        Geothermal       1990             20 MW          California
Salton Sea III       Geothermal       1989             49.8 MW        California
Salton Sea IV        Geothermal       1996             39.6 MW        California
Salton Sea V         Geothermal       2000             49 MW          California
Power Resources      Gas              1988             200 MW         Texas
Yuma                 Gas              1994             50 MW          Arizona
Saranac              Gas              1994             240 MW         New York

Geothermal Facilities

CE Generation affiliates currently operate ten geothermal plants in the Imperial
Valley in California.  The Partnership Projects consist of the Vulcan, Hoch (Del
Ranch), Elmore,  Leathers and CE Turbo projects (the "Vulcan Project," the "Hoch
(Del Ranch)  Project,"  the "Elmore  Project",  the  "Leathers  Project" and "CE
Turbo" or "Turbo  Project"  respectively).  The Turbo  Project,  a wholly  owned
subsidiary of Magma, commenced operations in 2000.

The remaining  five  operating  Imperial  Valley Project plants (the "Salton Sea
Projects") are wholly owned by subsidiaries  of Magma.  These  geothermal  power
plants  consist of the Salton Sea I project (the  "Salton Sea I  Project"),  the
Salton Sea II project (the "Salton Sea II Project"),  the Salton Sea III project
(the "Salton Sea III Project") and the Salton Sea IV project (the "Salton Sea IV
Project").  The fifth  plant,  the  Salton  Sea V  Project  (the  "Salton  Sea V
Project") commenced commercial operations in 2000.

The Vulcan Project  contracts to sell electricity to Southern  California Edison
("Edison") under a 30-year Standard Offer No. 4 Agreement ("SO4 Agreement") that
commenced on February 10, 1986. The Vulcan  Project has a contract  capacity and
contract nameplate of 29.5 MW and 34 MW, respectively.  Under the SO4 Agreement,
Edison is obligated  to pay the Vulcan  Project a capacity  payment,  a capacity
bonus payment and an energy payment. The price for contract capacity payments is
fixed for the life of such SO4  Agreement.  The  as-available  capacity price is
based on a payment  schedule  as  approved  by the CPUC  from time to time.  The
contract  energy  payment  increased  each year for the first ten  years,  which
period expired on February 9, 1996. Thereafter, the energy payments are based on
Edison's Avoided Cost of Energy.

The Hoch (Del Ranch)  Project  contracts to sell  electricity  to Edison under a
30-year SO4 Agreement that  commenced on January 2, 1989. The contract  capacity
and contract nameplate are 34 MW and 38 MW, respectively. The provisions of such
SO4 Agreement are  substantially  the same as the SO4 Agreement  with respect to
the Vulcan Project.  The price for contract  capacity  payments is fixed for the
life of the SO4  Agreement.  The fixed price period for energy  payments per kWh
expired  on  January  1, 1999.  Thereafter,  the  energy  payments  are based on
Edison's Avoided Cost of Energy.
<PAGE>

The Elmore Project  contracts to sell  electricity to Edison under a 30-year SO4
Agreement that commenced on January 1, 1989. The contract  capacity and contract
nameplate  are 34 MW and  38  MW,  respectively.  The  provisions  of  such  SO4
Agreement are  substantially  the same as the SO4 Agreement  with respect to the
Vulcan Project.  The price for contract  capacity payments is fixed for the life
of SO4 Agreement.  The fixed price period for energy payments per kWh expired on
December 31, 1998. Thereafter, the energy payments are based on Edison's Avoided
Cost of Energy.

The Leathers  Project  contracts  to sell  electricity  to Edison  pursuant to a
30-year SO4 Agreement that  commenced on January 1, 1990. The contract  capacity
and contract nameplate are 34 MW and 38 MW, respectively. The provisions of such
SO4 Agreement are  substantially  the same as the SO4 Agreement  with respect to
the Vulcan Project.  The price for contract  capacity  payments is fixed for the
life of the SO4 Agreement  which expired on December 31, 1999.  Thereafter,  the
energy payments will be based on Edison's Avoided Cost of Energy.

The Salton Sea I Project  contracts to sell  electricity to Edison pursuant to a
30-year  negotiated  power  purchase  agreement,  as amended  (the "Salton Sea I
PPA"),  which provides  capacity and energy payments.  The contract capacity and
contract  nameplate  are each 10 MW. The  capacity  payment is based on the firm
capacity  price which is currently  $132.58 per kW-year.  The contract  capacity
payment  adjusts  quarterly  based on a basket of energy indices for the term of
the  Salton  Sea I PPA.  The energy  payment  is  calculated  using a Base Price
(defined as the initial value of the energy payment (4.701 cents per kWh for the
second quarter of 1992)),  which is subject to quarterly  adjustments based on a
basket of indices.  The time period  weighted  average energy payment for Salton
Sea I was 5.7 cents per kWh during  2000.  As the Salton Sea I PPA is not an SO4
Agreement, the energy payments do not revert to Edison's Avoided Cost of Energy.

The Salton Sea II Project  contracts to sell electricity to Edison pursuant to a
30-year  modified SO4 Agreement  that  commenced on April 5, 1990.  The contract
capacity and contract  nameplate are 15 MW (16.5 MW during on-peak  periods) and
20 MW,  respectively.  The contract  requires Edison to make capacity  payments,
capacity bonus payments and energy payments. The price for contract capacity and
contract  capacity  bonus  payments  is fixed for the life of the  modified  SO4
Agreement.  The energy  payments  for the first  ten-year  period,  which period
expired on April 4, 2000,  were levelized at a time period  weighted  average of
10.6  cents  per kWh.  Thereafter,  the  monthly  energy  payments  are based on
Edison's Avoided Cost of Energy.  Edison is entitled to receive,  at no cost, 5%
of all energy delivered in excess of 80% of contract  capacity through September
30, 2004.

The Salton Sea III Project contracts to sell electricity to Edison pursuant to a
30-year modified SO4 Agreement that commenced on February 13, 1989. The contract
capacity is 47.5 MW and the  contract  nameplate  is 49.8 MW. The SO4  Agreement
requires  Edison to make capacity  payments,  capacity bonus payments and energy
payments  for the life of the SO4  Agreement.  The price for  contract  capacity
payments and capacity  bonus  payments is fixed at $175/kW per year.  The energy
payments for the first  ten-year  period,  which period  expired on February 12,
1999,  were  levelized at a time period  weighted  average of 9.8 cents per kWh.
Thereafter,  the monthly energy  payments are based on Edison's  Avoided Cost of
Energy.

The Salton Sea IV Project  contracts to sell electricity to Edison pursuant to a
modified SO4 Agreement which provides for contract capacity payments on 34 MW of
capacity at two  different  rates based on the  respective  contract  capacities
deemed  attributable  to the original Salton Sea I PPA option (20 MW) and to the
original  Salton Sea IV SO4  Agreement  ("Fish Lake PPA") (14 MW).  The capacity
payment  price for the 20 MW portion  adjusts  quarterly  based  upon  specified
indices  and  the  capacity  payment  price  for  the 14 MW  portion  is a fixed
levelized  rate. The energy payment (for  deliveries up to a rate of 39.6 MW) is
at a fixed price for 55.6% of the total energy delivered by Salton Sea IV and is
based on an energy payment  schedule for 44.4% of the total energy  delivered by
Salton Sea IV. The  contract  has a 30-year  term but Edison is not  required to
purchase the 20 MW of capacity and energy originally  attributable to the Salton
Sea I PPA option after September 30, 2017, the original  termination date of the
Salton Sea I PPA.
<PAGE>

The Turbo Project,  which commenced commercial operation in the third quarter of
2000, sold its output through market transactions The Turbo Project may sell its
output to a zinc facility,  which is owned by a subsidiary of MidAmerican and is
expected to commence operations in mid-2001.

Salton Sea Unit V Project,  which  commenced  operations in the third quarter of
2000,  will sell  approximately  one-third of its net output to a zinc facility,
which is owned by a  subsidiary  of  MidAmerican  and is  expected  to  commence
operations  in mid-2001.  The  remainder of the Salton Sea Unit V output in 2000
was sold through other market transactions.

On January 17, 2001,  Salton Sea Power and CE Turbo entered into an agreement to
sell  available  power from  Salton Sea Unit V and CE Turbo to El Paso  Merchant
Energy, L.P. ("EPME"). Under the terms of the agreement, at the option of Salton
Sea Power and CE Turbo,  EPME will purchase all available  power from the Salton
Sea Unit V and CE Turbo based on day ahead price quotes received from EPME.

Gas Facilities

The Yuma Project is a 50 net MW natural gas-fired  cogeneration project in Yuma,
Arizona  providing  50 MW of  electricity  to San Diego Gas &  Electric  Company
("SDG&E") under an existing  30-year power purchase  contract ("Yuma PPA").  The
energy is sold at SDG&E's  Avoided  Cost of Energy and the  capacity  is sold to
SDG&E at a fixed  price for the life of the Yuma PPA.  The power is  wheeled  to
SDG&E over  transmission  lines  constructed and owned by Arizona Public Service
Company ("APS").  The Yuma Project commenced  commercial  operation in May 1994.
The project entity,  Yuma Cogeneration  Associates  ("YCA"),  has executed steam
sales  contracts with Queen Carpet,  Inc. to act as its thermal host.  Since the
industrial  entity has the right under its  agreement to terminate the agreement
upon one year's  notice if a change in its  technology  eliminates  its need for
steam,  and in any case to terminate  the agreement at any time upon three years
notice, there can be no assurance that the Yuma Project will maintain its status
as a QF.  However,  if the  industrial  entity  terminates  the  agreement,  YCA
anticipates that it will be able to locate an alternative  thermal host in order
to  maintain  its  status  as a QF. A  natural  gas  supply  and  transportation
agreement has been executed with  Southwest Gas  Corporation,  terminable  under
certain circumstances by YCA and Southwest Gas Corporation.

The  Saranac  Project is a 240 net MW natural  gas-fired  cogeneration  facility
located in Plattsburgh, New York, which began commercial operation in June 1994.
The Saranac  Project has entered into a 15-year power  purchase  agreement  (the
"Saranac PPA") with New York State Electric & Gas ("NYSEG"). The Saranac Project
is a QF and has entered into 15-year  steam  purchase  agreements  (the "Saranac
Steam  Purchase  Agreements")  with  Georgia-Pacific   Corporation  and  Tenneco
Packaging,  Inc. The Saranac  Project has a 15-year  natural gas supply contract
(the "Saranac Gas Supply  Agreement") with Shell Canada Limited ("Shell Canada")
to supply 100% of the  Saranac  Project's  fuel  requirements.  Shell  Canada is
responsible  for  production  and  delivery of natural gas to the  U.S.-Canadian
border;  the  gas  is  then  transported  by  the  North  Country  Gas  Pipeline
Corporation ("NCGP") the remaining 22 miles to the plant. NCGP is a wholly-owned
subsidiary of Saranac Power Partners,  L.P. (the "Saranac  Partnership") and the
Saranac Partnership also owns the Saranac Project.  NCGP also transports gas for
NYSEG and  Georgia-Pacific.  Each of the Saranac PPA, the Saranac Steam Purchase
Agreements  and the Saranac Gas Supply  Agreement  contains rates that are fixed
for the  respective  contract  terms.  The 2000 Saranac PPA rates  escalate at a
higher  percentage than fuel rates. The Saranac  Partnership is indirectly owned
by  subsidiaries  of CE  Generation,  Tomen  Corporation  ("Tomen")  and General
Electric Capital Corporation ("GECC").

On February  14, 1995,  NYSEG filed with the FERC a Petition  for a  Declaratory
Order,  Complaint,  and  Request  for  Modification  of Rates in Power  Purchase
Agreements  Imposed  Pursuant to the Public Utility  Regulatory  Policies Act of
1978  ("Petition")  seeking  FERC (i) to declare that the rates NYSEG pays under
the Saranac PPA,  which was approved by the New York Public  Service  Commission
(the  "PSC"),  were in  excess of the level  permitted  under  PURPA and (ii) to
authorize  the PSC to reform the  Saranac  PPA. On March 14,  1995,  the Saranac

<PAGE>

Partnership intervened in opposition to the Petition asserting, inter alia, that
the Saranac PPA fully complied with PURPA,  that NYSEG's action was untimely and
that the FERC lacked authority to modify the Saranac PPA. On April 12, 1995, the
FERC by a unanimous  (5-0) decision issued an order denying the various forms of
relief  requested by NYSEG and finding that the rates required under the Saranac
PPA were  consistent  with PURPA and the FERC's  regulations.  On May 11,  1995,
NYSEG  requested  rehearing of the order and, by order issued July 19, 1995, the
FERC  unanimously  (5-0)  denied  NYSEG's  request.  On  June  14,  1995,  NYSEG
petitioned  the United  States  Court of Appeals  for the  District  of Columbia
Circuit (the "Court of Appeals") for review of FERC's April 12, 1995 order. FERC
moved to dismiss NYSEG's petition for review on July 28, 1995. On July 11, 1997,
the Court of Appeals dismissed NYSEG's appeal from FERC's denial of the petition
on jurisdictional grounds.

On August 7, 1997,  NYSEG filed a complaint in the U.S.  District  Court for the
Northern  District  of New York  against  the FERC,  the PSC (and the  Chairman,
Deputy  Chairman  and the  Commissioners  of the  PSC as  individuals  in  their
official capacity), the Saranac Partnership and Lockport Energy Associates, L.P.
("Lockport")  concerning the power purchase  agreements  that NYSEG entered into
with Saranac  Partners and  Lockport.  NYSEG's suit asserts that the PSC and the
FERC improperly  implemented  PURPA in authorizing the pricing terms that NYSEG,
the Saranac  Partnership and Lockport agreed to in those  contracts.  The action
raises  similar legal  arguments to those  rejected by the FERC in its April and
July 1995 orders.  NYSEG in addition  asks for  retroactive  reformation  of the
contracts  as of the date of  commercial  operation  and  seeks a refund of $281
million from the Saranac Partnership.  The Saranac Partnership and other parties
have filed motions to dismiss and oral  arguments on those motions were heard on
March 2, 1998 and again on March 3, 1999.  On  September  30, 2000 the  District
Court granted the motions to dismiss.  NYSEG filed a Notice of Appeal on October
25, 2000  appealing  the decision to the United  States Court of Appeals for the
Second  Circuit.  NYSEG filed its appellate  brief on February 9, 2001. On March
12, 2001 Saranac filed its  appellate  brief.  Oral  arguments on the appeal are
expected to occur  during the second  quarter of 2001.  The Saranac  Partnership
believes that NYSEG's claims are without merit for the same reasons described in
the FERC's orders and the District Court's decision.

The Power  Resources  Project  is a 200 net MW  natural  gas-fired  cogeneration
project  located  near Big Spring,  Texas,  which has a 15-year  power  purchase
agreement (the "Power Resources PPA") with Texas Utilities Electric Company. The
Power  Resources  Project  began  commercial  operation in June 1988.  The Power
Resources  Project is a QF and the project entity,  Power Resources Ltd. ("Power
Resources"),  has entered into a 15-year steam  purchase  agreement  (the "Power
Resources  Steam  Purchase  Agreement")  with  Fina  Oil  and  Chemical  Company
("Fina"), a subsidiary of Petrofina S.A. of Belgium. Power Resources has entered
into an agreement (the "CE Texas Gas Supply  Agreement")  with CE Texas Gas L.P.
("CE Texas Gas") for Power Resources' fuel  requirements  through December 2003.
In June  1995,  CE Texas Gas and Louis  Dreyfus  Natural  Gas Corp.  ("Dreyfus")
executed an eight-year  natural gas supply agreement (the "CE Texas  Gas-Dreyfus
Gas  Supply  Agreement"),  with  which CE  Texas  Gas will  fulfill  its  supply
commitment  to the Power  Resources  Project from October 1995 to the end of the
term of the Power  Resources  PPA.  Each of the Power  Resources  PPA, the Power
Resources  Steam  Purchase  Agreement  and the CE  Texas  Gas  Supply  Agreement
contains  rates  that are  fixed for the  respective  contract  terms.  Revenues
escalate at a higher rate than fuel costs. The Power Resources Project is wholly
owned by subsidiaries of the Company.

                          DESCRIPTION OF THE SECURITIES

The following is a description of important  provisions of the  securities.  The
following  information  does not  purport  to be a complete  description  of the
securities and is subject to, and qualified in its entirety by, reference to the
securities  and  the  indenture.   Unless  otherwise  specified,  the  following
description applies to all of the securities.

General
<PAGE>

The securities are direct senior obligations of CE Generation,  issued under the
indenture for the securities and secured by the  collateral.  The old securities
were issued in fully  registered form and in  denominations  of $100,000 and any
integral multiple of $1,000 in excess of $100,000.

On March 2, 1999,  CE  Generation  issued  securities  in a single series in the
aggregate principal amount of $400 million,  bearing interest from their date of
issuance at 7.416% per annum and finally  maturing on December 15,  2018.  These
securities  were  issued  in  reliance  on  exemptions  from  the   registration
requirements  of the Securities  Act. On March 6, 2000, CE Generation  exchanged
$400,000,000  principal amount of these  securities for  $400,000,000  principal
amount of securities  which have been  registered  under the Securities Act. The
form and terms of these new securities are identical in all material respects to
the securities for which they were exchanged  except that transfer  restrictions
and registration rights applicable to the old securities do not apply to the new
securities.

The indenture  provides for the issuance of the  securities  and other series of
senior notes or securities as from time to time may be authorized by us, subject
to the limitations set forth in the indenture.

Collateral for the Securities

The securities are secured by the following  collateral:  (a) all available cash
flow of the assigning  subsidiaries  deposited with the  depository  bank; (b) a
pledge of 99% of the equity interests in Salton Sea Power Company and all of the
equity  interests in CE Texas Gas LLC, the  assigning  subsidiaries  (other than
Magma Power  Company),  and  California  Energy Yuma  Corporation;  (c) upon the
redemption of, or earlier release of security  interests  under,  Magma's 9 7/8%
promissory notes, a pledge of all of the capital stock of Magma; (d) a pledge of
all of the capital  stock of SECI  Holdings  Inc.;  (e) a grant of a lien on and
security  interest  in the  depository  accounts;  and a grant  of a lien on and
security  interest  in all of CE  Generation's  other  tangible  and  intangible
property, to the extent it is possible to grant a lien on the property.

Payment of Interest and Principal

Interest

Interest on the  securities is payable  semiannually  in arrears on each June 15
and  December  15 to the  registered  holders  at the close of  business  on the
preceding June 1 or December 1. Interest is calculated on the basis of a 360-day
year, consisting of twelve 30-day months.

Principal

The  principal of the  securities  will be payable in  semiannual  installments,
commencing June 15, 2000, as follows:

PAYMENT DATE               PERCENTAGE OF
                            PRINCIPAL AMOUNT
                            PAYABLE

June 15, 2000              1.300%
December 15, 2000          1.300%
June 15, 2001              1.575%
December 15, 2001          1.575%
June 15, 2002              2.575%
December 15, 2002          2.575%
June 15, 2003              2.250%
December 15, 2003          2.250%

<PAGE>

June 15, 2004              1.825%
December 15, 2004          1.825%
June 15, 2005              1.850%
December 15, 2005          1.850%
June 15, 2006              2.400%
December 15, 2006          2.400%
June 15, 2007              2.250%
December 15, 2007          2.250%
June 15, 2008              3.525%
December 15, 2008          3.525%
June 15, 2009              3.075%
December 15, 2009          3.075%
June 15, 2010              1.775%
December 15, 2010          1.775%
June 15, 2011              1.900%
December 15, 2011          1.900%
June 15, 2012              2.560%
December 15, 2012          2.560%
June 15, 2013              2.550%
December 15, 2013          2.550%
June 15, 2014              3.225%
December 15, 2014          3.225%
June 15, 2015              3.380%
December 15, 2015          3.380%
June 15, 2016              3.660%
December 15, 2016          3.660%
June 15, 2017              3.780%
December 15, 2017          3.780%
June 15, 2018              4.545%
December 15, 2018          4.545%
<PAGE>

Priority of Payments

All  available  cash  flows  received  by CE  Generation  shall be paid into the
Revenue  Account  maintained  by a  Depository.  Amounts  paid into the  Revenue
Account shall be  distributed in the following  order:  (a) to pay operating and
administrative  costs of CE Generation and it's  subsidiaries,  excluding  those
costs payable to affiliated parties; (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  and the Debt
Service Reserve Bonds, if any, and interest and certain fees payable to the Debt
Service  Reserve LOC provider;  (d) to pay principal of Debt Service Reserve LOC
Loans and certain  related fees and charges;  (e) to replenish  any shortfall in
the Debt Payment  Account;  (f) to replenish  any  shortfall in the Debt Service
Reserve Account;  (g) to pay any remaining amounts to the Distribution  Suspense
Account.

Debt Service Reserve Account

A Debt Service  Reserve Fund for the benefit of the Security  Holders  issued by
Credit  Suisse First  Boston and Lehman  Commercial  Paper Inc.,  which has been
funded by a Debt Service Reserve Letter of Credit Provider has been  established
under the Depository  Agreement.  If the amounts available to be drawn under the
Debt  Service  Reserve  Letter of Credit and all other  amounts held in the Debt
Service  Reserve  Account  from time to time do not equal the then  current debt
service reserve required balance,  the Debt Service Reserve Fund shall be funded
from the Revenue Account subject to the funding of requests described above. The
debt service reserve required balance on any date equals the maximum  semiannual
principal and interest payment due on the securities for the remaining term. Any
Debt Service Reserve Letter of Credit must be issued by a financial  institution
rated at least "A" by S&P and "A2" by Moody's.

Optional Redemption

The securities are subject to optional  redemption,  in whole or in part, at any
time on any  business  day,  at a price  equal to the  redemption  price  plus a
premium  calculated to "make whole" to comparable U.S. Treasury  Securities plus
50 basis points.

Mandatory Redemption--At Par

The securities are subject to mandatory redemption, at par plus accrued interest
to the  Redemption  Date,  (a) upon the  occurrence  of certain  events of loss,
expropriation or title defects related to CE Generation or its subsidiaries;  or
(b) if a permitted  power  contract  buy-out  occurs unless the Rating  Agencies
confirm the then current rating of the securities.

Mandatory Redemption--With Yield Maintenance Premium

The securities are subject to mandatory redemption, at par plus accrued interest
and a yield  maintenance  premium to the  Redemption  Date upon certain  project
refinancing  or  project  debt  refinancing  or upon  certain  asset  or  equity
interests sales.

Distributions

Distributions  may be made only from and to the  extent of monies on  deposit in
the Distribution  Suspense  Account,  on any funding date on which the following
conditions are satisfied:

(a)           the debt payment  account and the debt service reserve account are
              funded  to the  then  current  required  levels  and the  payments
              described in the first,  second,  sixth and seventh  priorities of
              payments described above are satisfied in full;
<PAGE>

(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  four fiscal
              quarters  ending on or prior to the funding date,  measured as one
              period, is greater or equal to 1.5 to 1.0;

(d)           the projected debt service  coverage ratio for the succeeding four
              fiscal  quarters,  including the quarter in which the distribution
              is to be made, measured as one period, is greater than or equal to
              1.5 to 1.0; and

(e)           no  material  default  or event of  default  has  occurred  and is
              continuing  under any project  financing  document for the Saranac
              Project,  the Power  Resources  Project,  the Yuma  Project or the
              Imperial Valley Projects.

Nature of Recourse on the Securities

The  obligation  to pay  principal  of,  premium  (if any) and  interest  on the
securities are obligations  solely of CE Generation,  secured by the collateral.
Neither  MidAmerican  nor El  Paso,  nor  any  affiliate,  shareholder,  member,
officer, director or employee of CE Generation or of MidAmerican or El Paso will
guarantee the payment of the  securities or has any  obligation  with respect to
the securities (other than the assignment by the assigning subsidiaries of their
available  cash  flows  to  secure  the  obligation  to  make  payments  on  the
securities).

Covenants

Principal  covenants  under the  indenture  require CE  Generation,  among other
things,  (a) to maintain  its  existence,  (b) comply with  applicable  laws and
governmental  approach,  (c) perform  required  obligations  under the financing
documents,  (d) maintain the liens on the  collateral in favor of the collateral
agent,  (f) not to incur any debt except permitted debt and lien upon any of its
properties  except  permitted  liens,  and (g) not form any  subsidiaries,  make
investments,  loans or  advances  or  acquisitions,  in each case  other than as
permitted under the indenture.

Employees

Employees necessary for the operation of the CE Generation projects are provided
by CalEnergy Operating  Corporation  ("CEOC") and Falcon Power Operating Company
("FPOC"),   indirect   subsidiaries  of  CE  Generation,   under  operation  and
maintenance agreements. As of December 31, 2000, CEOC and FPOC, employed 197 and
62 people full-time, respectively.

MidAmerican agreed to provide administrative and management services,  including
accounting,  legal,  human  resources,  cash  management  and energy  production
oversight services,  to the Company under an administrative  services agreement.
MidAmerican  is  reimbursed  for its actual costs and expenses of providing  the
services. Other affiliates of El Paso agreed to provide power marketing and fuel
management  services  to the Company in return for  reimbursement  of its actual
costs and expenses of providing  the  services.  These  agreements  each have an
initial term of one year and then continue from year to year until terminated by
either party. The Company also entered into an agreement with MidAmerican and El
Paso  Power to  provide  El Paso  Power  with a right of first  refusal  for the
Company  to  participate  in the  development  of any  future  geothermal  power
projects or combined  geothermal power and mineral recovery projects proposed by
MidAmerican  in the area of the geothermal  reservoir  that  currently  supplies
geothermal  resources to the Imperial  Valley projects in return for the payment
of a royalty to  MidAmerican.  If the  Company  elects not to  participate,  the
agreement gives  MidAmerican the right to develop the new project upon a showing
that there are sufficient  geothermal resources for both the new project and the
Company's existing projects.
<PAGE>

Item 2. Properties

The Company's most significant physical properties,  are its current interest in
operating  power  facilities,  its plants  under  construction  and related real
property  interests.  The Company also  maintains an inventory of  approximately
75,000 acres of geothermal  property  leases.  Certain of the producing  acreage
owned by Magma is leased to Mammoth-Pacific as owner and operator of the Mammoth
Plants,  and Magma,  as lessor,  receives  royalties from the revenues earned by
such power plants. The Company, as lessee, pays certain royalties and other fees
to the  property  owners and other  royalty  interest  holders  from the revenue
generated by the Imperial Valley Project.

Lessors  and  royalty  holders  are  generally  paid a monthly or annual  rental
payment  during the term of the lease or mineral  interest  unless and until the
acreage goes into  production,  in which case the rental typically stops and the
(generally  higher)  royalty  payments  begin.  Leases of federal  property  are
transacted with the Department of Interior, Bureau of Land Management,  pursuant
to standard geothermal leases under the Geothermal Steam Act and the regulations
promulgated  thereunder  (the  "Regulations"),  and are for a primary term of 10
years,  extendible for an additional five years if drilling is commenced  within
the primary term and is diligently pursued for two successive  five-year periods
upon certain conditions set forth in the Regulations.  A secondary term of up to
40 years is  available  so long as  geothermal  resources  from the property are
being produced or used in commercial quantities.  Leases of state lands may vary
in form.  Leases of  private  lands vary  considerably,  since  their  terms and
provisions are the product of negotiations with the landowners.

Item 3. Legal Proceedings

In addition to the proceedings described in Part 1, "The Projects, CE Generation
Gas  Facilities,  Saranac  Project"  above,  some of the projects are  currently
parties to various  minor  items of  litigation,  none of which,  if  determined
adversely, would have a material adverse effect on those projects.

Edison, a wholly-owned  subsidiary of Edison International,  is a public utility
primarily  engaged  in the  business  of  supplying  electric  energy  to retail
customers  in  Central  and  Southern  California,  excluding  Los  Angeles.  CE
Generation  is aware that there have been  public  announcements  that  Edison's
financial condition has deteriorated as a result of reduced liquidity.  Based on
public  announcements,  CE  Generation  understands  that  Edison  has not  made
payments to other  qualifying  facilities  ("QFs") from which  Edison  purchases
power and has not made  scheduled  payments  of debt  service.  Edison's  senior
unsecured  debt  obligations  are  currently  rated Caa2 (on watch for  possible
downgrade) by Moody's and D by S&P.

CE  Generation is aware that there have been public  announcements  that Edison,
other  industry  participants  and  governmental  entities have taken actions in
response to Edison's financial condition. These actions include the following:

o    The  Federal  Energy  Regulatory  Commission  ("FERC")  has issued an order
     eliminating   requirements  that  Edison  and  other  California  utilities
     purchase power from the structured  power market in California known as the
     California  Power  Exchange in order to provide them with an opportunity to
     obtain power from alternative sources at a lower cost.

o    The  State  of  California  has  enacted  legislation  to  provide  for the
     California  Department of Water  Resources to purchase  wholesale power and
     sell it to retail customers,  which will be funded by a surcharge on retail
     rates. The California  legislature is also considering other legislation to
     improve the financial condition of the California electric utilities.

o    The California Public Utilities  Commission ("CPUC") approved a decision on
     March 27, 2001 to increase retail  electricity rates by approximately  40%.
     In another decision that day, the CPUC and ordered Edison to pay the QFs on
     a go forward basis within 15 days of the invoice  modified the  purportedly
     calculation of Short Run Avoided Cost.

o    The State of California and Edison have  announced a preliminary  agreement
     for the State to purchase Edison's transmission assets for $2.7 billion and
     to  allow  Edison  to  issue  bonds  for  a  substantial   portion  of  its
     undercollection of revenues.
<PAGE>

CE  Generation  can give no  assurance  as to the  likely  result  of any of the
actions  described  above or as to  whether  such  actions  will have a positive
effect on the financial  condition of Edison or its willingness to make payments
under the Power Purchase Agreements.

Edison has failed to pay  approximately $76 million due under the Power Purchase
Agreements  for power  delivered in November and December 2000 and January 2001,
although  the Power  Purchase  Agreements  provide  for billing and payment on a
schedule  where  payments  would have normally  been received in early  January,
February and March 2001. Edison has not notified the Imperial Valley Projects as
to when they can expect to receive these payments. This continued non-payment by
Edison could result in an untenable situation for the continued operation of the
Imperial  Valley  Projects  unless  additional  funds are  obtained  in the near
future.

On February  21, 2001,  the Imperial  Valley  Projects  filed a lawsuit  against
Edison in  California's  Imperial  County  Superior  Court seeking a court order
requiring  Edison  to make  the  required  payments  under  the  Power  Purchase
Agreements. The lawsuit also requested, among other things, that the court order
permit the Imperial Valley Projects to suspend deliveries of power to Edison and
to permit the Imperial Valley Projects to sell such power to other purchasers in
California.

On March 22, 2001,  the Superior  Court  granted the Imperial  Valley  Projects'
Motion for Summary  Adjudication  and a Declaratory  Judgment  ordering that: 1)
under the Power Purchase Agreements, the Imperial Valley Projects have the right
to  temporarily  suspend  deliveries  of capacity  and energy to Edison,  2) the
Imperial Valley Projects are entitled to resell the energy and capacity to other
purchasers  and 3) the interim  suspension  of deliveries to Edison shall not in
any respect  result in the  modifications  or  termination of the Power Purchase
Agreements and the Power Purchase  Agreements shall in all respects  continue in
full force and effect  other than the  temporary  suspension  of  deliveries  to
Edison.  The Imperial Valley  Projects  intend to vigorously  pursue their other
remedies in this action in light of Edison's continuing non-payment.

CE Generation is hopeful that the current Edison  situation is temporary and the
proceedings in the legal,  regulatory,  financial and political arenas will lead
to the  improvement of Edison's  financial  condition in the near future and the
payment by Edison of amounts due under the Power Purchase  Agreements.  However,
no assurance can be given that this will be the case.

As a result  of  Edison's  failure  to make the  payments  due  under  the Power
Purchase  Agreements  and the recent  downgrades  of  Edison's  credit  ratings,
Moody's has downgraded the ratings for the Salton Sea Funding  Corporation  (the
"Funding  Corporation")  Securities  to  Caa2  (negative  outlook)  and  S&P has
downgraded  the ratings for the Funding  Corporation  Securities to BBB- and has
placed the  Securities  on "credit  watch  negative".  Accordingly,  the Funding
Corporation does not believe it is currently able to obtain funds in the banking
or capital markets.  However, a failure by Edison to make these payments as well
as  subsequent  monthly  payments,  for a  substantial  period of time after the
payments  are due,  is not  expected  to have a material  adverse  effect on the
ability of CE Generation to make payments on the CE Generation bonds due to cash
flows from the Gas  Projects.  However,  there can be no  assurance  that such a
failure by Edison would not cause a material adverse effect.

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

Not applicable.
<PAGE>

Part II

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

Not applicable.



<PAGE>


Item 6.  Selected Financial Data

                      SELECTED CONSOLIDATED FINANCIAL DATA

                                 (in thousands)

The selected data presented  below as of December 31, 2000,  1999, 1998 and 1997
and for the years ended December 31, 2000, 1999, 1998, 1997 and 1996 are derived
from CE Generation's audited consolidated financial statements. The consolidated
financial statements reflect the consolidated  financial statements of Magma and
subsidiaries (excluding wholly-owned subsidiaries retained by MidAmerican), FSRI
Holdings,  Inc.  and  subsidiaries  and  Yuma  Cogeneration  Associates,  each a
wholly-owned subsidiary of CE Generation.  The consolidated financial statements
present CE Generation's financial position, results of operations and cash flows
as if CE Generation were a separate legal entity for all periods presented.  The
selected data presented below as of December 31, 1996 are derived from unaudited
consolidated  financial statements and reflect all adjustments  necessary in the
opinion of our management for a fair presentation of the data.
<TABLE>
<CAPTION>

                                                                         YEAR ENDED DECEMBER 31,

                                                2000(1)          1999(2)        1998           1997          1996(3)
<S>                                          <C>             <C>            <C>            <C>           <C>
Statement of Operations Data:
Sales of electricity and thermal energy      $  499,926      $  295,787     $  395,560     $  381,458    $   281,307
Total revenue                                   510,796         340,683        436,175        407,138        304,843
Income before minority interest and
  extraordinary item                             89,148          61,970         93,778         69,996         46,211
Minority interest                               (15,613)            ---            ---            ---            ---
Extraordinary item (4)                              ---         (17,478)           ---            ---            ---
Net income                                       73,535          44,492         93,778         69,996         46,211
</TABLE>
<TABLE>
<CAPTION>

                                                                            AS OF DECEMBER 31,
                                                2000(1)           1999          1998           1997         1996(3)
Balance Sheet Data:
<S>                                          <C>             <C>            <C>            <C>           <C>
Total assets                                 $1,987,323      $1,725,411     $1,782,385     $1,560,874    $ 1,611,087
Project loans, including current portion        230,221          76,261         90,529        103,334        114,571
Salton Sea notes and bonds, including
  current portion                               543,908         568,980        626,816        448,754        538,982
Senior Secured Bonds, including current
  portion                                       389,600         400,000            ---            ---            ---
Total liabilities                             1,479,944       1,333,131      1,245,438      1,096,734      1,156,184
Net investments and advances
   (members' equity at
   December 31, 2000 and 1999)                  438,915         392,280        536,947        464,140        454,903
</TABLE>

(1) Reflects full  consolidation  of the Saranac  Project,  which was previously
accounted  for as an  equity  investment.  The 2000  results  also  reflect  the
addition of Salton Sea Unit V and CE Turbo Projects which  commenced  operations
in 2000.

(2) The decrease in revenue and net income in 1999 was due to the  expiration of
the fixed price  periods for the Elmore,  Del Ranch and Salton Sea III Projects.
(3) Reflects the  acquisition  of the remaining 50% of the Elmore,  Vulcan,  Del
Ranch and  Leathers  projects  on April 17, 1996 and the  acquisition  of Falcon
Seaboard Resources on August 7, 1996.

(4) The  extraordinary  item  recognized  in the year ended  December  31,  1999
reflects the early  redemption of  substantially  all of the  outstanding 9 7/8%
Limited Recourse Senior Secured Notes Due 2003.


<PAGE>


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

The following is  management's  discussion and analysis of  significant  factors
which  have  affected  CE  Generation's   financial  condition  and  results  of
operations  during  the  periods  included  in the  accompanying  statements  of
operations.   The   Company's   actual   results  in  the  future  could  differ
significantly from the historical results.

Business

MidAmerican  completed  a  strategic   restructuring  in  conjunction  with  its
acquisition of MHC Inc. (formerly  MidAmerican Energy Holdings Company) in which
MidAmerican's  common  stock  interests  in  Magma,  FSRI and  CEDC,  and  their
subsidiaries  (which own the  geothermal  and natural  gas-fired  combined cycle
cogeneration  facilities described below), were contributed by MidAmerican to CE
Generation. This restructuring was completed in February 1999.

On March 3, 1999,  MEHC closed the sale of 50% of its ownership  interests in CE
Generation to El Paso CE Generation  Holding  Company,  which was merged into El
Paso Merchant Energy Holding Company on December 31, 2000 ("El Paso Power").  El
Paso Power is an affiliate of El Paso Corporation.

The  consolidated   financial  statements  reflect  the  consolidated  financial
statements  of  Magma  and  subsidiaries  (excluding  wholly-owned  subsidiaries
retained by  MidAmerican),  FSRI and  subsidiaries  and YCA, each a wholly-owned
subsidiary.  The  consolidated  financial  statements  present  CE  Generation's
financial  position,  results of  operations  and cash flows as if CE Generation
were a separate legal entity for all periods presented.  The basis in assets and
liabilities have been carried over from MidAmerican.  All material  intercompany
transactions and balances have been eliminated in consolidation.

The Vulcan Project, Del Ranch Project,  Elmore Project,  Leathers Project and CE
Turbo  Project are  referred to as the  Partnership  Projects.  The Salton Sea I
Project,  Salton Sea II Project,  Salton Sea III Project,  Salton Sea IV Project
and Salton  Sea V Project  are  referred  to as the  Salton  Sea  Projects.  The
Partnership Projects and the Salton Sea Projects are collectively referred to as
the Imperial  Valley  Projects.  The Power Resources  Project,  Yuma Project and
Saranac Project are collectively referred to as the Gas Projects.

Factors Affecting Results of Operations

The capacity  factor for a particular  project is determined  by dividing  total
quantity of  electricity  sold by the product of the project's  capacity and the
total hours in the year.  The  capacity  factors for Vulcan  Project,  Hoch (Del
Ranch) Project,  Elmore Project,  Leathers Project, and Turbo Project plants are
based on capacity amounts of 34, 38, 38, 38 and 10 net megawatts,  respectively.
The capacity factors for Salton Sea Unit I Project,  Salton Sea Unit II Project,
Salton Sea Unit III Project,  Salton Sea Unit IV Project,  and Salton Sea Unit V
Project plants are based on capacity amounts of 10, 20, 49.8, 39.6, and 49.8 net
megawatts,  respectively.  The capacity factors for the Saranac  Project,  Power
Resources  Project and Yuma Project plants are based on capacity amounts of 240,
200 and 50 net megawatts, respectively. Each plant possesses an operating margin
which allows for production in excess of the amount listed above. Utilization of
this operating  margin is based upon a variety of factors and can be expected to
vary  throughout  the year  under  normal  operating  conditions.  The amount of
revenues  received by these projects is affected by the extent to which they are
able to operate and generate electricity. Accordingly, the capacity and capacity
factor figures provide  information on operating  performance  that has affected
the revenues received by these projects.

Effective  January  2000,  CE  Generation's  economic  ownership  in the Saranac
Project increased to approximately  64%. This increase resulted from TPC Saranac
achieving an after tax return of 8.35%. This achievement  resulted in lower cash
flows  to TPC  Saranac  and  higher  cash  flows  to CE  Generation.  Due to the
increased ownership,  the project is now fully consolidated into CE Generation's
results of  operations.  The project was  previously  accounted for as an equity
investment.
<PAGE>

Power Purchase Agreements

Imperial Valley Projects. The Partnership Projects (excluding CE Turbo) contract
to sell all electricity  generated by the respective plants under four long-term
SO4 Agreements between the Partnership Projects and Edison. These SO4 Agreements
provide for capacity  payments,  capacity  bonus  payments and energy  payments.
Edison  makes  fixed  annual   capacity  and  capacity  bonus  payments  to  the
Partnership  Projects to the extent that capacity factors exceed  benchmarks set
forth in the  agreements.  The price for capacity and capacity bonus payments is
fixed for the life of the SO4  Agreements.  Energy is sold at  increasing  fixed
rates for the first ten years after firm operation and thereafter at rates based
on the cost that Edison  avoids by  purchasing  energy from the Imperial  Valley
Partnership Projects instead of obtaining the energy from other sources.

The  scheduled  energy  price  periods of the  Partnership  Projects'  long-term
agreements  extended  until  February  1996,  December  1998,  December 1998 and
December 1999 for each of the Vulcan Project, Del Ranch Project,  Elmore Project
and Leathers Project, respectively.

Salton  Sea Unit I Project  contracts  to sell  electricity  to  Edison  under a
30-year  negotiated  power purchase  agreement,  which provides for capacity and
energy  payments.  The energy payment is calculated  using a base price which is
subject to quarterly  adjustments based on a basket of indices.  The time period
weighted  average  energy  payment  for  Salton  Sea  Unit I was 5.7  cents  per
kilowatt-hour  during 2000. As the Salton Sea Unit I PPA is not a SO4 Agreement,
the energy  payments  do not revert to  payments  based on the cost that  Edison
avoids by  purchasing  energy  from Salton Sea Unit I instead of  obtaining  the
energy from other sources.  The capacity payment is  approximately  $1.1 million
per annum.

Salton Sea Unit II Project  and Salton  Sea Unit III  Project  contract  to sell
electricity  to Edison under 30-year  modified SO4  Agreements  that provide for
capacity  payments,  capacity bonus payments and energy payments.  The price for
contract  capacity and contract capacity bonus payments is fixed for the life of
the modified SO4 Agreements.  The energy payments for each of the first ten year
periods,  which  periods  expired in April 2000 for Salton Sea II and expired in
February  1999 for Salton  Sea III,  are  levelized  at a time  period  weighted
average  of 10.6 cents per  kilowatt-hour  and 9.8 cents per  kilowatt-hour  for
Salton  Sea Unit II and  Salton  Sea Unit  III,  respectively.  Thereafter,  the
monthly  energy  payments are based on the cost that Edison avoids by purchasing
energy from Salton Sea Unit II or III instead of obtaining the energy from other
sources. For Salton Sea Unit II only, Edison is entitled to receive, at no cost,
5% of all  energy  delivered  in  excess  of 80% of  contract  capacity  through
September 30, 2004.  The annual  capacity and bonus payments for Salton Sea Unit
II and Salton Sea Unit III are  approximately  $3.3  million  and $9.7  million,
respectively.

Salton Sea Unit IV  Project  contracts  to sell  electricity  to Edison  under a
modified SO4  Agreement  which  provides for  contract  capacity  payments on 34
megawatts of capacity at two different  rates based on the  respective  contract
capacities deemed  attributable to the original Salton Sea Unit I PPA option (20
megawatts)  and to the  original  Fish  Lake PPA (14  megawatts).  The  capacity
payment  price  for  the 20  megawatts  portion  adjusts  quarterly  based  upon
specified indices and the capacity payment price for the 14 megawatts portion is
a fixed  levelized rate. The energy payment (for deliveries up to a rate of 39.6
megawatts) is at a fixed rate for 55.6% of the total energy  delivered by Salton
Sea Unit IV and is based on an energy  payment  schedule  for 44.4% of the total
energy  delivered  by Salton Sea Unit IV. The  contract  has a 30-year  term but
Edison is not  required  to purchase  the 20  megawatts  of capacity  and energy
originally  attributable to the Salton Sea Unit I PPA option after September 30,
2017, the original termination date of the Salton Sea Unit I PPA.

The Turbo Project,  which commenced commercial operation in the third quarter of
2000, sells its output through other market transactions.  The Turbo Project may
sell  its  output  to a  zinc  facility,  which  is  owned  by a  subsidiary  of
MidAmerican and is expected to commence operations in mid-2001.

Salton Sea Unit V Project,  which  commenced  operations in the third quarter of
2000,  will sell  approximately  one-third of its net output to a zinc facility,
which is owned by a  subsidiary  of  MidAmerican  and is  expected  to  commence
operations  in mid-2001.  The  remainder of the Salton Sea Unit V output in 2000
was sold through other market transactions.
<PAGE>

On January 17, 2001,  Salton Sea Power and CE Turbo entered into an agreement to
sell  available  power from  Salton  Sea Unit V and CE Turbo to EPME.  Under the
terms of the  agreement,  at the option of Salton  Sea Power and CE Turbo,  EPME
will purchase all  available  power from Salton Sea Unit V and CE Turbo based on
day ahead price quotes received from EPME.

For the years ended December 31, 2000 and 1999, Edison's average Avoided Cost of
Energy was 5.8 cents and 3.1 cents per kilowatt-hour,  respectively. The Company
cannot  predict the likely level of energy prices under the SO4  Agreements  and
the modified SO4 Agreements at the expiration of the fixed payment periods.  See
discussion in Item 3, Legal Proceedings on page 10.

Gas Projects.  The Saranac Project sells  electricity to NYSEG under the Saranac
PPA, which provides for capacity and energy payments.  Capacity payments,  which
in 2000 totaled  2.47 cents per  kilowatt-hour,  are  received  for  electricity
produced  during  "peak  hours" as defined in the  Saranac  PPA and  escalate at
approximately  4.1%  annually for the  remaining  term of the  contract.  Energy
payments,  which  averaged  7.21 cents per  kilowatt-hour  in 2000,  escalate at
approximately  4.4%  annually  for the  remaining  term of the Saranac  PPA. The
Saranac PPA expires in June of 2009.

The Power  Resources  Project  sells  electricity  to Texas  Utilities  Electric
Company under the Power  Resources  PPA,  which provides for capacity and energy
payments.  Capacity payments and energy payments, which in 2000 are $3.4 million
per  month  and 3.3  cents per  kilowatt-hour,  respectively,  escalate  at 3.5%
annually for the remaining term of the Power  Resources PPA. The Power Resources
PPA expires in September 2003.

The Yuma Project  sells  electricity  to SDG&E under the Yuma PPA. The energy is
sold at a price based on the cost that SDG&E  avoids by  purchasing  energy from
the Yuma  Project  instead of  obtaining  the energy  from  other  sources.  The
capacity  is sold to SDG&E at a fixed  price for the life of the Yuma  PPA.  The
power is delivered to SDG&E over  transmission  lines  constructed  and owned by
APS.

Results of Operations for the Years Ended December 2000, 1999 and 1998

Sales of  electricity  and steam  increased to $499.9  million in the year ended
December 31, 2000 from $295.8 million in the year ended December 31, 1999, a 69%
increase.  Approximately  $170  million  of  this  increase  reflects  the  full
consolidation of the Saranac Project.  Approximately $21 million of the increase
is related to higher  energy rates at the Yuma  Project and the Imperial  Valley
Projects. Sales of electricity and steam decreased to $295.8 million in the year
ended December 31, 1999 from $395.6 million in the year ended December 31, 1998,
a 25% decrease.  This  decrease was primarily a result of the  expiration of the
fixed price periods for the Elmore and Del Ranch Projects and for the Salton Sea
Unit III  Project.  These  periods  ended in December  1998,  December  1998 and
February 1999, respectively.


<PAGE>


The following  operating data represents the aggregate  capacity and electricity
production of the Imperial Valley Projects:

                                2000                 1999           1998

Overall capacity factor         87.7%                98.2%          98.2%
Megawatt-hours produced     2,296,800            2,300,700      2,299,400
Capacity (net megawatts)
        (weighted average)      298.3                267.4          267.4

The overall  capacity factor for the Imperial Valley Projects  decreased in 2000
as significant  overhauls and outage work was scheduled due to the  construction
and tie in of the upgraded brine  facilities and the start-up of Salton Sea Unit
V and Turbo.

The following  operating data represents the aggregate  capacity and electricity
production of the Gas Projects:

                                     2000               1999           1998

Overall capacity factor             86.48%               83.5%          81.6%
Megawatt-hours produced          3,722,401           4,258,606      4,072,620
Capacity (net megawatts)
        (weighted average)             490                 557            570

The  overall  capacity  factor  of the  Gas  Projects  reflects  the  effect  of
contractual  curtailments.  The capacity factors adjusted for these  contractual
curtailments are 86.5%, 92.5%, and 92.2% for 2000, 1999, and 1998, respectively.
The decrease in megawatt hours produced and capacity from 1999 to 2000 is due to
the transfer of a formerly  owned  project to a third party.  The changes in the
overall  capacity  factor in 2000,  1999,  and 1998 were due  primarily to major
maintenance downtime and lower electricity production at the Saranac Project due
to 1998 winter snow and ice storms which caused transmission curtailment.

The decrease in equity earnings of subsidiaries in 2000 to $0 from $22.9 million
in 1999  reflects the full  consolidation  of the Saranac  Project in 2000.  The
increase in equity  earnings of subsidiaries in 1999 to $22.9 million from $10.7
million in 1998 was primarily due to lower electricity production at the Saranac
Project  in  1998  due to  severe  winter  snow  and  ice  storms  which  caused
transmission curtailments.

Interest and other income  decreased to $10.9 million in 2000 from $22.0 million
in 1999 was due to  reduced  royalty  income at the  Imperial  Valley  Projects.
Interest and other income  decreased to $22.0 million in the year ended December
31, 1999 from $29.9 million in the year ended December 31, 1998. These decreases
were primarily due to reduced  royalty income at the Imperial  Valley  Projects,
and decreased  interest  income as cash balances were used to fund  construction
projects.

Plant operating  expenses increased to $229.9 million in the year ended December
31, 2000 from $112.8 million in the year ended December 31, 1999.  Approximately
$86 million of this increase,  related to the full  consolidation of the Saranac
Project in 2000. The remaining increase relates to chemicals,  waste removal and
demolition costs at the Imperial Valley Projects. These costs include operating,
maintenance,  resource, fuel and other plant operating expenses. Plant operating
expenses  decreased  marginally to $112.8 million in the year ended December 31,
1999 from $114.1 million in the year ended December 31, 1998.

General and administrative  expenses increased to $5.5 million in the year ended
December 31, 2000 from $4.6 million in the year ended  December 31, 1999.  These
costs  include  administrative  services  provided to CE  Generation,  including
executive,  financial, legal, tax and other corporate functions. The increase in
2000 reflects increased legal and tax/consulting expenses.
<PAGE>

Depreciation  and  amortization  increased  to $80.7  million in 2000 from $57.9
million in 1999.  Approximately  $23.0 million of the increase reflects the full
consolidation  of the Saranac  Project in 2000.  Depreciation  and  amortization
decreased to $57.9 million in 1999 from $96.8 million in 1998.  The decrease was
primarily due to reduced step up  depreciation  after the end of the fixed price
periods for the Del Ranch,  Elmore and Salton Sea Unit III  Projects as a result
of greater  value being  assigned to the fixed price  periods for the  contracts
relating to these projects at the time of acquisition.

Interest expense,  less amounts  capitalized  increased to $84.2 million in 2000
from $72.5 million in 1999. This increase reflects the full consolidation of the
Saranac  Project and a full year of interest  on the CE  Generation  Securities.
Interest expense,  less amounts capitalized,  decreased in 1999 to $72.5 million
from $74.3 million in 1998, a decrease of 2.4%.  Lower interest expense resulted
from the  paydown of the  Salton Sea  Funding  Corporation  and Power  Resources
Project  debt  offset by Salton Sea Funding  Corporation's  Series F issuance in
October 1998 and CE Generation's issuance of Securities in March 1999.

The  provision  for income taxes  decreased to $21.4  million in 2000 from $30.9
million in 1999.  The provision  for income taxes  decreased to $30.9 million in
1999 from $52.2 million in 1998.  The  effective  tax rate was 19.4%,  33.3% and
35.8% in 2000, 1999 and 1998, respectively. The changes from year to year in the
effective rate are due primarily to the generation and utilization of energy tax
credits and depletion deductions.

The  extraordinary  item  of  $17.5  million  in  1999  reflects  the  remaining
unamortized  premium  paid  and  deferred  finance  costs  associated  with  the
repayment of its 9 7/8% Limited Recourse Senior Secured Notes.

Liquidity and Capital Resources

Cash and cash equivalents were $36.2 million at December 31, 2000 as compared to
$29.1  million at December 31,  1999.  In  addition,  restricted  cash was $24.4
million  and  $32.6  million  at  December  31,  2000  and  December  31,  1999,
respectively.  The decrease in  restricted  cash was primarily due to the use of
the  proceeds  from  issuance  of Salton Sea Funding  Corporation  bonds for the
construction  of Salton  Sea Unit V  Project  and the CE Turbo  Project  and the
construction of upgrades to the brine  facilities at some of the Imperial Valley
Projects.

Edison, a wholly-owned  subsidiary of Edison International,  is a public utility
primarily  engaged  in the  business  of  supplying  electric  energy  to retail
customers  in  Central  and  Southern  California,  excluding  Los  Angeles.  CE
Generation  is aware that there have been  public  announcements  that  Edison's
financial condition has deteriorated as a result of reduced liquidity.  Based on
public  announcements,  CE  Generation  understands  that  Edison  has not  made
payments to other  qualifying  facilities  ("QFs") from which  Edison  purchases
power and has not made  scheduled  payments  of debt  service.  Edison's  senior
unsecured  debt  obligations  are  currently  rated Caa2 (on watch for  possible
downgrade) by Moody's and D by S&P.

CE  Generation is aware that there have been public  announcements  that Edison,
other  industry  participants  and  governmental  entities have taken actions in
response to Edison's financial condition. These actions include the following:

o    The  Federal  Energy  Regulatory  Commission  ("FERC")  has issued an order
     eliminating   requirements  that  Edison  and  other  California  utilities
     purchase power from the structured  power market in California known as the
     California  Power  Exchange in order to provide them with an opportunity to
     obtain power from alternative sources at a lower cost.

o    The  State  of  California  has  enacted  legislation  to  provide  for the
     California  Department of Water  Resources to purchase  wholesale power and
     sell it to retail customers,  which will be funded by a surcharge on retail
     rates. The California  legislature is also considering other legislation to
     improve the financial condition of the California electric utilities.
<PAGE>

o    The California Public Utilities  Commission ("CPUC") approved a decision on
     March 27, 2001 to increase retail  electricity rates by approximately  40%.
     In another decision that day, the CPUC and ordered Edison to pay the QFs on
     a go forward basis within 15 days of the invoice  modified the  purportedly
     calculation of Short Run Avoided Cost.

o    The State of California and Edison have  announced a preliminary  agreement
     for the State to purchase Edison's transmission assets for $2.7 billion and
     to  allow  Edison  to  issue  bonds  for  a  substantial   portion  of  its
     undercollection of revenues.

CE  Generation  can give no  assurance  as to the  likely  result  of any of the
actions  described  above or as to  whether  such  actions  will have a positive
effect on the financial  condition of Edison or its willingness to make payments
under the Power Purchase Agreements.

Edison has failed to pay  approximately $76 million due under the Power Purchase
Agreements  for power  delivered in November and December 2000 and January 2001,
although  the Power  Purchase  Agreements  provide  for billing and payment on a
schedule  where  payments  would have normally  been received in early  January,
February and March 2001. Edison has not notified the Imperial Valley Projects as
to when they can expect to receive these payments. This continued non-payment by
Edison could result in an untenable situation for the continued operation of the
Imperial  Valley  Projects  unless  additional  funds are  obtained  in the near
future.

On February  21, 2001,  the Imperial  Valley  Projects  filed a lawsuit  against
Edison in  California's  Imperial  County  Superior  Court seeking a court order
requiring  Edison  to make  the  required  payments  under  the  Power  Purchase
Agreements. The lawsuit also requested, among other things, that the court order
permit the Imperial Valley Projects to suspend deliveries of power to Edison and
to permit the Imperial Valley Projects to sell such power to other purchasers in
California.

On March 22, 2001,  the Superior  Court  granted the Imperial  Valley  Projects'
Motion for Summary  Adjudication  and a Declaratory  Judgment  ordering that: 1)
under the Power Purchase Agreements, the Imperial Valley Projects have the right
to  temporarily  suspend  deliveries  of capacity  and energy to Edison,  2) the
Imperial Valley Projects are entitled to resell the energy and capacity to other
purchasers  and 3) the interim  suspension  of deliveries to Edison shall not in
any respect  result in the  modifications  or  termination of the Power Purchase
Agreements and the Power Purchase  Agreements shall in all respects  continue in
full force and effect  other than the  temporary  suspension  of  deliveries  to
Edison.  The Imperial Valley  Projects  intend to vigorously  pursue their other
remedies in this action in light of Edison's continuing non-payment.

CE Generation is hopeful that the current Edison  situation is temporary and the
proceedings in the legal,  regulatory,  financial and political arenas will lead
to the  improvement of Edison's  financial  condition in the near future and the
payment by Edison of amounts due under the Power Purchase  Agreements.  However,
no assurance can be given that this will be the case.

As a result  of  Edison's  failure  to make the  payments  due  under  the Power
Purchase  Agreements  and the recent  downgrades  of  Edison's  credit  ratings,
Moody's has downgraded the ratings for the Salton Sea Funding  Corporation  (the
"Funding  Corporation")  Securities  to  Caa2  (negative  outlook)  and  S&P has
downgraded  the ratings for the Funding  Corporation  Securities to BBB- and has
placed the  Securities  on "credit  watch  negative".  Accordingly,  the Funding
Corporation does not believe it is currently able to obtain funds in the banking
or capital markets.  However, a failure by Edison to make these payments as well
as  subsequent  monthly  payments,  for a  substantial  period of time after the
payments  are due,  is not  expected  to have a material  adverse  effect on the
ability of CE Generation to make payments on the CE Generation bonds due to cash
flows from the Gas  Projects.  However,  there can be no  assurance  that such a
failure by Edison would not cause a material adverse effect.
<PAGE>

Salton Sea Unit V Project,  which  commenced  operations in the third quarter of
2000,  will sell  approximately  one-third of its net output to a zinc facility,
which is owned by a  subsidiary  of  MidAmerican  and is  expected  to  commence
operations  in mid-2001.  The  remainder of the Salton Sea Unit V output in 2000
was sold through  other  market  transactions.  On January 17, 2001,  Salton Sea
Power,  LLC entered into a transaction  agreement with El Paso Merchant  Energy,
L.P.  ("EPME") in which Salton Sea Unit V Project's  available  power is sold to
EPME on a day ahead basis.

The Turbo Project,  which commenced commercial operation in the third quarter of
2000, sells its output through other market  transactions.  On January 17, 2001,
Salton Sea Power LLC entered into a transaction  agreement,  with EPME, in which
the Turbo Project's  available  power is sold to EPME on a day ahead basis.  The
Turbo  Project  may  sell its  output  to a zinc  facility,  which is owned by a
subsidiary of MidAmerican and is expected to commence operations in mid-2001.

The net  revenues,  equity  distributions  and  royalties  from the  Partnership
Projects are used to pay principal and interest  payments on outstanding  senior
secured bonds issued by the Salton Sea Funding Corporation,  the final series of
which  is  scheduled  to  mature  in  November  2018.  The  Salton  Sea  Funding
Corporation  debt is  guaranteed  by  subsidiaries  of Magma and  secured by the
capital stock of the Salton Sea Funding Corporation.  The proceeds of the Salton
Sea Funding  Corporation debt were loaned by the Salton Sea Funding  Corporation
under  loan  agreements  and  notes  to  subsidiaries  of  Magma  and  used  for
construction of Salton Sea Unit V Project and the CE Turbo Project,  refinancing
of indebtedness and other purposes. Debt service on the Imperial Valley loans is
used to repay  debt  service on the Salton Sea  Funding  Corporation  debt.  The
Imperial  Valley loans and the guarantees of the Salton Sea Funding  Corporation
debt are secured by substantially all of the assets of the guarantors, including
the Imperial Valley projects, and by the equity interests in the guarantors.

The  proceeds of Series F of the Salton Sea Funding  Corporation  debt are being
used in part to construct the zinc facility,  and the direct and indirect owners
of the zinc  facility  are  among  the  guarantors  of the  Salton  Sea  Funding
Corporation debt.  MidAmerican has guaranteed the payment by the zinc guarantors
of a specified  portion of the  scheduled  debt service on the  Imperial  Valley
loans  described in the preceding  paragraph,  including  the current  principal
amount of approximately $140.5 million and associated interest.

Environmental Liabilities

The  Company may be exposed to  environmental  costs in the  ordinary  course of
business.  Expenditures for ongoing  compliance with  environmental  regulations
that relate to current  operations are expensed or  capitalized as  appropriate.
Expenditures that relate to an existing condition caused by past operations, and
which do not contribute to current or future revenue  generation,  are expensed.
Liabilities   are  recorded  when   environmental   assessments   indicate  that
remediation  efforts are  probable  and the costs can be  reasonably  estimated.
Estimates of the liability are based upon currently  available  facts,  existing
technology and presently enacted laws and regulations  taking into consideration
the likely  effects of  inflation  and other social and  economic  factors,  and
include  estimates of associated legal costs.  These amounts also consider prior
experience in remediating sites, other companies'  clean-up  experience and data
released by the Environmental  Protection Agency or other  organizations.  These
estimated  liabilities are subject to revision in future periods based on actual
costs or new circumstances,  and are included in the accompanying balance sheets
at  their  undiscounted   amounts.  As  of  December  31,  2000  and  1999,  the
environmental liabilities recorded on the balance sheet were not material.

Inflation

Inflation has not had a significant impact on CE Generation's cost structure.

Recent Accounting Pronouncements

In June 1998, the Financial  Accounting  Standards Board (FASB) issued SFAS 133,
"Accounting  for  Derivative  Instruments  and  Hedging  Activities",  which was
delayed by SFAS 137 and amended by SFAS 138. SFAS 133/138  requires an entity to
recognize  all of  its  derivatives  as  either  assets  or  liabilities  in its
statement of financial  position and measure those instruments at fair value. CE
Generation  implemented  the new  standards  on  January 1,  2001.  The  initial
adoption  of SFAS  133/138  did not have a  material  impact on CE  Generation's
financial position, results of operations or any impact on its cash flows.
<PAGE>

The FASB's  Derivatives  Implementation  Group continues to identify and provide
guidance on various  implementation  issues  related to SFAS 133/138 that are in
varying  stages of review and clearance by the Derivative  Implementation  Group
and FASB. CE Generation has not  determined if the ultimate  resolution of those
issues would have a material impact on its financial statements.

Accounting Policy Change

The  Company  is  considering  adopting  a new  policy of  accounting  for major
maintenance,   overhaul  and  well  workover  costs.  These  costs,  which  have
historically  been  accounted for using deferral and accrued  methods,  would be
expensed  as  incurred.  As of January 1, 2001,  the  cumulative  effect of this
change would be a decrease in net income of approximately $15.1 million,  net of
tax.

Forward-Looking Statements

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 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.

Item 7A.  Qualitative and Quantitative Disclosures About Market Risk

Interest Rate Risk

At  December  31,  2000,  the Company had  fixed-rate  long-term  debt of $933.5
million with a fair value of $807.7  million.  These  instruments are fixed-rate
and  therefore  do not expose us to the risk of earnings  loss due to changes in
market  interest  rates.  However,  the fair  value of these  instruments  would
decrease by  approximately  $30.2 million if interest  rates were to increase by
10% from their levels at December 31, 2000. In general, 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.

At  December  31,  2000,  the Company had  floating-rate  obligations  of $230.2
million which exposes the Company to the risk of increased  interest  expense in
the event of increases in  short-term  interest  rates.  The Company has entered
into interest  rate swap  agreements  for the purpose of  completely  offsetting
these interest rate fluctuations. The interest rate differential is reflected as
an adjustment to interest expense over the life of the instruments.  At December
31, 2000,  these interest rate swaps had an aggregate  notional amount of $230.2
million,  which the Company  could  terminate at a cost of  approximately  $12.3
million.  A decrease of 10% in the  December  31,  2000 level of interest  rates
would increase the cost of terminating the swaps by approximately  $4.2 million.
These termination costs would impact the Company's  earnings and cash flows only
if all or a  portion  of the swap  instruments  were  terminated  prior to their
expiration.


<PAGE>


Item 8.  Financial Statements and Supplementary Data

                          INDEX TO FINANCIAL STATEMENTS

                                                                           PAGE

Consolidated Financial Statements of CE Generation, LLC:
Independent Auditors' Report                                                  23
Consolidated Balance Sheets as of December 31, 2000 and 1999                  24
Consolidated Statements of Operations for the Three Years Ended
 December 31, 2000                                                            25
Consolidated Statement of Members' Equity for the Three Years
 Ended December 31, 2000                                                      26
Consolidated Statements of Cash Flows for the Three Years Ended
 December 31, 2000                                                            27
Notes to Consolidated Financial Statements                                    28






<PAGE>




                          INDEPENDENT AUDITORS' REPORT

Board of Directors
CE Generation, LLC

         We have  audited the  accompanying  consolidated  balance  sheets of CE
Generation,  LLC as of December 31, 2000 and 1999, and the related  consolidated
statements of operations,  members' equity, and cash flows for each of the three
years in the period ended December 31, 2000. These financial  statements are the
responsibility  of CE Generation,  LLC'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, such consolidated  financial statements present fairly,
in all material  respects,  the financial  position of CE Generation,  LLC as of
December 31, 2000 and 1999 and the results of its  operations and its cash flows
for each of the three years in the period ended  December 31, 2000 in conformity
with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 18, 2001

(March 27, 2001 as to Note 9A)



<PAGE>


                       CE GENERATION, LLC AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2000 AND 1999
                             (Amounts in Thousands)
<TABLE>
<CAPTION>

                                                                 2000                      1999

 ASSETS

<S>                                                    <C>                        <C>
 Cash and cash equivalents                             $         36,152           $        29,120
 Restricted cash                                                 14,794                     6,776
 Accounts receivable                                             89,883                    40,688
 Prepaid expenses                                                19,981                    10,461
 Inventory                                                       27,424                    19,734
 Due from affiliates                                                ---                     3,794
 Deferred income taxes                                            2,878                     9,256
 Total current assets                                           191,112                   119,829

 Restricted cash                                                  9,618                    25,836
 Properties, plants, contracts and equipment, net             1,355,345                 1,017,342
 Equity investments                                                 ---                   118,637
 Excess of cost over fair value of net assets acquired,
   net                                                          276,294                   285,888
 Note receivable from related party (Note 6)                    140,528                   140,528
 Deferred financing charges and other assets                     14,426                    17,359
 Total assets                                          $      1,987,323           $     1,725,419

 LIABILITIES AND EQUITY
 Liabilities:
 Accounts payable and other accrued liabilities        $         68,700           $        41,322
 Due to affiliates                                                2,578                       ---
 Current portion of long term debt                               67,473                    51,520
 Total current liabilities                                      138,751                    92,842

 Project loan                                                   199,006                    60,173
 Salton Sea notes and bonds                                     520,250                   543,948
 Senior secured bonds                                           377,000                   389,600
 Deferred income taxes                                          244,937                   246,576
 Total liabilities                                            1,479,944                 1,333,139
 Minority interest                                               68,464                       ---

 Commitments and contingencies (Notes 4 and 9)
 Members' equity                                                438,915                   392,280

 Total liabilities and equity                          $      1,987,323           $     1,725,419
</TABLE>

   The accompanying notes are an integral part of these financial statements.


<PAGE>


                       CE GENERATION, LLC AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000
                             (Amounts in Thousands)
<TABLE>
<CAPTION>
                                                                  2000               1999             1998

 Revenue:

<S>                                                         <C>              <C>               <C>
 Sales of electricity and steam                             $     499,926    $     295,787     $     395,560

 Equity earnings in subsidiaries                                      ---           22,861            10,732

 Interest and other income                                         10,870           22,035            29,883

 Total revenues                                                   510,796          340,683           436,175



 Cost and Expenses:

 Plant operations                                                 229,875          112,801           114,092

 General and administrative                                         5,461            4,594             4,963

 Depreciation and amortization                                     80,710           57,869            96,818

 Interest expense                                                  88,491           77,515            74,653

 Less interest capitalized                                         (4,291)          (4,978)             (347)

 Total expenses                                                   400,246          247,801           290,179



 Income before provision for income taxes                         110,550           92,882           145,996

 Provision for income taxes                                        21,402           30,912            52,218

 Income before minority interest and extraordinary item            89,148           61,970            93,778

 Minority interest                                                 15,613              ---               ---

 Income before extraordinary item                                  73,535           61,970            93,778

 Extraordinary item, net of tax (Note 8)                              ---          (17,478)              ---

 Net income                                                 $      73,535    $      44,492     $      93,778
</TABLE>


   The accompanying notes are an integral part of these financial statements.


<PAGE>


                       CE GENERATION, LLC AND SUBSIDIARIES

                    CONSOLIDATED STATEMENT OF MEMBERS' EQUITY

                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000
                             (Amounts in Thousands)

 BALANCE, January 1, 1998                        $       464,140

 Distribution, net of advances                           (20,971)

 Net income                                               93,778

 BALANCE, December 31, 1998                              536,947

 Distribution, net of advances                          (122,080)

 Distribution of non-cash assets to MEHC                 (67,079)

 Net income                                               44,492

 BALANCE, December 31, 1999                              392,280

 Distribution, net of advances                           (26,900)

 Net income                                               73,535

 BALANCE, December 31, 2000                      $       438,915



   The accompanying notes are an integral part of these financial statements.


<PAGE>


                       CE GENERATION, LLC AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000
                             (Amounts in Thousands)
<TABLE>
<CAPTION>

                                                                      2000            1999             1998
 Cash flows from operating activities:

<S>                                                         <C>              <C>               <C>
 Net income                                                 $      73,535    $      44,492     $      93,778
 Adjustments to reconcile to cash flows from
     operating activities:
 Extraordinary item, net of tax                                       ---           17,478               ---
 Depreciation and amortization                                     80,710           57,869            96,818
 Provision for deferred income taxes                                3,348             (832)           (6,144)
 Distribution from equity investments in excess of
     equity earnings                                                  ---            6,399             6,171
 Distributions to minority interest in excess of
     related income                                                (8,043)             ---               ---
 Changes in other items, net of Saranac conversion:
    Accounts receivable                                           (34,096)          26,941           (14,557)
    Inventory                                                      (2,371)          (4,292)           (3,191)
    Due from affiliates                                             4,138           (3,794)              ---
    Accounts payable and other accrued liabilities                 19,568            1,504            (9,125)
    Other assets                                                   (6,174)           8,632             7,524

 Net cash flows from operating activities                         130,615          154,397           171,274

 Cash flows from investing activities:

 Capital expenditures                                             (59,280)        (183,508)          (46,222)
 Consolidation of former equity investment's cash                   2,559              ---               ---
 Decrease (increase) in restricted cash                            23,696           75,840          (101,366)

 Net cash flows from investing activities                         (33,025)        (107,668)         (147,588)

 Cash flows from financing activities:

 Repayment of Salton Sea notes and bonds                          (25,072)         (57,836)         (106,938)
 Proceeds from Salton Sea notes and bonds                             ---              ---           285,000
 Repayment of Senior Secured bonds                                (10,400)             ---               ---
 Proceeds from Senior Secured bonds                                   ---          400,000               ---
 Note receivable from related party                                   ---              ---          (140,528)
 Repayment of note payable to related party                       (13,000)        (269,300)             (131)
 Proceeds from related party note                                  13,000              ---               ---
 Repayment of project loans                                       (27,137)         (14,268)          (12,805)
 Deferred charge relating to debt financing                           ---              ---            (4,943)
 Distributions, net of advances                                   (26,900)        (122,080)          (20,971)
 Decrease (increase) in restricted cash                            (1,049)          20,101           (20,280)

 Net cash flows from financing activities                         (90,558)         (43,383)          (21,596)
 Net increase in cash and cash equivalents                          7,032            3,346             2,090
 Cash and cash equivalents at beginning of year                    29,120           25,774            23,684
 Cash and cash equivalents at end of year                   $      36,152    $      29,120     $      25,774
 Supplemental disclosure:
 Interest paid                                              $      83,106    $      78,944     $      73,283
 Income taxes paid                                          $      16,411    $      31,744     $      58,362
</TABLE>

See  Note  3  regarding   conversion  of  Saranac  from  equity   investment  to
consolidated subsidiary.

   The accompanying notes are an integral part of these financial statements.


<PAGE>



                       CE GENERATION, LLC AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000

1. Business

MidAmerican  Energy  Holdings  Company  ("MidAmerican")  completed  a  strategic
restructuring  in  conjunction  with  its  acquisition  of  MHC  Inc.  (formerly
MidAmerican  Energy Holdings  Company) in which MEHC's common stock interests in
Magma Power Company,  Falcon  Seaboard  Resources,  Inc. and  California  Energy
Development  Corporation,  and their subsidiaries  (which own the geothermal and
natural gas-fired combined cycle cogeneration  facilities described below), were
contributed by MEHC to the newly created CE Generation,  LLC ("CE  Generation").
This restructuring was completed in February 1999.

On March 3, 1999,  MEHC closed the sale of 50% of its ownership  interests in CE
Generation to El Paso CE Generation  Holding  Company,  which was merged into El
Paso Merchant Energy Holding Company on December 31, 2000 ("El Paso Power").  El
Paso Power is an affiliate of El Paso Corporation.

Basis of Presentation--These consolidated financial statements of CE Generation,
LLC reflect the  consolidated  financial  statements  of Magma Power Company and
subsidiaries  (excluding  wholly-owned  subsidiaries  retained by MEHC),  Falcon
Seaboard Resources, Inc. and subsidiaries and Yuma Cogeneration Associates, each
a wholly-owned  subsidiary.  The consolidated  financial  statements present the
financial position,  results of operations and cash flows of CE Generation as if
CE  Generation  was a  separate  legal  entity  for all  periods  presented.  CE
Generation has accounted for MEHC's contribution of assets and liabilities to CE
Generation  in  accordance  with  Interpretation  No. 39 of APB  Opinion No. 16,
Transfers and Exchanges  Between  Companies Under Common  Control.  Accordingly,
MEHC's  basis  in these  assets  and  liabilities,  has  been  carried  over and
reflected in CE Generation's  financial  statements.  All material  intercompany
transactions and balances have been eliminated in consolidation.

General--CE  Generation  is  engaged  in the  independent  power  business.  The
following table sets out information concerning CE Generation's projects:
<TABLE>
<CAPTION>

PROJECT                          FUEL              COMMERCIAL          CAPACITY                 LOCATION
                                                    OPERATION

<S>                           <C>                      <C>                 <C>                 <C>
Vulcan                        Geothermal               1986                34 MW               California
Del Ranch                     Geothermal               1989                38 MW               California
Elmore                        Geothermal               1989                38 MW               California
Leathers                      Geothermal               1990                38 MW               California
CE Turbo                      Geothermal               2000                10 MW               California
Salton Sea I                  Geothermal               1987                10 MW               California
Salton Sea II                 Geothermal               1990                20 MW               California
Salton Sea III                Geothermal               1989                49.8 MW             California
Salton Sea IV                 Geothermal               1996                39.6 MW             California
Salton Sea V                  Geothermal               2000                49 MW               California
Power Resources               Gas                      1988                200 MW              Texas
Yuma                          Gas                      1994                50 MW               Arizona
Saranac                       Gas                      1994                240 MW              New York
</TABLE>
<PAGE>

Vulcan,  Del  Ranch,  Elmore,  Leathers  and CE  Turbo  are  referred  to as the
Partnership Projects. Salton Sea I, II, III, IV and V are referred as the Salton
Sea  Projects.  The  Partnership  Projects  and  the  Salton  Sea  Projects  are
collectively referred to as the Imperial Valley Projects. Power Resources, Yuma,
and Saranac are referred to as the Gas Projects.

2. Summary of Significant Accounting Policies

Cash Equivalents--CE  Generation considers all investment  instruments purchased
with an  original  maturity  of  three  months  or less to be cash  equivalents.
Restricted cash is not considered a cash equivalent.

Restricted  Cash--The restricted cash balance is composed of restricted accounts
for debt service, capital expenditures and major maintenance  expenditures.  The
debt  service  funds are  legally  restricted  as to their use and  require  the
maintenance of specific minimum balances equal to the next debt service payment.

Well Costs--The cost of drilling and equipping production wells and other direct
costs,  are  capitalized  and  amortized  on a  straight-line  basis  over their
estimated useful lives when production commences.  The estimated useful lives of
production wells are twenty years.

Deferred  Well and Rework  Costs--Geothermal  well rework costs are deferred and
amortized over the estimated period between reworks ranging from 18 months to 24
months. These deferred costs, net of accumulated amortization,  are $6.7 million
and $5.9 million at December 31, 2000 and 1999,  respectively,  and are included
in other assets.

Inventories--Inventories  consist of spare parts and  supplies and are valued at
the lower of cost or  market.  Cost for large  replacement  parts is  determined
using the specific  identification  method. For the remaining supplies,  cost is
determined using the weighted average cost method.

Properties,  Plants,  Contracts,  Equipment and Depreciation--The  cost of major
additions and betterments are capitalized, while replacements,  maintenance, and
repairs  that do not  improve or extend the lives of the  respective  assets are
expensed.

Depreciation  of the  operating  power  plant  costs,  net of  salvage  value if
applicable,  is computed on the straight line method over the  estimated  useful
life of 30 years. Depreciation of furniture,  fixtures and equipment is computed
on the  straight  line method  over the  estimated  useful  lives of the related
assets, which range from 3 to 10 years.

The  acquisitions of Magma Power Company,  Falcon Seaboard  Resources,  Inc. and
Edison  Mission  Energy's  partnership  interests  by CE  Generation  have  been
accounted  for  as  purchase  business  combinations.  All  identifiable  assets
acquired  and  liabilities  assumed  were  assigned  a  portion  of the  cost of
acquiring  the  respective  companies  equal to their  values at the date of the
acquisition and includes power sales agreements  which are amortized  separately
on a straight-line basis over (1) for the Edison Partnership interests and Magma
acquisitions,  the remaining portion of the scheduled price periods of the power
sales agreements which ranged from 1 to 5 years, (2) for the Edison  Partnership
interests and Magma acquisitions,  the 20 year avoided cost periods of the power
sales agreements and (3) over the remaining contract periods which ranged from 7
to 30 years.

Excess of Cost Over Fair  Value--Total  acquisition  costs in excess of the fair
values  assigned to the net assets  acquired are amortized over a 40 year period
for  the  Magma  acquisition  and a 25  year  period  for  the  Falcon  Seaboard
acquisition,  both using the straight line method.  Accumulated amortization was
$52.2 million and $42.6 million at December 31, 2000 and 1999, respectively.

Maintenance  and Repair  Reserves--Major  maintenance  and repair  reserves  are
recorded monthly based on CE Generation's  long-term scheduled major maintenance
plans  for  the  Gas  Projects  and  included  in  accrued  liabilities.   Other
maintenance and repairs are charged to expense as incurred.
<PAGE>

Capitalization   of  Interest  and  Deferred   Financing   Costs--Prior  to  the
commencement  of operations,  interest is capitalized on the costs of the plants
and geothermal resource development to the extent incurred. Capitalized interest
and other deferred charges are amortized over the lives of the related assets.

Deferred  financing  costs are amortized over the term of the related  financing
using the effective interest method.

Revenue  Recognition--Revenues  are recorded  based upon  electricity  and steam
delivered  to the end of the month.  See Note 4 for  contractual  terms of power
sales agreements.  Royalties earned from providing geothermal resources to power
plants operated by other geothermal power producers are recorded when delivered.

Income Taxes--CE  Generation and its subsidiaries had historically been included
in the  consolidated  federal  income  tax  returns  of  MEHC.  CE  Generation's
provision for income taxes was computed on a separate  return  basis.  Beginning
March 3, 1999, CE Generation became a separate consolidated federal taxpayer. CE
Generation   recognizes  deferred  tax  assets  and  liabilities  based  on  the
difference  between  the  financial  statement  and  tax  bases  of  assets  and
liabilities  using  estimated  tax  rates in  effect  for the year in which  the
differences are expected to reverse.

Financial  Instruments--CE  Generation utilizes swap agreements to manage market
risks and reduce its exposure  resulting from fluctuation in interest rates. For
interest  rate swap  agreements,  the net cash  amounts  paid or received on the
agreements are accrued and recognized as an adjustment to interest  expense.  CE
Generation's  practice is not to hold or issue financial instruments for trading
purposes. These instruments are either exchange traded or with counterparties of
high credit quality; therefore, the risk of nonperformance by the counterparties
is considered to be negligible.

Fair values of financial instruments are estimated based on quoted market prices
for debt  issues  actively  traded or on market  prices of  similar  instruments
and/or valuation techniques using market assumptions.

Impairment of Long-Lived  Assets--CE  Generation  reviews  long-lived assets and
certain  identifiable  intangibles for impairment  whenever events or changes in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable.  An impairment  loss would be recognized,  based on discounted cash
flows or various models, whenever evidence exists that the carrying value is not
recoverable.

Use of  Estimates--The  preparation of financial  statements in conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

Accounting  Pronouncements--  In June 1998, the Financial  Accounting  Standards
Board (FASB) issued SFAS 133, "Accounting for Derivative Instruments and Hedging
Activities", which was delayed by SFAS 137 and amended by SFAS 136. SFAS 133/138
requires  an entity to  recognize  all of its  derivatives  as either  assets or
liabilities in its statement of financial position and measure those instruments
at fair value.  CE Generation  implemented the new standards on January 1, 2001.
The  initial  adoption  of SFAS  133/138  did not have a  material  impact in CE
Generation's financial position, results of operations or any impact on its cash
flows.

The FASB's  Derivatives  Implementation  Group continues to identify and provide
guidance on various  implementation  issues  related to SFAS 133/138 that are in
varying  stages of review and clearance by the Derivative  Implementation  Group
and FASB. CE Generation has not  determined if the ultimate  resolution of those
issues would have a material impact on its financial statements.
<PAGE>

The  Company  is  considering  adopting  a new  policy of  accounting  for major
maintenance,   overhaul  and  well  workover  costs.  These  costs,  which  have
historically  been  accounted for using deferral and accrual  methods,  would be
expensed  as  incurred.  As of January 1, 2001,  The  cumulative  effect of this
change would be a decrease in net income of approximately $15.1 million,  net of
tax.

3.       Equity Investments

CE Generation  indirectly holds  noncontrolling  general and limited partnership
interests in Saranac Power Partners,  L.P.  (Saranac) which was formed to build,
own and operate natural gas fired combined cycle cogeneration facilities.  Under
the Saranac partnership  agreement,  the economic interests of the partners flip
after certain limited partners  achieve fixed rates of return.  In January 2000,
TPC Saranac, a limited partner, achieved an after tax return of 8.35%. Following
this achievement, CE Generation's economic interest in the partnership increased
to approximately  64%. Effective January 2000, the Saranac Project investment is
no longer  reported as an equity  investment but is fully  consolidated  into CE
Generation financial results. The following is summarized financial  information
for Saranac as of December 31, 1999 (in thousands).

         Cash and investments                           $2,559
         Restricted cash                                 7,223
         Accounts receivable                            15,099
         Property, plant and equipment, net            349,105
         Other assets                                   13,683

         Current liabilities                             9,022
         Project loans                                 181,108
         Due to affiliates                               2,223
         Total equity                                  195,316

4.       Properties, Plants, Contracts and Equipment

         Properties,  plants,  contracts and equipment comprise the following at
December 31 (in thousands):
<TABLE>
<CAPTION>

                                                                      2000                     1999

 Operating facilities:

<S>                                                         <C>                     <C>
 Power plants                                               $       1,322,691       $         716,809
 Wells and resource development                                       162,481                 151,996
 Power sales agreements                                               287,653                 287,653
 Licenses and equipment                                                49,374                  47,905
                                                            -----------------       -----------------

 Total operating facilities                                         1,822,199               1,204,363
 Less accumulated depreciation and amortization                      (466,854)               (326,042)
                                                            -----------------       -----------------
 Net operating facilities                                           1,355,345                 878,321

 Construction in progress:
 Salton Sea Unit V                                                        ---                  89,072
 Turbo and Region 2 Brine Facilities Construction                         ---                  42,612
 Other development                                                        ---                   7,337
                                                            -----------------       -----------------
 Total                                                      $       1,355,345       $       1,017,342

</TABLE>

Significant  Customers and Contracts--CE  Generation's sales of electricity from
the  Imperial  Valley  Projects,   comprised  approximately  41%,  66%  and  74%
respectively,  of 2000, 1999 and 1998  electricity and steam revenues.  Of these
sales  approximately  86%, 100% and 100% are to Southern  California  Edison, in
2000,  1999 and  1998,  respectively.  Accounts  receivable,  approximately  $45
million of which are from Edison,  are  primarily  uncollateralized  receivables
from long-term power purchase  contracts  described below. If the customers were
unable to perform,  CE Generation  could incur an accounting loss equal to $89.9
million and $40.7 million at December 31, 2000 and 1999, respectively.
<PAGE>

Imperial Valley Projects--The Partnership Projects (except CE Turbo) contract to
sell  all  electricity  generated  by the  respective  plants  pursuant  to four
long-term  standard  offer no. 4, or SO4,  agreements  between the  Projects and
Edison that are based on this standard form.  These SO4  Agreements  provide for
capacity  payments,  capacity bonus payments and energy  payments.  Edison makes
fixed annual  capacity and capacity bonus payments to the Projects to the extent
that capacity  factors  exceed  certain  benchmarks.  The price for capacity and
capacity bonus payments is fixed for the life of the SO4  Agreements.  Energy is
sold at increasing  fixed rates for the first ten years after firm operation and
thereafter at a rate which is based on the cost that Southern  California Edison
avoids by  purchasing  energy from the project  instead of obtaining  the energy
from other sources.

The scheduled  energy price periods of the  Partnership  Projects SO4 Agreements
extended until February 1996, December 1998, December 1998 and December 1999 for
each of the Vulcan, Del Ranch, Elmore and Leathers Partnerships, respectively.

Salton Sea I  contracts  to sell  electricity  to Edison  pursuant  to a 30-year
negotiated  power purchase  agreement,  as amended (the Salton Sea I PPA), which
provides for  capacity and energy  payments.  The energy  payment is  calculated
using a Base Price which is subject to quarterly  adjustments  based on a basket
of indices. The time period weighted average energy payment for Salton Sea I was
5.7 cents per kWh during 2000. As the Salton Sea I PPA is not an SO4  Agreement,
the  energy  payments  do not revert to  Edison's  Avoided  Cost of Energy.  The
capacity payment is approximately $1.1 million per annum.

Salton Sea II and Salton Sea III contract to sell electricity to Edison pursuant
to 30-year modified SO4 Agreements that provide for capacity payments,  capacity
bonus payments and energy payments. The price for contract capacity and contract
capacity  bonus  payments is fixed for the life of the modified SO4  Agreements.
The  energy  payments  for each of the first  ten year  periods,  which  periods
expired in April 2000 for Salton Sea II and expired in February  1999 for Salton
Sea III,  respectively,  are levelized at a time period weighted average of 10.6
cents  per kWh and 9.8  cents  per kWh for  Salton  Sea II and  Salton  Sea III,
respectively.  Thereafter,  the monthly energy payments are at Edison's  Avoided
Cost of Energy.  For Salton Sea II only,  Edison is entitled  to receive,  at no
cost, 5% of all energy  delivered in excess of 80% of contract  capacity through
September 30, 2004. The annual capacity and bonus payments for Salton Sea II and
Salton Sea III are approximately $3.3 million and $9.7 million, respectively.

Salton Sea IV contracts to sell electricity to Edison pursuant to a modified SO4
Agreement which provides for contract  capacity payments on 34 MW of capacity at
two  different  rates  based  on  the  respective   contract  capacities  deemed
attributable  to the original  Salton Sea PPA option (20 MW) and to the original
Fish Lake PPA (14 MW). The capacity  payment price for the 20 MW portion adjusts
quarterly based upon specified indices and the capacity payment price for the 14
MW portion is a fixed levelized rate. The energy payment (for deliveries up to a
rate of 39.6 MW) is at a fixed rate for 55.6% of the total  energy  delivered by
Salton Sea IV and is based on an energy payment  schedule for 44.4% of the total
energy delivered by Salton Sea IV. The contract has a 30-year term but Edison is
not  required  to  purchase  the  20  MW  of  capacity  and  energy   originally
attributable  to the Salton Sea I PPA  option  after  September  30,  2017,  the
original termination date of the Salton Sea I PPA.

For the years ended December 31, 2000 and 1999, Edison's average Avoided Cost of
Energy was 5.8 cents and 3.1 cents per kWh,  respectively.  CE Generation cannot
predict the level of Avoided Cost of Energy prices under the SO4  Agreements and
the modified SO4 Agreements.

The Imperial Valley  Projects other than Salton Sea Unit I receive  transmission
service from the Imperial Irrigation District to deliver electricity to Southern
California  Edison near Mirage,  California.  These projects pay a rate based on

<PAGE>

the Imperial Irrigation District's cost of service which was $1.58 per month per
kilowatt  of  service  provided  for  2000  and is  recalculated  annually.  The
transmission  service  and  interconnection  agreements  expire  in 2015 for the
Partnership Projects,  2019 for Salton Sea Unit III, 2020 for Salton Sea Unit II
and 2026 for  Salton Sea Unit IV.  Salton  Sea Unit V and the CE Turbo  projects
have  entered  into  30-year  agreements  with  similar  terms with the Imperial
Irrigation  District.  Salton Sea Unit I delivers energy to Southern  California
Edison at the project site and has no  transmission  service  agreement with the
Imperial Irrigation District.

Gas Projects--The Saranac Project sells electricity to New York State Electric &
Gas pursuant to a 15 year negotiated power purchase agreement (the Saranac PPA),
which provides for capacity and energy  payments.  Capacity  payments,  which in
2000 total 2.47 cents per kWh,  are  received for  electricity  produced  during
"peak  hours" as defined in the Saranac PPA and escalate at  approximately  4.1%
annually for the remaining term of the contract. Energy payments, which averaged
7.21 cents per kWh in 2000,  escalate at  approximately  4.4%  annually  for the
remaining  term of the  Saranac  PPA.  The  Saranac PPA expires in June of 2009.
Saranac sells steam to  Georgia-Pacific  and Tenneco  Packaging  under long-term
steam sales agreements. CE Generation believes that these agreements will enable
Saranac to sell the minimum annual  quantity of steam  necessary for the Saranac
Project to maintain its qualifying  facility  status under PURPA for the term of
the Saranac PPA.

The Power  Resources  Project  sells  electricity  to Texas  Utilities  Electric
Company (TUEC)  pursuant to a 15 year negotiated  power purchase  agreement (the
Power Resources PPA), which provides for capacity and energy payments.  Capacity
payments and energy  payments,  which in 2000 are $3.4 million per month and 3.3
cents per kWh, respectively, escalate at 3.5% annually for the remaining term of
the Power  Resources  PPA. The Power  Resources  PPA expires in September  2003.
Power Resources sells steam to Fina Oil and Chemical under a 15-year  agreement.
Power  Resources has agreed to supply Fina with up to 150,000 pounds per hour of
steam. As long as Power Resources meets its supply obligations, Fina is required
to purchase at least the minimum  amount of steam per year required to allow the
Power Resources Project to maintain its qualifying facility status under PURPA.

Saranac  and  Power  Resources  each  delivers  energy to its  respective  power
purchaser  at or near the site of its project and does not utilize  transmission
service  provided by any other party.  The  facilities to  interconnect  each of
these projects to the system of the power purchaser were  constructed  under the
terms of its power purchase agreement.

Yuma sells  electricity  to San Diego Gas & Electric  Company  (SDG&E)  under an
existing 30-year power purchase contract.  The energy is sold at SDG&E's Avoided
Cost of Energy and the  capacity  is sold to SDG&E at a fixed price for the life
of the power purchase contract.  The power is wheeled to SDG&E over transmission
lines  constructed and owned by Arizona Public Service Company (APS). Yuma sells
steam to Queen  Carpet,  Inc.  pursuant to an  agreement  that expires on May 1,
2024.  Queen Carpet is required to take a minimum of 126,900 MMBtus of steam per
year,  which is sufficient to permit the Yuma Project to maintain its qualifying
facility status under the PURPA.

Saranac  purchases  natural  gas from Coral  Energy  under a 15-year  gas supply
agreement  that expires in 2009.  The price was $3.00 per MMBtu at December 2000
and escalates at the rate of 4% per year. Coral delivers the gas to the pipeline
owned by Saranac's  subsidiary,  North Country Gas Pipeline which transports the
gas to the Saranac project.

Fina Oil and  Chemical  supplies  3,600 MMBtu of refinery  fuel gas to the Power
Resources project under an agreement that expires in 2003. The delivery point is
at the  Power  Resources  project.  The  price  was  $2.90 per MMBtu in 2000 and
escalates  at 2%  per  year.  Louis  Dreyfus  Natural  Gas  Corporation  ("Louis
Dreyfus") also supplies natural gas for the Power Resources  project under a gas
supply  agreement that expires in 2003. The price for the first 31,200 MMBtu per
day under the agreement was $2.32 per MMBtu in 2000 and escalates  incrementally
to $2.57 per MMBtu in 2003.  The price for the second  3,000 MMBtu per day under
the  agreement  is set at the  West  Texas  spot  price  plus  $.05  per  MMBtu.
Additional  gas  may be  purchased  under  the  agreement  at  prices  that  are
negotiated  with  Louis  Dreyfus.  Louis  Dreyfus  delivers  the  gas to  Westar
Transmission  System which transports the gas for Power Resources to the project
at a rate of $.06 to $.12 per MMBtu  depending  upon the point of entry into the
Westar Transmission system.
<PAGE>

Yuma purchases  natural gas from Southwest Gas Corporation.  Yuma is entitled to
direct  Southwest  Gas to purchase gas from any of several gas supply basins and
transport it to the project. Yuma pays a price based on the applicable index for
the relevant basin.  The agreement may be terminated by either party  commencing
in 2002,  in  which  case  Southwest  Gas  would  be  required  to  provide  gas
transportation service under its transportation tariff to Yuma.

Royalties--Royalty expense for the years ended December 31, 2000, 1999 and 1998,
which  is  included  in  plant  operations  in the  consolidated  statements  of
operations, comprise the following (in thousands):

<TABLE>
<CAPTION>
                                                                     2000               1999
 1998

<S>                                                         <C>              <C>               <C>
Vulcan                                                      $         709    $         423     $         363
Leathers                                                            1,367            3,361             2,811
Elmore                                                              1,026              520             2,192
Del Ranch                                                           1,323              856             2,870
Turbo                                                                 187              ---               ---
Salton Sea I & II                                                     836              827               810
Salton Sea III                                                      1,523            1,673             1,637
Salton Sea IV                                                       2,618            2,569             2,645
Salton Sea V                                                        1,014              ---               ---
                                                            -------------    -------------     -------------
Total                                                       $      10,603    $      10,229     $      13,328
                                                            -------------    -------------     -------------
</TABLE>

The Imperial Valley projects obtain their geothermal  resource rights from Magma
Power  Company  and Magma  Land  Company  I,  wholly-owned  subsidiaries  of the
Company.

The  Partnership  Project pays royalties based on both energy revenues and total
electricity  revenues.  Del Ranch and Leathers pay royalties of approximately 5%
of energy revenues and 1% of total electricity revenue. Elmore pays royalties of
approximately  5% of energy  revenues.  Vulcan pays  royalties of  approximately
4.167% of energy revenues.

The Salton Sea Project's weighted average royalty expense in 2000, 1999 and 1998
was approximately 6.1%, 6.2% and 4.8%,  respectively.  The royalties are paid to
numerous  recipients  based  on  varying  percentages  of  electrical  or  steam
production multiplied by published indices.

5.       Project Loans

Each of CE Generation's direct or indirect  subsidiaries is organized as a legal
entity  separate and apart from CE  Generation  and its other  subsidiaries  and
MEHC.  Pursuant to separate  project  financing  agreements,  the assets of each
subsidiary  (excluding  Yuma) are pledged or  encumbered to support or otherwise
provide the security for their own project or subsidiary  debt. It should not be
assumed that any asset of any subsidiary of CE Generation,  will be available to
satisfy  the  obligations  of CE  Generation  or any of its other  subsidiaries;
provided,  however,  that  unrestricted cash or other assets which are available
for  distribution  may,  subject to  applicable  law and the terms of  financing
arrangements  for such  parties,  be  advanced,  loaned,  paid as  dividends  or
otherwise  distributed or  contributed  to CE Generation or affiliates  thereof.
"Subsidiary"  means all of CE Generation's  direct or indirect  subsidiaries (1)
owning direct or indirect  interests in the Imperial Valley projects  (including
the Salton Sea  projects  and the  Partnership  projects  other than Magma Power
Company and Salton Sea Power  Company),  or (2) owning  direct  interests in the
subsidiaries that own interests in the foregoing  projects,  the Saranac project
and the Power Resources project.

Power  Resources  has project  financing  debt with a  consortium  of banks with
interest and principal due quarterly over a 15-year period,  beginning March 31,
1989.  The  original  principal  carried a variable  interest  rate based on the
London  Interbank  Offer Rate ("LIBOR") with a .85% interest  margin through the
5th  anniversary of the loan, a 1.00% interest  margin from the 5th  anniversary
through the 12th  anniversary of the loan and a 1.25%  interest  margin from the
12th anniversary  through the end of the loan. The loan is  collateralized by an
assignment of all revenues received by Power Resources,  a lien on substantially
all of its real and personal property and a pledge of its capital stock.
<PAGE>

Effective  June 5, 1989,  Power  Resources  entered  into an interest  rate swap
agreement with the lender as a means of hedging floating  interest rate exposure
related to its 15-year term loan.  The swap  agreement was for initial  notional
amounts of $55.0 million and $110.0 million,  declining in  correspondence  with
the principal  balances,  and effectively fixed the interest rates at 9.385% and
9.625%,  respectively,  excluding the interest  margin.  The swap agreements are
settled  in cash based on the  difference  between a fixed and  floating  (index
based) price for the  underlying  debt. The notional  values of these  financial
instruments  were $60.2 million and $76.3 million at December 31, 2000 and 1999,
respectively.  Power  Resources  would be exposed to credit loss in the event of
nonperformance  by the lender under the interest rate swap  agreement.  However,
Power Resources does not anticipate  nonperformance by the lender. The estimated
cost to terminate the interest rate swap agreement,  based on termination values
obtained from the lender, was $3.4 million and $4.1 million at December 31, 2000
and 1999, respectively.

The interest rate can be increased by payments  under a  Compensation  Agreement
included  in Power  Resources'  term loan.  The  Compensation  Agreement,  which
entitles two of the term lenders to receive quarterly  payments  equivalent to a
percentage  of Power  Resources'  discretionary  cash flow  (DCF) as  separately
defined in the agreement, become effective initially for a 13-year period ending
December  31, 2003.  Under  certain  conditions  relating to the amount of Power
Resources' cash flow and the restrictions on cash distributions, Power Resources
has the option to replace the payment  obligation in a quarter with a payment to
be  calculated  in a future  quarter and added to the end of the initial term of
the  agreement.  The  Compensation  Agreement  entitles  the lenders to payments
totaling  10% of DCF for the first  ten  years,  7.5% of DCF for the next  three
years  and  10% of DCF  for  each  quarter  added  to the  initial  term  of the
agreement. Power Resources recorded additional interest expense of $1.2 million,
$.6 million,  and $1.2 million for the years ended December 31, 2000,  1999, and
1998, respectively, related to amounts owed under the Compensation Agreement.

Scheduled  maturities of project  financing debt for the year ending December 31
are as follows (in thousands):

 2001                        $        18,119

 2002                                 20,312

 2003                                 21,742

 Total                       $        60,173


Under Power  Resources'  term loan agreement,  certain  covenants and conditions
must be met before cash distributions can be made, the most significant of which
is the maintenance of a historical  quarterly debt service  coverage ratio of at
least 1.20:1.00 in order to permit all available cash to be  distributed.  Power
Resources was in compliance with these requirements at December 31, 2000.

In October, 1994, Saranac Power Partners signed a 14-year note payable agreement
with a lender for an initial principal amount of $204.6 million. Under the terms
of the note payable agreement,  interest rate alternatives  include an option to
use a  Eurodollar  rate or the  lender's  base rate.  Each  option  includes  an
interest  margin in addition  to the  applicable  rate  selected.  The  selected
interest  rate plus  interest  margin at December 31, 2000,  1999,  and 1998 was
7.5238%, 6.5088%, and 6.1875%, respectively.

Effective  October 7, 1994, the  Partnership  entered into an interest rate swap
agreement with the lender as a means of hedging floating  interest rate exposure
related to its 14-year note payable.  The swap agreement was an initial notional
amount of $204.6  million and  effectively  fixes the  interest  rate at 8.185%,
which will increase to 8.31% in October 2001 and 8.56% in October  2005.  During
2000, 1999, and 1998, the Partnership paid $1.3 million,  $3.6 million, and $3.0
million, respectively,  related to this agreement which was included in interest
expense.   The   Partnership   is  exposed  to  credit  loss  in  the  event  of
nonperformance  by the lender under the interest rate swap  agreement.  However,
the Partnership does not anticipate  nonperformance by the lender. The estimated
cost to terminate the interest rate swap agreements, based on termination values
obtained from the lender, was $8.9 million,  $4.5 million,  and $17.5 million at
December 31, 2000, 1999, and 1998, respectively.
<PAGE>

Maturities  of the  note  payable  at  December  31,  2000  are as  follows  (in
thousands):

                                    2001               $         13,096
                                    2002                         15,552
                                    2003                         18,826
                                    2004                         22,100
                                    2005                         26,192
                                    Thereafter                   74,282
                                                       ----------------
                                    Total              $        170,048
                                                       ----------------

The note agreements are  collateralized by all of the Partnership's  assets. The
Partnership is restricted by the terms of the note payable agreement from making
distributions  or withdrawing  any capital  accounts  without the consent of the
lender. Under the terms of the note payable agreement, distributions may be made
to the partners in accordance with the terms of the Partnership  Agreement.  The
note  payable  agreement  also  requires  the  Partnership  to maintain  certain
covenants. The Partnership was in compliance with these requirements at December
31, 2000.

The Partnership  has issued an irrevocable  letter of credit to its gas supplier
in the amount of $13 million.  The  Partnership has  approximately  $7.5 million
available in additional unissued letters of credit. Annual fees related to these
letters of credit are  calculated as 1.75% of the issued balance and 0.5% of the
unissued balance.

6.       Salton Sea Notes and Bonds

The Salton Sea Funding Corporation (the "Funding  Corporation"),  a wholly-owned
indirect  subsidiary  of CE  Generation,  debt  securities  are as  follows  (in
thousands):
<TABLE>
<CAPTION>

  ISSUED DATE          SENIOR           FINAL                 RATE                             DECEMBER 31,
                       SECURED         MATURITY                                            2000           1999
                       SERIES            DATE

<S>                    <C>           <C>                       <C>              <C>               <C>
 July 21, 1995         A Notes       May 30, 2000              6.69%            $           ---    $      18,532

 July 21, 1995         B Bonds       May 30, 2005              7.37                     100,736          101,776

 July 21, 1995         C Bonds       May 30, 2010              7.84                     109,250          109,250

 June 20, 1996         D Notes       May 30, 2000              7.02                         ---            1,500

 June 20, 1996         E Bonds       May 30, 2011              8.30                      48,922           52,922

 October 13, 1998      F Bonds       November 30, 2018         7.48                     285,000          285,000

                                                                                $       543,908     $    568,980
</TABLE>


Principal and interest payments are made in semi-annual installments. The Salton
Sea Notes and Bonds are non-recourse to CE Generation.

On October 13, 1998, CE Generation  completed a sale to institutional  investors
of $285 million  aggregate  amount of 7.475% Senior  Secured  Series F Bonds due
November 30, 2018. The proceeds of $144.5 million from the offering were used to
partially fund construction of two new geothermal projects at the Salton Sea and
other capital  improvements at the existing  Salton Sea projects.  The remaining
amount of $140.5 million is being used to fund the cost of construction  of, and
was advanced to, the Zinc Recovery  Project,  which is indirectly  100% owned by
Salton Sea Minerals Corp., a MEHC affiliate not owned by CE Generation.
<PAGE>

The net  revenues,  equity  distributions  and  royalties  from the  Partnership
Projects are used to pay principal and interest  payments on outstanding  senior
secured bonds issued by CE Generation, the final series of which is scheduled to
mature  in  November   2018.  CE  Generation   Debt  is  guaranteed  by  certain
subsidiaries  of Magma and secured by the capital  stock of CE  Generation.  The
proceeds of CE  Generation  Debt were loaned by CE  Generation  pursuant to loan
agreements  and  notes  (the  "Imperial   Valley  Project   Loans")  to  certain
subsidiaries  of Magma and used for  construction  of  certain  Imperial  Valley
Projects,  refinancing of certain indebtedness and other purposes.  Debt service
on the  Imperial  Valley  Project  Loans is used to  repay  debt  service  on CE
Generation  Debt.  The Imperial  Valley  Project Loans and the  guarantees of CE
Generation  Debt  are  secured  by  substantially  all  of  the  assets  of  the
guarantors,  including the Imperial Valley Projects, and by the equity interests
in the guarantors.

The  proceeds  of  Series  F of CE  Generation  debt are  being  used in part to
construct  the Zinc  Facility,  and the direct and  indirect  owners of the Zinc
Facility (the "Zinc  Guarantors",  which will include  Salton Sea Minerals Corp.
and Minerals LLC), are among the guarantors of CE Generation debt. In connection
with the  divestiture,  MEHC  guaranteed the payment by the Zinc Guarantors of a
specified  portion of the scheduled debt service on the Imperial  Valley Project
Loans,  including the current  principal amount of approximately  $140.5 million
and associated interest.

Pursuant to a  depository  agreement,  Funding  Corporation  established  a debt
service  reserve  fund in the form of a letter of credit in the  amount of $67.6
million from which scheduled interest and principal payments can be made.

Annual  repayments  of the  Salton  Sea Notes and Bonds for the years  beginning
January 1, 2001 and thereafter are as follows (in thousands):

         2001                               $           23,658
         2002                                           28,572
         2003                                           28,086
         2004                                           30,588
         2005                                           30,374
         Thereafter                                    402,630
                                            ------------------
                                            $          543,908
                                            ------------------

CE  Generation's  ability to obtain  distributions  from its  investment  in the
Salton Sea  Projects  and  Partnership  Projects  is  subject  to the  following
conditions:

         * the  depositary  accounts for the Salton Sea Notes and Bonds must  be
fully funded;

         * there cannot have occurred and be continuing  any default or event of
default under the Salton Sea Notes and Bonds;

         * the  historical  debt  service  coverage  ratio of Salton Sea Funding
Corporation  for the prior four fiscal  quarters must be at least 1.4 to 1.0, if
the distribution occurs prior to 2000, or 1.5 to 1.0, if the distribution occurs
during or after 2000;

         * there must be sufficient  geothermal resources  to operate the Salton
Sea projects at their required levels; and

         * each Salton Sea project under  construction  cannot have failed to be
complete by its  guaranteed  substantial  completion  date,  unless a sufficient
portion  of the  Salton  Sea  Notes and Bonds  have been  redeemed  or a ratings
confirmation has been obtained.
<PAGE>

7.       Senior Secured Bonds

On March 2, 1999,  CE Generation  issued $400 million of 7.416%  Senior  Secured
Bonds due 2018.  These  securities are senior secured debt which rank equally in
right of payment with CE Generation's  other senior secured debt permitted under
the  indenture  for the  securities,  share  equally in the  collateral  with CE
Generation's  other senior  secured debt  permitted  under the indenture for the
securities,  and  rank  senior  to  any  of CE  Generation's  subordinated  debt
permitted  under  the  indenture  for  the  securities.   These  securities  are
effectively  subordinated to the existing  project  financing debt and all other
debt of CE Generation's consolidated subsidiaries.

The Senior Secured Bonds are primarily secured by the following collateral:

         *  all available cash flow (as defined);

         * a pledge of 99% of the equity  interests  in Salton Sea Power and all
of CE Generation's equity interests in its other consolidated subsidiaries;

         *  a pledge of all of the capital stock of SECI Holding Inc.;

         *  a grant of a lien on and security interest in the depository
accounts; and

         * to the extent possible, a grant of a lien on and security interest in
all of CE  Generation's  other tangible and intangible  property,  to the extent
assignable.

MEHC's obligation to make payments on Magma's 9 7/8% promissory notes is secured
by a  pledge  of the  capital  stock  of  Magma  and a  lien  on  dividends  and
distributions in respect of such Magma stock. On March 3, 1999, MEHC repurchased
$195.8 million in aggregate  principal  amount of its 9 7/8% Notes in connection
with a tender  offer  for a  repurchase  price  (including  premium)  of  $215.4
million. In connection with the corresponding reduction of $195.8 million of the
principal  outstanding under Magma's 9 7/8% promissory notes,  $215.4 million of
the proceeds of the Senior Secured Bonds were paid to MEHC. As a result of the 9
7/8% note repurchase  offer,  the outstanding  principal  amount of Magma 9 7/8%
promissory  notes was reduced from $200 million to  approximately  $4.2 million.
MEHC redeemed the remaining  outstanding Magma's 9 7/8% promissory notes on June
30,  2000,  which  was the  first  day upon  which an  optional  redemption  was
permitted under the trust indenture for Magma's 9 7/8% promissory  notes. At the
time of this  redemption,  the  collateral  agent  obtained  a pledge  of all of
Magma's capital stock.

Annual repayments of the Senior Secured Bonds for the years beginning January 1,
2001 and thereafter are as follows (in thousands):

                  2001                               $           12,600
                  2002                                           20,600
                  2003                                           18,000
                  2004                                           14,600
                  2005                                           14,800
                  Thereafter                                    309,000
                                                     ------------------
                                                     $          389,600
                                                     ------------------

8.       Notes Payable to Related Parties

On July 21,  1995,  MEHC  issued $200  million 9 7/8%  Limited  Recourse  Senior
Secured Notes Due 2003 (the "Notes"). The Notes are secured by an assignment and
pledge of 100% of the  outstanding  capital stock of Magma and are recourse only
to such Magma capital stock. The proceeds of the Notes offering were provided by
MEHC to Magma and Magma  issued an  intercompany  note to MEHC in the  amount of
$200 million.
<PAGE>

On January 29, 1999,  MEHC commenced a cash offer for all its outstanding 9 7/8%
Limited  Recourse  Senior  Secured Notes Due 2003.  MEHC  received  tenders from
holders of an aggregate of  approximately  $195.8 million  principal  which were
paid on March 3, 1999 at a redemption  price of 110.025% plus accrued  interest,
resulting in an extraordinary loss of approximately $17.5 million, net of tax of
$11.1  million.  Proceeds from the issuance of CE  Generation's  Senior  Secured
Bonds were used to repay the outstanding principal and interest on the note.

Yuma  Cogeneration  Associates  had  outstanding  a note  payable to MEHC with a
principal balance at December 31, 1998 of $47.7 million, and bearing interest at
a fixed rate of 10.25%.  Proceeds  from the issuance of CE  Generation's  Senior
Secured Bonds were used to repay the  outstanding  principal and interest on the
note.

9.       Commitments and Contingencies

A.  Southern California Edison

Edison, a wholly-owned  subsidiary of Edison International,  is a public utility
primarily  engaged  in the  business  of  supplying  electric  energy  to retail
customers  in  Central  and  Southern  California,  excluding  Los  Angeles.  CE
Generation  is aware that there have been  public  announcements  that  Edison's
financial condition has deteriorated as a result of reduced liquidity.  Based on
public  announcements,  CE  Generation  understands  that  Edison  has not  made
payments to other  qualifying  facilities  ("QFs") from which  Edison  purchases
power and has not made  scheduled  payments  of debt  service.  Edison's  senior
unsecured  debt  obligations  are  currently  rated Caa2 (on watch for  possible
downgrade) by Moody's and D by S&P.

CE  Generation is aware that there have been public  announcements  that Edison,
other  industry  participants  and  governmental  entities have taken actions in
response to Edison's financial condition. These actions include the following:

o    The  Federal  Energy  Regulatory  Commission  ("FERC")  has issued an order
     eliminating   requirements  that  Edison  and  other  California  utilities
     purchase power from the structured  power market in California known as the
     California  Power  Exchange in order to provide them with an opportunity to
     obtain power from alternative sources at a lower cost.

o    The  State  of  California  has  enacted  legislation  to  provide  for the
     California  Department of Water  Resources to purchase  wholesale power and
     sell it to retail customers,  which will be funded by a surcharge on retail
     rates. The California  legislature is also considering other legislation to
     improve the financial condition of the California electric utilities.

o    The California Public Utilities  Commission ("CPUC") approved a decision on
     March 27, 2001 to increase retail  electricity rates by approximately  40%.
     In another decision that day, the CPUC and ordered Edison to pay the QFs on
     a go forward basis within 15 days of the invoice  modified the  purportedly
     calculation of Short Run Avoided Cost.

o    The State of California and Edison have  announced a preliminary  agreement
     for the State to purchase Edison's transmission assets for $2.7 billion and
     to  allow  Edison  to  issue  bonds  for  a  substantial   portion  of  its
     undercollection of revenues.

CE  Generation  can give no  assurance  as to the  likely  result  of any of the
actions  described  above or as to  whether  such  actions  will have a positive
effect on the financial  condition of Edison or its willingness to make payments
under the Power Purchase Agreements.

Edison has failed to pay  approximately $76 million due under the Power Purchase
Agreements  for power  delivered in November and December 2000 and January 2001,
although  the Power  Purchase  Agreements  provide  for billing and payment on a
schedule  where  payments  would have normally  been received in early  January,
February and March 2001. Edison has not notified the Imperial Valley Projects as
to when they can expect to receive these payments. This continued non-payment by
Edison could result in an untenable situation for the continued operation of the
Imperial  Valley  Projects  unless  additional  funds are  obtained  in the near
future.
<PAGE>

On February  21, 2001,  the Imperial  Valley  Projects  filed a lawsuit  against
Edison in  California's  Imperial  County  Superior  Court seeking a court order
requiring  Edison  to make  the  required  payments  under  the  Power  Purchase
Agreements. The lawsuit also requested, among other things, that the court order
permit the Imperial Valley Projects to suspend deliveries of power to Edison and
to permit the Imperial Valley Projects to sell such power to other purchasers in
California.

On March 22, 2001,  the Superior  Court  granted the Imperial  Valley  Projects'
Motion for Summary  Adjudication  and a Declaratory  Judgment  ordering that: 1)
under the Power Purchase Agreements, the Imperial Valley Projects have the right
to  temporarily  suspend  deliveries  of capacity  and energy to Edison,  2) the
Imperial Valley Projects are entitled to resell the energy and capacity to other
purchasers  and 3) the interim  suspension  of deliveries to Edison shall not in
any respect  result in the  modifications  or  termination of the Power Purchase
Agreements and the Power Purchase  Agreements shall in all respects  continue in
full force and effect  other than the  temporary  suspension  of  deliveries  to
Edison.  The Imperial Valley  Projects  intend to vigorously  pursue their other
remedies in this action in light of Edison's continuing non-payment.

CE Generation is hopeful that the current Edison  situation is temporary and the
proceedings in the legal,  regulatory,  financial and political arenas will lead
to the  improvement of Edison's  financial  condition in the near future and the
payment by Edison of amounts due under the Power Purchase  Agreements.  However,
no assurance can be given that this will be the case.

As a result  of  Edison's  failure  to make the  payments  due  under  the Power
Purchase  Agreements  and the recent  downgrades  of  Edison's  credit  ratings,
Moody's has downgraded the ratings for the Salton Sea Funding  Corporation  (the
"Funding  Corporation")  Securities  to  Caa2  (negative  outlook)  and  S&P has
downgraded  the ratings for the Funding  Corporation  Securities to BBB- and has
placed the  Securities  on "credit  watch  negative".  Accordingly,  the Funding
Corporation does not believe it is currently able to obtain funds in the banking
or capital markets.  However, a failure by Edison to make these payments as well
as  subsequent  monthly  payments,  for a  substantial  period of time after the
payments  are due,  is not  expected  to have a material  adverse  effect on the
ability of CE Generation to make payments on the CE Generation bonds due to cash
flows from the Gas  Projects.  However,  there can be no  assurance  that such a
failure by Edison would not cause a material adverse effect.

B.  NYSEG

On February  14, 1995,  NYSEG filed with the FERC a Petition  for a  Declaratory
Order,  Complaint,  and  Request  for  Modification  of Rates in Power  Purchase
Agreements  Imposed  Pursuant to the Public Utility  Regulatory  Policies Act of
1978  ("Petition")  seeking  FERC (i) to declare that the rates NYSEG pays under
the Saranac PPA,  which was approved by the New York Public  Service  Commission
(the  "PSC"),  were in  excess of the level  permitted  under  PURPA and (ii) to
authorize  the PSC to reform the  Saranac  PPA. On March 14,  1995,  the Saranac
Partnership intervened in opposition to the Petition asserting, inter alia, that
the Saranac PPA fully complied with PURPA,  that NYSEG's action was untimely and
that the FERC lacked authority to modify the Saranac PPA. On April 12, 1995, the
FERC by a unanimous  (5-0) decision issued an order denying the various forms of
relief  requested by NYSEG and finding that the rates required under the Saranac
PPA were  consistent  with PURPA and the FERC's  regulations.  On May 11,  1995,
NYSEG  requested  rehearing of the order and, by order issued July 19, 1995, the
FERC  unanimously  (5-0)  denied  NYSEG's  request.  On  June  14,  1995,  NYSEG
petitioned  the United  States  Court of Appeals  for the  District  of Columbia
Circuit (the "Court of Appeals") for review of FERC's April 12, 1995 order. FERC
moved to dismiss  NYSEG's  petition for review on July 28, 1995.  On October 30,
1996,  all  parties  filed  final  briefs  and the Court of  Appeals  heard oral
arguments on December 2, 1996. On July 11, 1997, the Court of Appeals  dismissed
NYSEG's appeal from FERC's denial of the petition on jurisdictional grounds.
<PAGE>

On August 7, 1997,  NYSEG filed a complaint in the U.S.  District  Court for the
Northern  District  of New York  against  the FERC,  the PSC (and the  Chairman,
Deputy  Chairman  and the  Commissioners  of the  PSC as  individuals  in  their
official capacity), the Saranac Partnership and Lockport Energy Associates, L.P.
("Lockport")  concerning the power purchase  agreements  that NYSEG entered into
with Saranac  Partners and  Lockport.  NYSEG's suit asserts that the PSC and the
FERC improperly  implemented  PURPA in authorizing the pricing terms that NYSEG,
the Saranac  Partnership and Lockport agreed to in those  contracts.  The action
raises  similar legal  arguments to those  rejected by the FERC in its April and
July 1995 orders.  NYSEG in addition  asks for  retroactive  reformation  of the
contracts  as of the date of  commercial  operation  and  seeks a refund of $281
million from the Saranac Partnership.  The Saranac Partnership and other parties
have filed motions to dismiss and oral  arguments on those motions were heard on
March 2, 1998 and again on March 3, 1999.  On  September  30, 2000 the  District
Court granted the motions to dismiss.  NYSEG filed a Notice of Appeal on October
25, 2000  appealing  the decision to the United  States Court of Appeals for the
Second  Circuit.  NYSEG filed its appellate  brief on February 9, 2001. On March
12, 2001 Saranac filed its  appellate  brief.  Oral  arguments on the appeal are
expected to occur  during the second  quarter of 2001.  The Saranac  Partnership
believes that NYSEG's claims are without merit for the same reasons described in
the FERC's orders and the District Court's decision.

C.  Other Commitments

Power  Resources  has  contracted to purchase  natural gas for its  cogeneration
facility  under two separate  agreements,  an 8-year  agreement for up to 40,000
MMBTU per day which expires in December  2003 and a 15-year  agreement for 3,600
MMBTU per day which expires in June 2003. These agreements  include annual price
adjustments,  and the 15-year  agreement  includes a provision  which allows the
seller to terminate the agreement with a two-year written notice. As of December
31, 2000, the seller had not elected to terminate this agreement; therefore, the
minimum  volumes  under the 15-year and 8-year  agreements  for the years ending
December 31, are included in the future minimum  payments under these  contracts
as follows (in thousands):

                  2001                                 $     23,608
                  2002                                       24,285
                  2003                                       24,854
                  Total                                $     72,747

CE Generation's geothermal and cogeneration facilities are qualifying facilities
under the Public  Utility  Regulatory  Policies  Act of 1978  (PURPA)  and their
contracts for the sale of electricity are subject to regulations under PURPA. In
order to promote open competition in the industry, legislation has been proposed
in the U.S.  Congress  that calls for either a repeal of PURPA on a  prospective
basis or the significant restructuring of the regulations governing the electric
industry,  including  sections of the Public  Utility  Regulatory  Policies Act.
Current  federal  legislative  proposals  would not abrogate,  amend,  or modify
existing contracts with electric utilities. The ultimate outcome of any proposed
legislation is unknown at this time.

Saranac  has a contract  to purchase  natural  gas from a third  party,  for its
cogeneration  facility  for a period  of 15 years  for an  amount  up to  51,000
MMBTU's  per day.  The price for such  deliveries  is a stated  rate,  escalated
annually at a rate of 4%.

Salton Sea Unit V is  obligated  to supply the  electricity  demands of the Zinc
Recovery  Project at the price  available to Salton Sea Unit V less the wheeling
costs.  Salton  Sea Unit V  Project,  which  commenced  operations  in the third
quarter of 2000, will sell  approximately  one-third of its net output to a zinc
facility,  which is owned by a  subsidiary  of  MidAmerican  and is  expected to
commence  operations in mid-2001.  The remainder of the Salton Sea Unit V output
in 2000 was sold through other market transactions.  On January 17, 2001, Salton
Sea Power,  LLC  entered  into a  transaction  agreement  with El Paso  Merchant
Energy,  L.P.  ("EPME") in which Salton Sea Unit V Project's  available power is
sold to EPME on a day ahead basis.
<PAGE>

The Turbo Project,  which commenced commercial operation in the third quarter of
2000, sells its output through other market  transactions.  On January 17, 2001,
Salton Sea Power LLC entered into a transaction  agreement,  with EPME, in which
the Turbo Project's  available  power is sold to EPME on a day ahead basis.  The
Turbo  Project  may  sell its  output  to a zinc  facility,  which is owned by a
subsidiary of MidAmerican and is expected to commence operations in mid-2001.

The  partnership   projects  have  upgraded  the  geothermal   brine  processing
facilities  at the  Vulcan  and Del  Ranch  projects  with  the  Region  2 brine
facilities construction.

10.      Income Taxes

Provision  for income tax is  comprised  of the  following  at  December  31 (in
thousands):

                          2000              1999              1998

 Current:
 State             $       2,758    $       6,841     $      11,099
 Federal                  15,296           24,903            47,263

                          18,054           31,744            58,362
 Deferred:
 State                     3,284           (3,915)             (836)
  Federal                     64            3,083            (5,308)

                           3,348             (832)           (6,144)
 Total             $      21,402    $      30,912     $      52,218

A  reconciliation  of the federal  statutory  tax rate to the effective tax rate
applicable to income before provision for income taxes follows:
<TABLE>
<CAPTION>
                                                                     2000               1999                1998
<S>                                                                 <C>                 <C>                 <C>
 Federal statutory rate                                              35.0%              35.0%               35.0%
 Percentage depletion in excess of cost depletion                    (4.8)              (6.0)               (4.4)
 Investment and energy tax credits                                  (13.0)              (1.4)               (2.5)
 Goodwill amortization                                                3.0                3.7                 3.1
 State taxes, net of federal benefit                                  3.6                2.0                 4.6
 Other items, net                                                    (4.4)                ---                      ---
 Effective tax rate                                                  19.4%              33.3%               35.8%
</TABLE>

Deferred tax liabilities  (assets) are comprised of the following at December 31
(in thousands):

                                                         2000           1999
 Liabilities:
 Properties, plant, contracts and equipment          $   261,327    $  246,232
 Other                                                     2,329         2,224
                                                         263,656       248,456
 Assets:
 Accruals not currently deductible for tax purposes       (4,512)       (9,356)
 General business tax credits                            (15,501)          ---
 Other                                                    (1,584)       (1,780)
                                                         (21,597)      (11,136)
 Net deferred taxes                                      242,059       237,320
 Less current portion (deferred tax asset)                (2,878)       (9,256)

 Long-term deferred tax liability                    $   244,937    $  246,576

<PAGE>

11.      Fair Value of Financial Instruments

The fair value of a financial  instrument is the amount at which the  instrument
could be exchanged in a current transaction between willing parties,  other than
in a forced sale or liquidation.  Although  management uses its best judgment in
estimating  the fair value of these  financial  instruments,  there are inherent
limitations in any estimation  technique.  Therefore,  the fair value  estimates
presented  herein  are  not  necessarily  indicative  of the  amounts  which  CE
Generation could realize in a current transaction.

The fair value of the note  receivable  from related party is estimated based on
the quoted market price of the corresponding debt issue.

The fair  value of all debt  issues  listed  on  exchanges,  including  the note
payable to related  party which is based on a debt issue  listed on an exchange,
has been estimated based on the quoted market prices. The remaining note payable
to related party,  which is not based on market prices, and the project loan are
estimated to have a fair value equal to the carrying value.

The carrying amounts in the table below are included in the consolidated balance
sheets under the indicated captions (in thousands):

                                             2000                  1999
                                    CARRYING    ESTIMATED  CARRYING    ESTIMATED
                                      VALUE       FAIR      VALUE         FAIR
                                                  VALUE                  VALUE
 Financial Assets:
 Note receivable from related party $140,528  $  116,947   $140,528  $  128,815

 Financial Liabilities:
 Project loan                        230,221     230,221     76,261      76,261
 Salton Sea notes and bonds          543,908     468,752    560,880     540,659
 Interest rate swap                      ---      12,309        ---       4,082
 Senior secured bonds                389,600     338,952    400,000     366,800


12.      Transactions with MEHC

MEHC provides certain  administrative and management  services to CE Generation,
and  MEHC's  executive,   financial,   legal,  tax  and  other  corporate  staff
departments  perform certain  services for CE Generation.  Expenses  incurred by
MEHC and  allocated  to CE  Generation  are  estimated  based on the  individual
services and expense items provided.  Allocated  expenses totaled  approximately
$3.5 million, $2.7 million and $3.0 million for each of 2000, 1999 and 1998, and
are included in General and Administrative expenses.

13.      New Borrowings

On May 26, 2000, CE Generation issued a $6.5 million 10% note due June 15, 2005,
in favor of MidAmerican  Energy Holdings Company and a $6.5 million 10% note due
June 15, 2005 in favor of El Paso Merchant Energy Company. The notes were repaid
on October 16, 2000.

On July 21, 1995,  Salton Sea Funding  Corporation  obtained a $15 million seven
year  revolving  credit  agreement  between  Credit Suisse as bank and agent and
other  lenders.  The interest rate is at the Adjusted Base Rate plus .375% or at
the LIBOR  rate plus 100 basic  points.  On May 26,  2000,  Salton  Sea  Funding
Corporation borrowed $15 million under its revolving credit agreement.  The loan
was repaid in two  installments,  $5 million on July 26, 2000 and $10 million on
August 28, 2000.
<PAGE>

14.      Related Party Transactions

On June 9, 2000,  Salton Sea Power L.L.C.  ("Salton Sea Power")  entered into an
agreement to sell all available power from the Salton Sea Unit V project El Paso
Merchant Energy ("EPME"). Under the terms of the agreement commencing on July 1,
2000 and ending on September 30, 2000,  EPME  purchased up to 25 MW of available
power for $53 per MWh,  together with any premiums  related to such power.  EPME
also marketed any available  power which  exceeded 25 MW on behalf of Salton Sea
Power.

On September  29, 2000,  Salton Sea Power and CE Turbo LLC ("CE Turbo")  entered
into an agreement to sell all available  power from the Salton Sea Unit V and CE
Turbo to EPME.  Under  the  terms  of the  agreement,  EPME  will  purchase  all
available power and sell available  power,  on behalf of Salton Sea Power,  into
the California ISO markets.  The purchase price for the available power shall be
equivalent  to the value  actually  received by EPME for the sale of such power,
including renewable premiums.


<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

EXECUTIVE OFFICER                         POSITION


Douglas L. Anderson             Director, Vice President and General Counsel
Brian K. Hankel                 Vice President and Treasurer
Richard P. Johnston             Vice President and Commercial Officer
Joseph M. Lillo                 Vice President and Controller
Stefan Bird                     Director
Patrick J. Goodman              Director
Larry Kellerman                 Director
John L. Harrison                Director
John O'Rourke                   Director

DOUGLAS L.  ANDERSON,  43,  Vice  President  and  General  Counsel of  CalEnergy
Generation,  CE Generation and each subsidiary.  Mr. Anderson joined MidAmerican
in February 1993. From 1990 to 1993, Mr.  Anderson was a business  attorney with
Fraser, Stryker,  Meusey, Olson, Boyer & Bloch, P.C. in Omaha. From 1987 through
1989,  Mr.  Anderson was a principal in the firm  Anderson & Anderson.  Prior to
that, he was an attorney with Foster,  Swift,  Collins & Smith, P.C. in Lansing,
Michigan.

BRIAN K. HANKEL, 38, Vice President and Treasurer of MidAmerican,  CE Generation
and each assigning subsidiary. Mr. Hankel joined MidAmerican in February 1992 as
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  MidAmerican,  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.

RICHARD P. JOHNSTON,  44, Vice President and Commercial Officer of CE Generation
and Director of Operations for El Paso  International.  Mr.  Johnston  joined El
Paso in 1997  and  was  assigned  to the CE  Generation  management  team at its
founding in March of 1999.  In his 21 years of  experience  in power  generation
engineering  and  management,  Mr.  Johnston has held positions  directing Plant
Operations and Maintenance, Asset Management and Project Development in both the
Domestic  and  International  Markets  for ESI Energy,  a Florida  Power & Light
subsidiary,  from  1993 to 1997,  and  previously  for The AES  Corp.,  based in
Arlington,  VA,  and  Westinghouse,  based in  Orlando,  FL.  Mr.  Johnston  has
extensive experience in hands-on management of the operations and maintenance of
oil and gas-fired  combustion  turbines,  coal,  biomass,  geothermal  and solar
independent   power,   including   all  aspects  of   construction   management,
mobilization and start-up.

JOSEPH M. LILLO,  31, Vice  President and  Controller of CE Generation  and each
assigning subsidiary.  Mr. Lillo joined MidAmerican in November 1996, and served
as manager of Financial  Reporting and was promoted to  Controller/IPP  in March
1998.  Mr. Lillo was promoted to Vice  President  and  Controller  in July 1999.
Prior to joining  MidAmerican,  Mr. Lillo was a senior  associate with Coopers &
Lybrand LLP.

STEFAN BIRD,  34, Vice  President,  Project  Development  of  MidAmerican  and a
director  of CE  Generation  and each  assigning  subsidiary.  Mr.  Bird  joined
MidAmerican in January of 1998 as Project  Development  Manager and was promoted
to Vice  President,  Project  Development  in  August  1999.  Prior  to  joining
MidAmerican,  Mr. Bird held various  positions at Koch  Industries  from 1989 to
1997  including   Director  of  Finance,   Latin  America  for  Koch  Industries
International  in Mexico City;  Director of Marketing  and Risk Manager for Koch
Power  Services  in  Houston,   Texas;   Senior   Financial   Analyst  for  Koch
International  Financial  Services in Fribourg,  Switzerland;  Project  Manager,
Corporate  Development  for Koch  Industries  in  Wichita,  Kansas;  and Project
Engineer  and  Maintenance  Planner  for  Koch  Refining  Company  in St.  Paul,
Minnesota.
<PAGE>

PATRICK J. GOODMAN,  34, Senior Vice  President and Chief  Financial  Officer of
MidAmerican and a director of CE Generation and each assigning  subsidiary.  Mr.
Goodman joined  MidAmerican in June 1995 and served as Manager of  Consolidation
Accounting until September 1996 when he was promoted to Controller.  Mr. Goodman
was  promoted  to Chief  Financial  Officer  in  April  1999.  Prior to  joining
MidAmerican, Mr. Goodman was a financial manager for National Indemnity Co. from
1993 to 1995 and a certified public accountant at Coopers & Lybrand from 1989 to
1993.

LARRY KELLERMAN,  45, President of El Paso Power Services Company and a director
of CE  Generation.  Mr.  Kellerman  joined El Paso in  February  1998.  Prior to
joining  El Paso,  he was  President  of  Citizens  Power,  where  he  initiated
Citizens' activities in the power marketing field in 1988, when Citizens was the
initial power marketer granted FERC  authorization.  From 1982 through 1988, Mr.
Kellerman was General  Manager of Power  Marketing and Power Supply for Portland
General  Electric.  From 1979 through 1982, Mr. Kellerman was Financial  Analyst
and  Power  Contract  Negotiator  with  Southern  California  Edison,  where  he
negotiated some of the first Public Utility  Regulatory  Policies Act qualifying
facility contracts in the nation.

JOHN L. HARRISON, 42, Senior Managing Director and Chief Financial Officer of El
Paso Merchant  Energy and a director of CE Generation.  Mr.  Harrison  joined El
Paso in June 1996.  Prior to joining El Paso,  Mr.  Harrison  was a partner with
Coopers & Lybrand LLP for five years.

JOHN  O'ROURKE,  46,  Director.  John J.  O'Rourke has served as a member of the
Management  Committee  since March  2001.  Mr.  O'Rourke  has served as Managing
Director,  Commercial  Management  for El Paso  Merchant  Energy since May 2000.
Prior to becoming  Managing  Director for El Paso Merchant Energy,  Mr. O'Rourke
has held several other senior  management  positions in the energy business over
the past 20 years with FPL Energy and Ebasco Services, Inc.

The directors and executive officers do not receive any compensation for serving
in these positions.


<PAGE>


Item 11. Executive Compensation

     CE Generation's  directors and executive  officers  receive no remuneration
for serving in such capacities.

Item 12.      Security Ownership of Certain Beneficial Owners and Management

     Fifty percent of CE Generation's interests are owned by MidAmerican and the
other 50% are owned by El Paso Power.  There is no public  trading market for CE
Generation's  membership interests.  None of the directors or executive officers
beneficially own any of the equity interests.  MidAmerican's common stock is not
publicly traded.  El Paso Power is owned indirectly by El Paso. El Paso's common
stock is publicly traded on the New York Stock Exchange.

Item 13.      Certain Relationships and Related Transactions

Relationship with MidAmerican and El Paso Corporation

CE Generation  is 50% owned by  MidAmerican  and 50% owned by El Paso Power.  CE
Generation's  activities  are  restricted  by the terms of the indenture for the
securities  to (1) ownership of our  subsidiaries  and related  activities,  (2)
acting as issuer of securities  and other  indebtedness  as permitted  under the
indenture  and  related  activities  and (3) other  activities  which  could not
reasonably  be  expected to result in a material  adverse  effect so long as the
rating agencies  confirm that these activities will not result in a downgrade of
their  ratings  of the  securities.  CE  Generation  and  each of the  assigning
subsidiaries have been organized and are operated as legal entities separate and
apart from MidAmerican,  El Paso and their other affiliates,  and,  accordingly,
our assets and the assets of the  assigning  subsidiaries  will not be generally
available to satisfy the  obligations  of  MidAmerican,  El Paso or any of their
other affiliates. However, our and the assigning subsidiaries' unrestricted cash
and other assets which are available for distribution may, subject to applicable
law and the terms of our and the assigning subsidiaries' financing arrangements,
be advanced,  loaned, paid as dividends or otherwise  distributed or contributed
to MidAmerican,  El Paso or their affiliates. The securities are non-recourse to
MidAmerican and El Paso.

In  connection  with  El  Paso  Power's  acquisition  of 50% of CE  Generation's
interests, MidAmerican entered into an administrative services agreement with CE
Generation and El Paso Power entered into a power marketing  services  agreement
and a fuel management services agreement with CE Generation.  MidAmerican and El
Paso Power are reimbursed for the actual costs and expenses of performing  their
obligations under these  agreements.  These agreements each have an initial term
of one year and then  continue  from  year to year  until  terminated  by either
party.


<PAGE>


                                     PART IV


Item 14.      Exhibits, Financial Statements Schedule and Reports on Form 8-K

     (a) Financial Statements and Schedules

         (i)  Financial Statements

              Financial Statements are included in Part II of this Form 10-K

         (ii) Financial Statement Schedules

              Financial  Statement  Schedules are not included  because they are
              not required or the information required is included in Part II of
              this Form 10-K.

     (b) Reports on Form 8-K

         Not applicable.

     (c) Exhibits

         The exhibits listed on the accompanying Exhibit Index are filed as part
of this Annual Report.

     (d) Financial  statements  required by Regulations  S-X, which are excluded
from the Annual Report by Rule 14a-3(b).

     Not Applicable


<PAGE>


SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  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 this 28th day of March, 2001.

                                CE Generation LLC

                             /s/ Douglas L. Anderson
                             By:      Douglas L. Anderson
                             Director, Vice President and General Counsel

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

         Signature                                     Date

/s/ Douglas L. Anderson                            March 28, 2001
Director, Vice President and General Counsel
(Principal Executive Officer)

/s/ Joseph M. Lillo*                               March 28, 2001
Vice President and Controller
(Principal Accounting Officer)

/s/ Stefan Bird*                                   March 28, 2001
Director

/s/ Patrick J. Goodman*                            March 28, 2001
Director

/s/ Larry Kellerman*                               March 28, 2001
Director

/s/ John L. Harrison*                              March 28, 2001
Director

/s/ John O'Rourke*                                 March 28, 2001
Director



*  By:  /s/ Douglas L. Anderson
         Attorney-in-Fact


<PAGE>


                                  EXHIBIT INDEX

3.1  Certificate of Formation of CE Generation,  LLC  (incorporated by reference
     to Exhibit 3.1 to the Company's Registration Statement on Form S-4).

3.2  Limited  Liability  Company  Operating  Agreement  of  CE  Generation,  LLC
     (incorporated  by  reference to Exhibit 3.2 to the  Company's  Registration
     Statement on Form S-4).

4.1  Indenture, dated as of March 2, 1999, by and between CE Generation, LLC and
     Chase Manhattan Bank and Trust Company,  National Association (incorporated
     by reference to Exhibit 4.1 to the Company's Registration Statement on Form
     S-4).

4.2  Form of First  Supplemental  Indenture to be entered into by and between CE
     Generation,  LLC and  Chase  Manhattan  Bank and  Trust  Company,  National
     Association,  Trustee  (incorporated  by  reference  to Exhibit  4.2 to the
     Company's Registration Statement on Form S-4).

4.3  Purchase  Agreement,  dated  February 24, 1999, by and among CE Generation,
     LLC,  Credit  Suisse First Boston  Corporation  and Lehman  Brothers,  Inc.
     (incorporated  by  reference to Exhibit 4.3 to the  Company's  Registration
     Statement on Form S-4).

4.4  Exchange and Registration  Rights Agreement,  dated as of March 2, 1999, by
     and among CE Generation,  LLC,  Credit Suisse First Boston  Corporation and
     Lehman  Brothers,  Inc.  (incorporated  by  reference to Exhibit 4.4 to the
     Company's Registration Statement on Form S-4).

4.5  Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated as
     of March 2, 1999, by and among CE Generation,  LLC, the banks named therein
     and Credit  Suisse First  Boston,  as Agent  (incorporated  by reference to
     Exhibit 4.5 to the Company's Registration Statement on Form S-4).

4.6  Deposit and Disbursement Agreement, dated as of March 2, 1999, by and among
     CE Generation,  LLC, Magma Power Company,  Salton Sea Power Company, Falcon
     Seaboard  Resources,  Inc.,  Falcon  Seaboard  Power  Corporation,   Falcon
     Seaboard Oil Company,  California Energy Development Corporation,  CE Texas
     Energy  LLC  and  Chase   Manhattan  Bank  and  Trust   Company,   National
     Association,  as Collateral  Agent and  Depositary  Bank  (incorporated  by
     reference to Exhibit 4.6 to the  Company's  Registration  Statement on Form
     S-4).

4.7  Intercreditor  Agreement,  dated  as of  March  2,  1999,  by and  among CE
     Generation,  LLC,  Magma Power Company,  Salton Sea Power  Company,  Falcon
     Seaboard  Resources,  Inc.,  Falcon  Seaboard  Power  Corporation,   Falcon
     Seaboard Oil Company,  California Energy Development Corporation,  CE Texas
     Energy LLC,  Credit Suisse First Boston and Chase  Manhattan Bank and Trust
     Company, National Association,  as Trustee, Collateral Agent and Depositary
     Bank   (incorporated   by  reference  to  Exhibit  4.7  to  the   Company's
     Registration Statement on Form S-4).

4.8  Assignment and Security Agreement,  dated as of March 2, 1999, by and among
     Magma Power Company,  Salton Sea Power Company,  Falcon Seaboard Resources,
     Inc.,  Falcon  Seaboard  Power  Corporation,  Falcon  Seaboard Oil Company,
     California  Energy  Development  Corporation,  CE Texas Energy LLC,  Credit
     Suisse First Boston and Chase  Manhattan Bank and Trust  Company,  National
     Association,  as Collateral Agent (incorporated by reference to Exhibit 4.8
     to the Company's Registration Statement on Form S-4).
<PAGE>

4.9  Assignment  and  Security  Agreement,  dated as of March  2,  1999,  by and
     between CE  Generation,  LLC and Chase  Manhattan  Bank and Trust  Company,
     National  Association,  as Collateral  Agent  (incorporated by reference to
     Exhibit 4.9 to the Company's Registration Statement on Form S-4).

4.10 Pledge  Agreement  (SSPC Stock),  dated as of March 2, 1999, by Magma Power
     Company  in favor of Chase  Manhattan  Bank  and  Trust  Company,  National
     Association, as Collateral Agent (incorporated by reference to Exhibit 4.10
     to the Company's Registration Statement on Form S-4).

4.11 Pledge Agreement (FSRI Stock and CEDC Stock),  dated as of March 2, 1999 by
     CE  Generation,  LLC in favor of Chase  Manhattan  Bank and Trust  Company,
     National  Association,  as Collateral  Agent  (incorporated by reference to
     Exhibit 4.11 to the Company's Registration Statement on Form S-4).

4.12 Securities  Account  Control  Agreement,  dated as of March 2, 1999, by and
     among CE Generation,  LLC,  Magma Power Company,  Salton Sea Power Company,
     Falcon Seaboard Resources, Inc., Falcon Seaboard Power Corporation,  Falcon
     Seaboard Oil Company,  California Energy Development Corporation,  CE Texas
     Energy LLC,  Credit Suisse First Boston and Chase  Manhattan Bank and Trust
     Company,  National  Association,  as Collateral  Agent and Depositary  Bank
     (incorporated  by reference to Exhibit 4.12 to the  Company's  Registration
     Statement on Form S-4).

24.0 Power of Attorney