CONSOLIDATED BALANCE SHEETS
As of December 31, 1996 and 1995
Dollars and Shares in Thousands Except Per Share Amounts

ASSETS                                       1996       1995


Cash and cash equivalents             $   424,500  $  72,114
Joint venture cash and investments         48,083     77,590
Restricted cash                           107,143    149,227
Short-term investments                      4,921     34,190
Accounts receivable                       342,307     57,909
Due from joint ventures                    17,556     27,273
Properties, plants, contracts and
 equipment, net                         3,348,583  1,781,255
Excess of cost over fair value of
 net assets acquired, net                 790,920    302,288
Equity investments                        196,535     60,815
Deferred charges and other assets         432,359     91,377


Total assets                           $5,712,907 $2,654,038


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable                         $218,182  $   6,638
Other accrued liabilities                 674,842     87,892
Parent company debt                     1,146,685    842,205
Subsidiary and project debt             1,754,895    921,219
Deferred income taxes                     469,199    226,520


Total liabilities                       4,263,803  2,084,474


Deferred income                            29,067     26,032


Commitments and contingencies (Notes 3, 17, 18, 19 and 20)
Company - obligated mandatorily redeemable
  convertible preferred securities of
  subsidiary trust holding solely
  convertible debentures                  103,930        ---
Preferred securities of subsidiary        136,065        ---
Minority interest                         299,252        ---


Stockholders' equity:
Preferred stock - authorized 2,000 
  shares, no par value                        ---        ---
Common stock - par value $.0675 per share,
 authorized 80,000 shares, issued 63,747
 and 50,680 shares, outstanding 63,448
 and 50,593 shares, respectively            4,303      3,421
Additional paid in capital                563,567    343,406
Retained earnings                         297,520    205,059
Cumulative effect of foreign currency
 translation adjustment                    29,658        ---
Treasury stock - 299 and 87 common
 shares at cost                            (8,787)    (1,348)
Unearned compensation - restricted stock   (5,471)    (7,006)


Total stockholders' equity                880,790     543,532


Total liabilities and stockholders'
 equity                                $5,712,907  $2,654,038

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


CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Years Ended December 31, 1996
Dollars and Shares in Thousands Except Per Share Amounts

                                      1996      1995     1994


Revenue:
Sales of electricity and steam     $518,934  $335,630 $154,562
Income on equity investments          6,134      ---       ---
Royalty income                        6,846   19,482       ---
Interest and other income            44,281   43,611    31,292


Total revenues                      576,195  398,723   185,854


Cost and expenses:
Operating expense                   108,962   79,294    33,015
Cost of sales                        31,840      ---       ---
General and administration           21,451   23,376    13,012
Royalty expense                      23,693   24,308     9,888
Depreciation and amortization       118,586   72,249    21,197
Loss on equity investment in Casecnan 5,221      362       ---
Interest expense                    165,900  134,637    62,837
Less interest capitalized           (39,862) (32,554)   (9,931)
Dividends on convertible preferred
 securities of subsidiary trust       4,691      ---       ---

Total expenses                      440,482  301,672   130,018

Income before provision for
 income taxes                       135,713   97,051    55,836
Provision for income taxes           41,821   30,631    17,002

Income before extraordinary item     93,892   66,420    38,834
Extraordinary item                      ---      ---    (2,007)

Income before minority interest 
 and preferred dividends             93,892   66,420    36,827
Minority interest                     1,431    3,005       ---


Net income                           92,461   63,415    36,827
Preferred dividends                     ---    1,080     5,010

Net income available to common
 stockholders                       $92,461  $62,335   $31,817

Income per share before 
 extraordinary item                 $  1.60  $  1.25   $   .95

Extraordinary item                      ---     ---       (.06)

Net income per share - primary        $1.60    $1.25     $ .89


Net income per share - fully diluted  $1.50    $1.18     $ .88


Average number of shares
 outstanding - primary               57,870   49,971    35,721


Fully diluted shares                 67,164   57,742    40,166


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


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Three Years Ended December 31, 1996
Dollars and Shares in Thousands

<TABLE>
<CAPTION>
                           Outstanding       Additional            Foreign
                             Common   Common   Paid-In    Retained  Currency  Treasury   Unearned
                             Shares   Stock    Capital    Earnings  Adjust.   Stock     Compensation  Total

<S>                           <C>     <C>     <C>       <C>       <C>       <C>       <C>           <C>
Balance December 31, 1993     35,446  $2,404  $100,965  $111,031  $    ---  $(2,897)  $   ---       $211,503
Exercise of stock options         46       3       379       ---       ---      ---       ---            382
Purchase of treasury stock    (3,765)    ---       ---       ---       ---  (65,119)      ---        (65,119)
Exercise of stock options
 from treasury stock              96     ---    (1,473)      ---       ---    1,772       ---            299
Employee stock purchase plan
 issues from treasury stock       26     ---      (122)      ---       ---      470       ---            348
Preferred stock dividends,
 Series C, including cash
 distribution of $121            ---    ---        ---    (4,921)      ---      ---       ---         (4,921)
Tax benefit from stock plan      ---    ---        672       ---       ---      ---       ---            672
Net income before preferred
 dividends                       ---    ---        ---    36,827       ---      ---       ---         36,827

Balance December 31, 1994     31,849  2,407    100,421   142,937       ---  (65,774)      ---        179,991
Equity offering               18,170  1,004    240,825       ---       ---   56,801       ---        298,630
Exercise of stock options        102      7        303       ---       ---      ---       ---            310
Restricted stock                 500    ---        848       ---       ---    8,652    (9,500)           ---
Amortization of unearned
 compensation                    ---    ---        ---       ---       ---      ---     2,494          2,494
Employee stock purchase
 plan issues                      41      3        559       ---       ---      ---       ---            562
Exercise of stock options
 from treasury stock              33    ---       (416)      ---       ---      563       ---            147
Purchase of treasury stock      (102)   ---        ---       ---       ---   (1,590)      ---         (1,590)
Preferred stock dividends, 
 Series C, including cash
 distribution of $43             ---    ---        ---    (1,293)      ---      ---       ---         (1,293)
Tax benefit from stock plan      ---    ---        866       ---       ---      ---       ---            866
Net income before preferred
 dividends                       ---    ---        ---    63,415       ---      ---       ---         63,415


Balance December 31, 1995     50,593  3,421    343,406   205,059       ---   (1,348)   (7,006)       543,532
Exercise of stock options and
 other equity transactions     4,971    335     57,190       ---       ---        1       ---         57,526
Amortization of unearned
 compensation                    ---    ---        ---       ---       ---      ---     1,535          1,535
Employee stock purchase plan
 issues                           60      2        547       ---       ---      588       ---          1,137
Exercise of stock options
 from treasury stock             232    ---     (4,707)      ---       ---    3,980       ---           (727)
Purchase of treasury stock      (472)   ---        ---       ---       ---  (12,008)      ---        (12,008)
Conversion of debt             8,064    545    164,912       ---       ---      ---       ---        165,457
Tax benefit from stock plan      ---    ---      2,219       ---       ---      ---       ---          2,219
Foreign currency translation
 adjustment                      ---    ---        ---       ---    29,658      ---       ---         29,658
Net income                       ---    ---        ---    92,461       ---      ---       ---         92,461

Balance December 31, 1996     63,448 $4,303   $563,567  $297,520   $29,658  $(8,787)  $(5,471)      $880,790

</TABLE>

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


CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Years Ended December 31, 1996
Dollars in Thousands
                                                      1996      1995      1994
Cash flows from operating activities:
Net income                                          $92,461  $ 63,415  $ 36,827
Adjustments to reconcile net cash flow from operating activities:
  Depreciation and amortization                     109,447    65,244    21,197
  Amortization of excess of cost over fair
   value of net assets acquired                       9,139     7,005       ---
  Amortization of original issue discount            50,194    45,409    31,946
  Amortization of deferred financing costs            9,677     8,979     1,885
  Amortization of unearned compensation               1,535     2,494       ---
  Provision for deferred income taxes                12,252    13,983     8,258
  Loss (income) on equity investments                  (910)      362       ---
  Income applicable to minority interest              1,431     3,005       ---
  Changes in other items:
   Accounts receivable                              (13,936)      213    (6,614)
   Accounts payable and other accrued liabilities      (942)    5,922    19,364
   Deferred income                                    3,035     6,181      (437)
Net cash flows from operating activities            273,383   222,212   112,426
Cash flows from investing activities:
Purchase of Northern, Falcon Seaboard, Partnership
 Interest and Magma, net of cash acquired          (474,443) (907,614)   (3,043)
Distributions from equity investments                 8,222       ---       ---
Capital expenditures relating to operating
 projects                                           (24,821)  (27,120)  (38,078)
Philippine construction                            (167,160) (289,655)  (69,997)
Indonesian and other development                    (81,068)   (8,973)   (2,445)
Salton Sea IV construction                          (63,772)  (62,430)      ---
Pacific Northwest, Nevada, and Utah
 exploration costs                                   (4,885)  (10,445)   (8,493)
Decrease (increase) in short-term investments        33,998    80,565   (50,000)
Decrease (increase) in restricted cash               63,175   (17,452)  (83,670)
Other                                                (2,591)   11,514     1,847
Investment in Casecnan                                  ---   (61,177)      ---
Net cash flows from investing activities           (713,345)(1,292,787)(253,879)
Cash flows from financing activities:
Proceeds from sale of common and treasury stock
 and exercise of stock options                       54,935    299,649    1,580
Proceeds from convertible preferred securities
 of subsidiary trust                                103,930        ---      ---
Proceeds from issuance of parent company debt       324,136    200,000  400,000
Net proceeds from revolver                           95,000        ---      ---
Proceeds from subsidiary and project debt           428,134    654,695   31,503
Repayments of subsidiary and project debt          (210,892)  (176,664) (13,800)
Deferred charges relating to debt financing         (36,010)   (34,733) (11,905)
Decrease (increase) in amounts due from
 joint ventures                                      10,756    (29,169)     316
Purchase of treasury stock                          (12,008)    (1,590) (65,119)
Proceeds from merger facility                           ---    500,000      ---
Recapitalization of merger facility                     ---   (500,000)     ---
Defeasance of 12% senior notes                          ---        ---  (35,730)
Net cash flows from financing activities            757,981    912,188  306,845
Effect of exchange rate changes                       4,860        ---      ---
Net increase (decrease) in cash and investments     322,879   (158,387) 165,392
Cash and cash equivalents at beginning of period    149,704    308,091  142,699
Cash and cash equivalents at end of period         $472,583   $149,704 $308,091
Supplemental Disclosures:
Interest paid (net of amounts capitalized)         $ 92,829   $ 50,840 $ 12,624
Income taxes paid                                  $ 23,211   $ 14,812 $  4,926

   See note 6 regarding conversion of debt to equity.

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


NOTES Consolidated Financial Statements
For the Three Years Ended December 31, 1996
Dollars and Shares in Thousands, Except Per Share Amounts

1. Business

CalEnergy  Company,  Inc.  (the "Company") is  a  United  States-based
global   power  company  which  generates,  distributes  and  supplies
electricity  to utilities, government entities, retail  customers  and
other customers located throughout the world.  The Company was founded
in  1971  and  through its subsidiaries is primarily  engaged  in  the
development,  ownership  and operation of environmentally  responsible
independent power production facilities worldwide utilizing geothermal
resources, natural gas and hydroelectric or other energy sources, such
as   oil  and  coal.   In  addition,  through  its  recently  acquired
subsidiary,  Northern, the Company is engaged in the distribution  and
supply of electricity to approximately 1.5 million customers primarily
in  northeast  England  as  well  as  the  generation  and  supply  of
electricity   (together  with  other  related   business   activities)
throughout England and Wales.

The  Company  has  organized several partnerships and  joint  ventures
(herein  referred to as the "Coso Joint Ventures") in order to develop
geothermal  energy at the China Lake Naval Air Weapons  Station,  Coso
Hot  Springs,  China  Lake,  California.  Collectively,  the  projects
undertaken  by these Coso Joint Ventures are referred to as  the  Coso
Project.   In  1992,  the Company entered into the  natural  gas-fired
electrical  generation market through the purchase  of  a  development
opportunity  in Yuma, Arizona which commenced commercial operation  in
May  1994.  In  1993,  the  Company started  developing  a  number  of
international   power  project  opportunities  where   private   power
generating programs have been initiated, including the Philippines and
Indonesia.   In  1995,  the  Company  acquired  Magma  Power   Company
("Magma"). Magma's operating assets included four projects referred to
as  the  Partnership Project in which Magma had a  50%  interest,  and
three  projects referred to as the Salton Sea Project of  which  Magma
owned  100%.  A fourth project included in the Salton Sea Project  was
constructed after the acquisition of Magma and commenced operations in
June  1996.   In  addition, in April 1996, the  Company  acquired  the
remaining  50% interest in the Partnership Project.  In  August  1996,
the   Company  acquired  Falcon  Seaboard  Resources,  Inc.   ("Falcon
Seaboard") which includes significant interests in three operating gas-
fired cogeneration facilities and a related natural gas pipeline.   On
December  24, 1996, CE Electric UK plc ("CE Electric"), which  is  70%
owned  indirectly  by  the Company and 30% owned indirectly  by  Peter
Kiewit  Sons',  Inc.  ("PKS"),  acquired  majority  ownership  of  the
outstanding  ordinary share capital of Northern pursuant to  a  tender
offer ("Tender Offer").  The total amount expected to be paid for  all
of  Northern's  ordinary and preference shares is  approximately  $1.3
billion.

Northern  is  one  of the twelve regional electric companies  ("RECs")
which  came  into  existence  as a result  of  the  restructuring  and
subsequent  privatization of the electricity industry  in  the  United
Kingdom  in  1990.  Northern is primarily engaged in the  distribution
and  supply of electricity.  Northern was granted a Public Electricity
Supply  ("PES")  license under the Electricity Act to  distribute  and
supply  electricity in Northern's Authorized Area ("Authorized Area").
Northern's   Authorized  Area  covers  approximately   14,400   square
kilometers  with a population of approximately 3.2 million people  and
includes  the  counties  of Northumberland,  Tyne  and  Wear,  Durham,
Cleveland  and  North  Yorkshire. Northern  distributes  and  supplies
electricity  outside its Authorized Area pursuant to second  tier  PES
licenses.   Northern  also  is involved in  non-regulated  activities,
including   the   generation  of  electricity,  electrical   appliance
retailing and gas exploration and production.

2. Summary of Significant Accounting Policies

The  consolidated  financial statements include the  accounts  of  the
Company, its wholly-owned subsidiaries, and its proportionate share of
the  partnerships  and joint ventures in which  it  has  an  undivided
interest  in the assets and is proportionally liable for its share  of
liabilities.  Other investments and corporate joint ventures where the
Company  has  the  ability  to  exercise  significant  influence   are
accounted  for  under  the equity method of accounting.   Investments,
where the Company's ability to influence is limited, are accounted for
under the cost method of accounting.  All significant inter-enterprise
transactions  and  accounts  have been  eliminated.   The  results  of
operations of the Company include the Company's proportionate share of
results  of  operations of entities acquired as of the  date  of  each
acquisition.

Investments and Restricted Cash

Investments other than restricted cash are primarily commercial  paper
and money market securities. The restricted cash balance includes such
securities  and mortgage backed securities, and is mainly composed  of
amounts  deposited in restricted accounts from which the Company  will
source  its equity contributions and debt service reserve requirements
relating  to  the  projects.   These funds  are  restricted  by  their
respective  project debt agreements to be used only  for  the  related
project.

At  December 31, 1996, all of the Company's investments are classified
as  held-to-maturity  and are accounted for at  their  amortized  cost
basis.  The carrying amount of the investments approximates  the  fair
value  based  on  quoted market prices as provided  by  the  financial
institution which holds the investments.

Well, Resource Development and Exploration Costs

The  Company  follows  the full cost method of  accounting  for  costs
incurred  in  connection  with  the  exploration  and  development  of
geothermal resources. All such costs, which include dry hole costs and
the  cost  of  drilling and equipping production  wells  and  directly
attributable  administrative and interest costs, are  capitalized  and
amortized over their estimated useful lives when production commences.
The estimated useful lives of production wells are ten to twenty years
depending   on   the  characteristics  of  the  underlying   resource;
exploration costs and development costs, other than production  wells,
are  generally amortized over the weighted average remaining  term  of
the Company's power and steam purchase contracts.

Deferred Well and Rework Costs

Well rework costs are deferred and amortized over the estimated period
between   reworks.   These   deferred  costs,   net   of   accumulated
amortization,  are $8,371 and $7,086 at  December 31, 1996  and  1995,
respectively, and are included in other assets.

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,
is  computed  on  the straight-line method over the  estimated  useful
lives,  between  10 and 30 years. Depreciation of furniture,  fixtures
and  equipment which are recorded at cost, is computed on the straight
line  method  over the estimated useful lives of the  related  assets,
which range from three to ten years.

The   Northern,  Falcon  Seaboard,  Partnership  Interest  and   Magma
acquisitions  by  the  Company 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 fair values at the date of the
acquisition and include the following:

Property  and equipment of Northern is depreciated using a  systematic
method, which approximates the straight line method over the estimated
useful lives of the related assets which range from 1-40 years.

Northern's  investment in Teesside Power Limited  is  being  amortized
over  the  remaining contract life of 11 years using a  straight  line
method.

Power sales agreements are amortized separately over (1) the remaining
portion  of  the scheduled price periods of the power sales agreements
and  (2)  for the Partnership Interest and Magma acquisitions  the  20
year  avoided  cost  periods of the power sales agreements  using  the
straight line method.

Mineral reserves are amortized on the units of production method.

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
Northern  and Magma acquisitions and a 25 year period for  the  Falcon
Seaboard acquisition, both using the straight line method.

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 implicit interest method.

Revenue Recognition

Revenues are recorded based upon service rendered and electricity  and
steam  delivered  to  the  end  of the month.  Royalties  earned  from
providing  geothermal  resources to power  plants  operated  by  other
geothermal power producers are recorded on an accrual basis.

Deferred Income Taxes

The  Company 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.  The Company intends to
repatriate earnings of foreign subsidiaries in the foreseeable future.
As  a result, deferred income taxes are provided for retained earnings
of  international subsidiaries and corporate joint ventures which  are
intended to be remitted.

Fair Values of Financial Instruments

The  following  methods and assumptions were used by  the  Company  in
estimating  fair values of financial instruments as discussed  herein.
Fair values have been estimated based on quoted market prices for debt
issues listed on exchanges. Fair values of financial instruments  that
are  not  actively  traded  are  based on  market  prices  of  similar
instruments and/or valuation techniques using market assumptions.

The  Company assumes that the carrying amount of short-term  financial
instruments approximates their fair value. For these purposes,  short-
term  is  defined as any item that matures, reprices, or represents  a
cash transaction between willing parties within six months or less  of
the measurement date.

Net Income per Common Share

Primary and fully diluted earnings per common share are based  on  the
weighted  average  number  of  common and dilutive  common  equivalent
shares outstanding during the period computed using the treasury stock
method.  Fully  diluted  earnings per common share  also  assumes  the
conversion at the beginning of the year of the convertible  debt  into
3,529  common shares at a conversion price of $18.375 per  share,  the
conversion   at   the  beginning  of  the  year  of  the   convertible
subordinated debentures into 4,444 common shares at a conversion price
of   $22.50  per  share,  the  convertible  preferred  securities   of
subsidiary  into 3,477 common shares at a conversion price  of  $29.89
per  share  and the exercise of all dilutive stock options outstanding
at  their  option  prices, with the option exercise proceeds  used  to
repurchase shares of common stock at the ending market price for fully
diluted earnings per share. For primary earnings per share, shares  of
common  stock are assumed to be repurchased at the average  price  for
the period.

Cash Equivalents

The  Company  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.

Impairment of Long-Lived Assets

On  January  1,  1996,  the  Company adopted  Statement  of  Financial
Accounting  Standards  No.  121  ("SFAS  121"),  "Accounting  for  the
Impairment  of  Long-Lived  Assets and for  Long-Lived  Assets  to  be
Disposed  Of"  which  requires  that  long-lived  assets  and  certain
identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset
may  not  be  recoverable.  The adoption of SFAS 121 did  not  have  a
material effect on the Company's financial statements.

Reclassification

Certain  amounts in the fiscal 1995 and 1994 financial statements  and
supporting  footnote disclosures have been reclassified to conform  to
the  fiscal  1996 presentation. Such reclassification did  not  impact
previously reported net income or retained earnings.




Use of Estimates

The  preparation of financial statements in conformity with  generally
accepted  accounting principles 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.

3.   Acquisitions

Northern

On  December  24, 1996, CE Electric, which is 70% owned indirectly  by
the  Company  and  30%  owned  indirectly by  PKS,  acquired  majority
ownership  of  the  outstanding ordinary  share  capital  of  Northern
pursuant  to the Tender Offer.   Through January 31, 1997, CE Electric
had  purchased  more  than 90% of Northern's ordinary  shares.   Under
United  Kingdom statutory procedures available to compulsorily acquire
shares  not  purchased  in the Tender Offer, CE  Electric  expects  to
acquire the remaining Northern ordinary shares by April 30, 1997.

As  of  December 31, 1996, the Company and PKS had contributed  to  CE
Electric  approximately  $410,000 and $176,000  respectively,  of  the
approximately  $1,300,000  required  to  acquire  all  of   Northern's
ordinary  and  preference shares in connection with the Tender  Offer.
The  Company  obtained  such  funds  from  cash  on  hand,  short-term
borrowings,  and borrowings of approximately $100,000 under  a  Credit
Agreement  entered into with Credit Suisse on October  28,  1996  (the
"CalEnergy  Credit  Facility").   The  remaining  funds  necessary  to
consummate the Tender Offer will be provided from a 560,000 ($958,888)
Term  Loan  and Revolving Facility Agreement, dated October  28,  1996
(the "U.K. Credit Facility").

The Northern acquisition has been accounted for as a purchase business
combination.  All identifiable assets acquired and liabilities assumed
were  assigned a portion of the cost of acquiring Northern,  equal  to
their  fair values at the date of the acquisition.  Minority  interest
is  recorded  at historical cost.   The total cost of the  acquisition
through December 31, 1996 was allocated as follows:

Cash                                     $     200,399
Properties, plants and equipment             1,101,860
Other assets                                   541,554
Northern project debt                         (447,119)
Accounts payable                              (213,710)
Accrued liabilities                           (606,525)
Minority interest                             (297,821)
Preferred securities                          (136,065)
Excess of cost over fair value of
 net assets acquired, net of
 deferred taxes of  $129,493                   267,648
                                            $  410,221

In  1993, Northern entered into a contract relating to the purchase of
400  MW  of capacity from a 15.4% owned related party, Teesside  Power
Limited  ("Teesside"),  for a period of 15 years  beginning  April  1,
1993.   The  contract sets escalating purchase prices at predetermined
levels.  Currently the escalating contract prices exceed those paid by
the Company to the electricity pool (the "Pool") which is operated  by
the  National Grid Group.  However, under current price cap regulation
expected to expire March 31, 1998 the Company is able to recover these
costs.   For  the  period  after  March  31,  1998,  the  Company  has
established  a  liability for the estimated loss as a result  of  this
contract.

Northern  utilizes contracts for differences ("CFDs") to mitigate  its
exposure to volatility in the prices of electricity purchased  through
the Pool.  Such contracts allow the Company to effectively convert the
majority  of  its  anticipated Pool purchases  from  market  to  fixed
prices.   As  of  December 31, 1996, CFDs were in  place  to  hedge  a
portion  of electricity purchases of approximately 55,000 GWh  through
the year 2008.

The  Labour  Party has asserted that if they are elected at  the  next
General Election, which must be held no later than May 22, 1997,  they
will  seek  to introduce a "windfall" assessment to be levied  on  the
privatized  utilities including Northern.  The Company has established
a  liability for such an assessment as part of its purchase accounting
reserves.

The preferred  securities reflect the fair value  of  the  outstanding
    preferred stock of Northern.

Falcon Seaboard

On  August  7,  1996 the Company completed the acquisition  of  Falcon
Seaboard  for  a  cash price of $229,500 including acquisition  costs.
Through  the  acquisition, the Company indirectly acquired significant
ownership   interests   in  three  operating  gas-fired   cogeneration
facilities  and  a  related  natural-gas pipeline.    The  plants  are
located  in  Texas,  Pennsylvania and New York and  total  520  MW  in
capacity.

The  Falcon Seaboard acquisition has been accounted for as a  purchase
business   combination.    All  identifiable   assets   acquired   and
liabilities  assumed were assigned a portion of the cost of  acquiring
Falcon  Seaboard,  equal  to their fair values  at  the  date  of  the
acquisition.  The  total  cost  of the acquisition  was  allocated  as
follows:

Cash                                       $   22,923
Operating facilities                          141,176
Power sales agreements                         23,282
Equity investments                            144,656
Other assets                                   27,229
Project loans                                (119,478)
Other liabilities                             (15,527)
Excess of cost over fair value of
 net assets acquired, net of
 deferred taxes of $93,279                      5,239
                                           $  229,500

Edison Mission Energy's Partnership Interest

On  April  17,  1996 the Company completed the acquisition  of  Edison
Mission  Energy's  Partnership Interests in four geothermal  operating
facilities  in  California  for  a  cash  purchase  price  of  $71,000
including  acquisition costs.   The four projects, Vulcan,  Hoch  (Del
Ranch),  Leathers  and Elmore, are located in the Imperial  Valley  of
California.  Prior to this transaction, the Company was a 50% owner of
these facilities.

The  Partnership  Interest acquisition has been  accounted  for  as  a
purchase  business combination.  All identifiable assets acquired  and
liabilities  assumed were assigned a portion of the cost of  acquiring
the  Partnership Interest, equal to their fair values at the  date  of
the  acquisition.  The total cost of the acquisition was allocated  as
follows:

Cash                                           $  12,956
Restricted cash                                   13,226
Power sales agreements                            78,036
Other assets                                      20,254
Project loans                                    (48,161)
Liabilities                                       (5,311)
                                                $ 71,000

Magma Power Company

On  January  10, 1995, the Company acquired approximately 51%  of  the
outstanding shares of common stock of Magma (the "Magma Common Stock")
through  a  cash tender offer (the "Magma Tender Offer") and completed
the   Magma  acquisition  on  February  24,  1995  by  acquiring   the
approximately 49% of the outstanding shares of Magma Common Stock  not
owned by the Company through a merger.

The  Magma  acquisition has been accounted for as a purchase  business
combination.  All identifiable assets acquired and liabilities assumed
were assigned a portion of the cost of acquiring Magma, equal to their
fair  values  at the date of the acquisition. The total  cost  of  the
acquisition was allocated as follows:

Cash                                              $   62,116
Operating facilities and project cash                291,365
Power sales agreements                               173,730
Mineral reserves                                     160,768
Construction in progress                              93,174
Process license and other                             39,304
Excess of cost over fair value of net assets
 acquired, net of deferred taxes of $168,914         137,455

                                                    $957,912

Unaudited pro forma combined revenue, net income and primary  earnings
per  share of the Company, Northern, Falcon  Seaboard, the Partnership
Interest  and Magma for the twelve months ended December 31, 1996  and
1995,  as  if the acquisitions had occurred at the beginning  of  1995
after  giving effect to certain pro forma adjustments related  to  the
acquisition   were   $2,162,381,  $64,811  and  $1.12,   compared   to
$2,006,496, $53,887 and $1.02, respectively.

4.Properties, Plants, Contracts and Equipment

Properties, plants, contracts and equipment comprise the following  at
December 31:

                                                   1996     1995


Operating project costs:
Power plants and distribution system           $2,361,089  $623,778
Wells and resource development                    391,929   329,414
Power sales agreements                            232,228   188,415
Licenses, equipment, wells and resource
    development in progress                        66,207    58,517

Total operating facilities                      3,051,453  1,200,124
Less accumulated depreciation and amortization   (271,216)  (164,184)

Net operating facilities                        2,780,237  1,035,940

Mineral reserves                                  207,424    212,929
Construction in progress:
  Malitbog                                        152,411    146,735
  Mahanagdong                                     123,567     76,560
  Other international development                  84,944     11,418
  Upper Mahiao                                        ---    188,904
  Salton Sea IV                                       ---    108,769

Total                                          $3,348,583 $1,781,255

Coso Project Operating Facilities

The   Coso   Project  operating  facilities  comprise  the   Company's
proportionate share of the assets of three of its Coso Joint Ventures:
Coso Finance Partners ("Navy I Joint Venture"), Coso Energy Developers
("BLM  Joint  Venture"),  and Coso Power Developers  ("Navy  II  Joint
Venture").   The Navy I power plant is located on land  owned  by  and
leased  from the U.S. Navy to December 2009, with a 10 year  extension
at  the  option of the Navy. Under terms of the Navy I Joint  Venture,
profits  and losses were allocated approximately 49% before payout  of
Units 2 and 3 and approximately 46.4% thereafter to the Company. As of
December  31, 1994, payout had been reached on Units 2 and  3  of  the
Navy I Joint Venture.  The BLM power plant is situated on lands leased
from  the  U.S.  Bureau of Land Management under  a  geothermal  lease
agreement  that  extends  until October 31, 2035.  The  lease  may  be
extended to 2075 at the option of the BLM. Under the terms of the  BLM
Joint  Venture  agreement, the Company's share of profits  and  losses
before  and  after payout is approximately 45% and 48%,  respectively.
The BLM Joint Venture reached payout in June 1994.  Under terms of the
Navy  II  Joint Venture, all profits, losses and capital contributions
for Navy II are divided equally by the two partners.

Imperial Valley Project Operating Facilities

The  Company currently operates eight geothermal power plants  in  the
Imperial Valley in California. Four of these plants were developed  by
Magma.  The  Partnership Project consists of  the  Vulcan,  Hoch  (Del
Ranch),  Elmore, and Leathers Partnerships. The remaining four  plants
which  comprise  the  Salton  Sea Project are  indirect  wholly  owned
subsidiaries of the Company, three of which were purchased by Magma on
March  31,  1993 from Union Oil Company of California and  the  fourth
which  was  completed  by the Company in June 1996.  These  geothermal
power  plants consist of the Salton Sea I, Salton Sea II,  Salton  Sea
III  and the Salton Sea IV. The Partnership Project and the Salton Sea
Project  are collectively referred to as the Imperial Valley  Project.
The  Imperial Valley Project commencement dates and nominal capacities
are as follows:

Imperial Valley                  Commencement                Nominal
   Plants                            Date                    Capacity

  Vulcan                           February 10, 1986          34   MW
  Hoch (Del Ranch)                 January 2, 1989            38   MW
  Elmore                           January 1, 1989            38   MW
  Leathers                         January 1, 1990            38   MW
  Salton Sea I                     July 1, 1987               10   MW
  Salton Sea II                    April 5, 1990              20   MW
  Salton Sea III                   February 13, 1989          49.8 MW
  Salton Sea IV                    May 24, 1996               39.6 MW

Significant Customers and Contracts

All  of  the Company's sales of electricity from the Coso Project  and
Imperial  Valley  Project, which comprise approximately  77%  of  1996
electricity and steam revenues, are to Edison and are under  long-term
power purchase contracts.

The  Coso  Project  and the Partnership Project sell  all  electricity
generated  by  the respective plants pursuant to seven  long-term  SO4
Agreements  between  the  projects and Edison.  These  SO4  Agreements
provide  for  capacity payments, capacity bonus  payments  and  energy
payments. Edison makes fixed annual capacity payments to the  projects
and, to the extent that capacity factors exceed certain benchmarks, is
required  to make capacity bonus payments. The price for capacity  and
capacity  bonus payments is fixed for the life of the SO4  Agreements.
Energy  is sold at increasing scheduled rates for the first ten  years
after  firm  operation  and  thereafter at Edison's  Avoided  Cost  of
Energy.

The  scheduled energy price periods of the Coso Project SO4 Agreements
extend  until  at least August 1997, March 1999 and January  2000  for
each  of  the  units  operated  by  the  Navy  I,  BLM  and  Navy   II
Partnerships, respectively. The Company's share of the annual capacity
payments  is approximately $5,600 to $5,900 per annum for each  plant.
The  Company's  share  of bonus payments is approximately  $1,000  per
annum for each plant.

The  scheduled  energy  price periods of the Partnership  Project  SO4
Agreements extended until February 1996 for the Vulcan Partnership and
extend until December 1998, December 1998, and December 1999 for  each
of   the   Hoch   (Del  Ranch),  Elmore  and  Leathers   Partnerships,
respectively.  The annual capacity payments are approximately  $24,500
and  the bonus payments are approximately $4,400 in aggregate for  the
four plants.

Excluding Vulcan, which is receiving Edison's Avoided Cost of  Energy,
the  Company's  SO4 Agreements provide for energy rates  ranging  from
12.6 cents  per kWh in 1996 to 15.6 cents per kWh in 1999.  The weighted average
energy rate for all of the Company's SO4 Agreements was 11.7 cents per  kWh
in 1996.

Salton  Sea  I  sells  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 5.1 cents per kWh during  1996.
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 $1,100 per annum.

Salton  Sea II and Salton Sea III 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 the  first  ten
year period, which period expires in April 2000 and February 1999  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 will be 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 $3,300
and $9,700, respectively.

The  Salton Sea IV Project sells 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 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.

For the year ended December 31, 1996, Edison's average Avoided Cost of
Energy was 2.5 cents per kWh which is substantially below the contract
energy  prices earned for the year ended December 31, 1996.  Estimates
of Edison's future Avoided Cost of Energy vary substantially from year
to  year. The Company cannot predict the likely level of Avoided  Cost
of  Energy  prices  under  the SO4 Agreements  and  the  modified  SO4
Agreements  at  the expiration of the scheduled payment  periods.  The
revenues  generated  by  each  of the  projects  operating  under  SO4
Agreements  could  decline significantly after the expiration  of  the
respective scheduled payment periods.

The  Upper  Mahiao Project was deemed complete in June 1996 and  began
receiving  capacity  payments pursuant  to  the  Upper  Mahiao  Energy
Conversion  Agreement  ("ECA"), in  July  of  1996.   The  project  is
structured  as  a ten year BOOT, in which the Company's subsidiary  CE
Cebu  Geothermal Power Company, Inc. ("CE Cebu"), the project company,
is responsible for providing operations and maintenance during the ten
year  BOOT  period.   The electricity generated by  the  Upper  Mahiao
geothermal  power plant is sold to PNOC-Energy Development Corporation
("PNOC-EDC"),  which  is also responsible for supplying  the  facility
with the geothermal steam.  After the ten year cooperation period, and
the recovery by the Company of its capital investment plus incremental
return, the plant will be transferred to PNOC-EDC at no cost.

PNOC-EDC  is obligated to pay for electric capacity that is  nominated
each  year by CE Cebu, irrespective of whether PNOC-EDC is willing  or
able to accept delivery of such capacity.  PNOC-EDC pays to CE Cebu  a
fee (the "Capacity Fee") based on the plant capacity nominated to PNOC-
EDC   in  any  year  (which,  at  the  plant's  design  capacity,   is
approximately 95% of total contract revenues) and a fee  (the  "Energy
Fee")   based  on  the  electricity  actually  delivered  to  PNOC-EDC
(approximately  5%  of  total contract revenues).   The  Capacity  Fee
serves  to recover the capital costs of the project, to recover  fixed
operating costs and to cover return on investment.  The Energy Fee  is
designed to cover all variable operating and maintenance costs of  the
power  plant.  Payments under the Upper Mahiao ECA are denominated  in
U.S. Dollars, or computed in U.S. dollars and paid in Philippine pesos
at  the  then-current exchange rate, except for the Energy Fee,  which
will be used to pay Philippine peso-denominated expenses.  Significant
portions  of the Capacity Fee and Energy Fee are indexed to  U.S.  and
Philippine   inflation   rates,  respectively.    PNOC-EDC's   payment
requirements, and its other obligations under the Upper Mahiao ECA are
supported  by the Government of the Philippines through a  performance
undertaking.

Unit I of the Malitbog Project was deemed complete in July 1996.   The
Malitbog  Project  is  being built, owned  and  operated  by  VGPC,  a
Philippine  general partnership that is wholly owned,  indirectly,  by
the  Company.   VGPC is selling 100% of its capacity on  substantially
the same basis as described above for the Upper Mahiao Project to PNOC-
EDC,  which will in turn sell the power to the NPC. As with the  Upper
Mahiao project, the Malitbog project is structured as a ten year BOOT,
in which the Company will be responsible for implementing construction
of  the geothermal power plant and, as owner, for providing operations
and  maintenance  for  the ten year BOOT period.   After  a  ten  year
cooperation  period, and the recovery by the Company  of  its  capital
investment  plus incremental return, the plant will be transferred  to
PNOC-EDC at no cost.

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 1996 total 2.1 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 average 6.3 cents per  kWh  in  1996,
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  ("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  1996  are $2,930 per month and 2.86 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.

The   NorCon  Project  sells  electricity  to  Niagara  Mohawk   Power
Corporation  ("Niagara")  pursuant  to  a  25  year  negotiated  power
purchase  agreement  (the  "NorCon PPA")  which  provides  for  energy
payments  calculated  pursuant  to  an  adjusting  formula  based   on
Niagara's  ongoing  Tariff Avoided Cost and the  contractual  Long-Run
Avoided Cost.  The NorCon PPA term extends through December 2017.  The
Company  and Niagara are currently engaged in discussions regarding  a
potential restructuring or buyout and termination of the NorCon PPA.

The  Yuma Project sells electricity to 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  contract  term  extends
through May 2024.

Royalty Expense

Royalty expense comprises the following for the years ended:

                                1996      1995      1994

Navy I, Unit 1              $  1,620   $ 1,622    $1,641
Navy I, Units 2 and 3          3,512     3,394     3,174
BLM                            2,538     3,036     2,842
Navy II                        5,742     5,571     1,963
Partnership Project            6,702     6,820       ---
Salton Sea Project             3,526     3,578       ---
Desert Peak                       53       287       268
   Total                     $23,693   $24,308    $9,888

The  amount  of royalties paid by Navy I to the U.S. Navy  to  develop
geothermal  energy for Navy I, Unit 1 on the lands owned by  the  Navy
comprises (i) a fee payable during the term of the contract  based  on
the  difference  between the amounts paid by the Navy  to  Edison  for
specified quantities of electricity and the price as determined  under
the  contract (which currently approximates 73% of that  paid  by  the
Navy  to Edison), and (ii) $25,000 payable in December 2009, of  which
the  Company's  share is $11,600. The $25,000 payment  is  secured  by
funds  placed on deposit monthly, which funds, plus accrued  interest,
will  aggregate $25,000. The monthly deposit is currently $50.  As  of
December 31, 1996, the balance of funds deposited approximated $5,311,
which amount is included in restricted cash.

Units  2  and  3 of Navy I and the Navy II power plants  are  on  Navy
lands,  for which the Navy receives a royalty based on electric  sales
revenue at the initial rate of 4% escalating to 22% by the end of  the
contract  in December 2019. The BLM is paid a royalty of  10%  of  the
value  of steam produced by the geothermal resource supplying the  BLM
Plant.

The  Partnership Project pays royalties based on both energy  revenues
and  total  electricity revenues. Hoch (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 4.167% of energy revenues.

The  Salton Sea Project's weighted average royalty expense in 1996 was
approximately  5.2%.  The royalties are paid  to  numerous  recipients
based on varying percentages of electrical revenue or steam production
multiplied by published indices.

Nevada and Utah Properties

Roosevelt  Hot Springs. The Company operates and owns an approximately
70%  interest  in  a geothermal steam field which supplies  geothermal
steam  to a 23 net MW power plant owned by Utah Power & Light  Company
("UP&L") located on the Roosevelt Hot Springs property under a 30-year
steam sales contract.

The  Company  obtained  approximately $20,317 cash  under  a  pre-sale
agreement  with  UP&L  whereby UP&L paid  in  advance  for  the  steam
produced  by  the  steam field. The Company must make certain  penalty
payments  to UP&L if the steam produced does not meet certain quantity
and quality requirements.

Desert  Peak.  The Company is the owner and operator of  a  geothermal
plant at Desert Peak, Nevada that is currently selling electricity  to
Sierra Pacific Power Company ("Sierra") at Sierra's Avoided Cost.

Glass Mountain

Under  a  Bonneville  Power  Administration ("BPA")  geothermal  pilot
program,  the  Company  has been developing a  30  net  MW  geothermal
project  which was originally located in the Newberry Known Geothermal
Resource  Area  in Deschutes County, Oregon.  Pursuant  to  two  power
sales  contracts  executed  in September 1994,  an  affiliate  of  the
Company  agreed  to sell 20 MW to BPA and 10 MW to  Eugene  Water  and
Electric  Board ("EWEB") from the Project.  In addition, BPA and  EWEB
together  have  an option to purchase up to an additional  100  MW  of
production from the project under certain circumstances.  These  power
sales contracts provide that under certain circumstances the contracts
may be utilized at an alternative location.

Pursuant  to  its  resource  exploration  program,  the  Company   has
determined  that the geothermal resource at Newberry is not sufficient
to support the contracts and accordingly has determined to utilize the
contracts  at  its  leasehold position in Glass Mountain  (the  "Glass
Mountain Project") in Northern California, where it has two successful
production  wells.  The Company and BPA have agreed  to  relocate  the
project  to Glass Mountain.  Under the relocation agreement  BPA  will
purchase 30 MW from the project.  The movement of the project to  this
alternative  location  and BPA's purchase obligation  are  subject  to
obtaining a final environmental impact statement relating to  the  new
site location.  Discussions with EWEB are continuing.

The   Glass  Mountain  Project  is  currently  expected  to   commence
commercial  operation in 2000.  Completion of this project is  subject
to a number of significant uncertainties and cannot be assured.

5. Equity Investments

The  Company has a present indirect ownership of approximately 35%  in
the   Casecnan  Project,  a  combined  irrigation  and  150   net   MW
hydroelectric power generation project located on the island of  Luzon
in the Philippines.

The  Company acquired an approximate 47% economic interest in  Saranac
Power  Partners,  L.P.  and a 20% economic interest  in  NorCon  Power
Partners, L.P. as part of the Falcon Seaboard acquisition.

Summary financial information for these equity investments follows:

                                     Casecnan   Saranac  NorCon

As of and for the year ended December 31, 1996:

Assets                             $ 492,166  $ 325,174   $ 125,956
Liabilities                          380,737    213,326     121,223
Net income (loss)                    (11,207)    40,005         (53)

As of December 31, 1995:
Assets                              501,160        N/A       N/A
Liabilities                         378,524        N/A       N/A

6.                       Parent Company Debt

 Parent company debt comprises the following at December 31:
                                             1996          1995
Senior discount notes                   $   527,535     $ 477,355
Senior notes                                224,150           ---
Limited recourse senior secured notes*      200,000       200,000
CalEnergy credit facility                   100,000           ---
Revolving credit facility                    95,000           ---
Convertible subordinated debentures             ---       100,000
Convertible debt                                ---        64,850
                                        $ 1,146,685     $ 842,205

*The amount of recourse obligation to the parent was $0 at December 31, 1996.

Senior Discount Notes

In  March 1994, the Company issued $400,000 of 10 1/4% Senior Discount
Notes  which  accrete to an aggregate principal amount of $529,640  at
maturity in 2004.  The original issue discount (the difference between
$400,000  and  $529,640)  will be amortized from  issue  date  through
January  15, 1997, during which time no cash interest will be paid  on
the Senior Discount Notes.  Commencing July 15, 1997, cash interest on
the  Senior Discount Notes will be payable semiannually on January  15
and July 15 of each year.  The Senior Discount Notes are redeemable at
any  time on or after January 15, 1999 initially at a redemption price
of  105.125%  declining  to  100% on January  15,  2002  plus  accrued
interest  to  the date of redemption.  The Senior Discount  Notes  are
unsecured senior obligations of the Company.

The  Senior  Discount Notes prohibit payment of cash dividends  unless
certain  financial  ratios are met and unless  the  dividends  do  not
exceed  50%  of  the Company's accumulated adjusted  consolidated  net
income  as defined, subsequent to April 1, 1994, plus the proceeds  of
any stock issuance.

Senior Notes

On  September  20,  1996  the  Company completed  a  private  sale  to
institutional investors of $225,000 aggregate principal  amount  of  9
1/2%  Senior  Notes due 2006.  Interest on the Senior  Notes  will  be
payable  semiannually on March 15 and September 15 of each year.   The
Senior Notes are redeemable at any time on or after September 15, 2001
initially  at  a  redemption price of 104.75%  declining  to  100%  on
September  15,  2004 plus accrued interest to the date of  redemption.
The Senior Notes are unsecured senior obligations of the Company.

Limited Recourse Senior Secured Notes

On  July  21,  1995  the Company issued $200,000  of  9  7/8%  Limited
Recourse Senior Secured Notes Due 2003 (the "Notes"). Interest on  the
Notes  is  payable on June 30 and December 30 of each year, commencing
December  1995. 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 Company's interest in a secured Magma
note and general assets of the Company equal to the Restricted Payment
Recourse  Amount, as defined in the Note Indenture ("Note Indenture"),
which was $0 at December 31, 1996.

At  any  time or from time to time on or prior to June 30,  1998,  the
Company  may,  at  its option, use all or a portion of  the  net  cash
proceeds  of  a  Company  equity offering  (as  defined  in  the  Note
Indenture)  and shall at any time use all of the net cash proceeds  of
any Magma equity offering (as defined in the Note Indenture) to redeem
up  to  an  aggregate  of 35% of the principal  amount  of  the  Notes
originally  issued  at a redemption price equal  to  109.875%  of  the
principal amount thereof plus accrued interest to the redemption date.
On  or after June 30, 2000, the Notes are redeemable at the option  of
the  Company, in whole or in part, initially at a redemption price  of
104.9375%  declining  to 100% on June 30, 2002  and  thereafter,  plus
accrued interest to the date of redemption.

CalEnergy Credit Facility

On  October  28, 1996 the Company obtained a $100,000 credit  facility
(the  "CalEnergy  Credit Facility") of which  the  Company  has  drawn
$100,000  as  of  December 31,1996.  Borrowings  under  the  CalEnergy
Credit  Facility are unsecured and mature on October 28, 1997, subject
to prepayment by the Company at any time.  Subsequent to year end, the
Company repaid the entire balance of the CalEnergy Credit Facility.

Revolving Credit Facility

On  July  8, 1996 the Company obtained a $100,000 three year revolving
credit  facility.  The facility is unsecured and is available to  fund
general  operating  capital requirements and finance  future  business
opportunities.  The Company had drawn $95,000 as of December 31, 1996.
Subsequent to year end, the Company repaid the entire balance.


Convertible Subordinated Debentures

In  June of 1993, the Company issued $100,000 principal amount  of  5%
convertible subordinated debentures ("debentures") due July 31,  2000.
Substantially all of the debentures were converted into  4,443  common
shares  in September and October 1996 at a conversion price of  $22.50
per share.

Convertible Debt

On  November  19,  1991,  the  Company sold  one  thousand  shares  of
convertible preferred stock, Series C, at $50,000 per share to  Kiewit
Energy  Company  Inc. ("Kiewit"), a subsidiary of PKS,  in  a  private
placement.  Each share of the Series C preferred stock was convertible
at  any  time at $18.375 per common share into 2,721 shares of  common
stock  subject to customary adjustments.  The Series C preferred stock
had  a  dividend  rate of 8.125%, commencing March  15,  1992  through
conversion  date  or  December 15, 2003.  The  dividends,  which  were
cumulative,  were  payable quarterly in convertible  preferred  stock,
Series  C,  through March 15, 1995 and in cash on subsequent  dividend
dates.

Pursuant  to  the  terms  of the Securities  Purchase  Agreement,  the
Company  exercised its rights to exchange the preferred stock,  Series
C,  on  March  15, 1995 for $64,850 principal amount 9.5%  convertible
subordinated  debenture  of  the Company  due  2003,  with   the  same
conversion  features of the preferred stock, Series C.   On  September
20,  1996,  the  Company converted the $64,850  convertible  debt  and
associated  accrued interest into 3,620 common shares at a  conversion
price of $18.375 per share.

The  annual  repayments  of  the parent company  debt  for  the  years
beginning January 1, 1997 are as follows:

                         Senior                 Limited
                        Discount    Senior      Recourse
                         Notes       Notes      Notes *

  1997 - 2001          $    ---    $    ---    $    ---
  Thereafter            529,640     225,000     200,000
                       $529,640    $225,000    $200,000

*The amount of recourse obligation to the parent was $0 at December 31, 1996.

7.  Subsidiary and Project Debt:

Project  loans  held  by  subsidiaries and  projects  of  the  Company
comprise the following at December 31:
                                             1996       1995

Salton Sea Notes and Bonds              $   538,982$   452,088
Northern eurobonds                          439,192        ---
Coso Funding Corp. project loans            148,346    203,226
U.K. Credit Facility                        128,423        ---
Power Resources project debt                114,571        ---
Construction loans                          377,454    211,198
Other                                         7,927     54,707
                                       $  1,754,895 $  921,219

Pursuant to separate project financing agreements, substantially all
the assets of the Company are pledged or encumbered to support or
otherwise provide the security for the project or subsidiary debt.

Salton Sea Notes and Bonds

On  June  20, 1996 and July 25, 1995, the Company through  its  wholly
owned   subsidiary,   Salton   Sea   Funding   Corporation   ("Funding
Corporation"), completed sales to institutional investors of  $135,000
and  $475,000, respectively, of Salton Sea Notes and Bonds (the "Notes
and  Bonds").  The Salton Sea Notes and Bonds are nonrecourse  to  the
Company.  The  Funding  Corporation debt securities  were  offered  as
follows:
              Senior Secured Series       Due          Rate      Amount
July 25, 1995           A Notes       May 30, 2000     6.69%    $232,750
July 25, 1995           B Bonds       May 30, 2005     7.37%     133,000
July 25, 1995           C Bonds       May 30, 2010     7.84%     109,250
June 20, 1996           D Notes       May 30, 2000     7.02%      70,000
June 20, 1996           E Bonds       May 30, 2011     8.30%      65,000

The  Salton  Sea  Notes and Bonds are secured by  the  Company's  four
existing  Salton Sea plants as well as an assignment of the  right  to
receive  various  royalties payable to Magma in  connection  with  its
Imperial  Valley  properties and distributions  from  the  Partnership
Project.

Each of the Company's direct or indirect subsidiaries is organized  as
a  legal  entity  separate and apart from the Company  and  its  other
subsidiaries.   It should not be assumed that any asset  of  any  such
subsidiary will be available to satisfy the obligations of the Company
or  any  of  its  other  such 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
of  such  parties, be advanced, loaned, paid as dividends or otherwise
distributed  or  contributed  to the Company  or  affiliates  thereof.
Substantially  all  of  the  assets of each  subsidiary  listed  below
(except   Vulcan/BN  Geothermal  Power  Company  and   certain   other
subsidiaries  involved  in  project financing  activities)  have  been
encumbered  to  secure  obligations owed  to  the  creditors  of  such
subsidiary:

Fish Lake Power Company
Salton Sea Brine Processing L.P.
Salton Sea Power Generation L.P.
Vulcan Power Company
CalEnergy Operating Company
Salton Sea Funding Corporation
Salton Sea Power Company
Salton Sea Royalty Company
Vulcan/BN Geothermal Power Company
Del Ranch, L.P.
Elmore, L.P.
Leathers, L.P.

Pursuant  to the Depository Agreement, Funding Corporation established
a  debt service reserve fund in the form of a letter of credit in  the
amount of $70,430 from which scheduled interest and principal payments
can be made.

Northern Eurobonds

The  Northern debt includes a 55,000 ($94,177) debenture due in  1999,
which  bears a fixed interest rate of 12.661%.  The debt also includes
bearer bonds repayable in 100,000 ($171,230) amounts in 2005 and 2020,
bearing fixed interest rates of 8.625% and 8.875%, respectively.

The balance at December 31, 1996 consists of the following:

              Debenture due 1999                       $  99,924
              Bearer bonds due 2005                      171,130
              Bearer bonds due 2020                      168,138
                                                       $ 439,192
Coso Funding Corp. Project Loans

The  Coso  Funding Corp. project loans are from Coso Funding Corp.,  a
single-purpose corporation formed to issue notes for its  own  account
and  act  as an agent on behalf of the Coso Project.  On December  16,
1992,  pursuant  to separate credit agreements executed  between  Coso
Funding  Corp.  and  each Coso Joint Venture, the proceeds  from  Coso
Funding  Corp.'s note offering were loaned to the Coso  Project.   The
proceeds of $560,245 were used by the Coso Project to (i) purchase and
retire   project  finance  debt  comprised  of  the  term  loans   and
construction  loans in the amount of $424,500, (ii)  fund  contingency
funds  in the amount of $68,400, (iii) fund debt service reserve funds
in  the  amount  of  $40,000,  and (iv)  finance  $27,345  of  capital
expenditures  and transaction costs.  The contingency  fund  and  debt
service reserve fund were required by the project loan agreements.

The  contingency fund represented the approximate maximum  amount,  if
any,  which could theoretically have been payable by the Coso  Project
to  third  parties to discharge all liens of record and other contract
claims  encumbering  the Coso Project's plants  at  the  time  of  the
project  loans.   The  contingency fund was established  in  order  to
obtain  investment-grade ratings to facilitate the offer and  sale  of
the  notes  by  Coso  Funding Corp., and such  establishment  did  not
reflect the Coso Project's view as to the merits or likely disposition
of  such litigation or other contingencies.  On June 9, 1993, MPE  and
the  Mission Power Group, subsidiaries of Edison Corp., and  the  Coso
Project  reached  a  final  settlement of  all  of  their  outstanding
disputes  and claims relating to the construction of the Coso Project.
As  a  result  of the various payments and releases involved  in  such
settlement, the Coso Project agreed to make a net payment of   $20,000
to MPE from the cash reserves of the Coso Project contingency fund and
MPE agreed to release its mechanics' liens on the Coso Project.  After
making  the $20,000 payment, the remaining balance of the Coso Project
contingency fund (approximately $49,300) was used to increase the Coso
Project  debt reserve fund from approximately $43,000 to  its  maximum
fully-funded requirement of $67,900.  The remaining $24,400 balance of
contingency  fund  was  retained within the Coso  Project  for  future
capital  expenditures  and  for Coso Project  debt  service  payments.
Since  the  Coso  Project  debt service reserve  is  fully  funded  in
advance,  Coso Project cash flows otherwise intended to fund the  Coso
Project  debt service reserve fund, subject to satisfaction of certain
covenants  and  conditions  contained  in  the  Coso  Joint  Ventures'
refinancing  documents,  may  be available  for  distribution  to  the
Company in its proportionate share.

The  Coso  Funding  Corp. project loans are collateralized  by,  among
other  things,  the  power plants, geothermal resource,  debt  service
reserve  funds,  contingency  funds,  pledge  of  contracts,  and   an
assignment  of all such Coso Project's revenues which will be  applied
against  the  payment  of  obligations of  each  Coso  Joint  Venture,
including  the project loans.  Each Coso Joint Venture's  assets  will
secure only its own project loan, and will not be cross-collateralized
with   assets   pledged  under  other  Coso  Joint  Venture's   credit
agreements.  The project loans are nonrecourse to any partner  in  the
Coso  Joint Ventures and the Coso Funding Corp. shall solely  look  to
such  Coso  Joint  Venture's pledged assets for satisfaction  of  such
project  loans.   However, the loans are cross-collateralized  by  the
available  cash  flow  of each Coso Joint Venture.   Each  Coso  Joint
Venture after satisfying a series of its own obligations has agreed to
advance support loans (to the extent of available cash flow and, under
certain  conditions,  its debt service reserve  funds)  in  the  event
revenues  from the supporting Coso Joint Ventures are insufficient  to
meet scheduled principal and interest on their separate project loans.

The  Coso Funding Corp. project loans carry a fixed interest rate with
weighted  average interest rates of 8.46% and 8.29%  at  December  31,
1996  and  1995,  respectively.  The loans have  scheduled  repayments
through December 2001.

U.K. Credit Facility

On  October  28,  1996 CE Holdings obtained a 560,000 ($958,888)  five
year  term  loan  and  revolving credit  facility  (the  "U.K.  Credit
Facility").   The  Company has not guaranteed,  nor  is  it  otherwise
subject  to  recourse  for, amounts borrowed  under  the  U.K.  Credit
Facility.  The agreement places restrictions on distributions from  CE
Electric to any of its shareholders based on certain financial ratios.
As of December 31, 1996, CE Holdings had drawn 75,000 ($128,423) under
the agreement.

Power Resources Project Financing Debt

Power  Resources,  an  indirect wholly-owned subsidiary,  has  project
financing  debt consisting of a term loan payable to a  consortium  of
banks  with interest and principal due quarterly through October 2003.
The  debt  carries fixed interest rates of 10.385% and  10.625%.   The
loan is collateralized by all of the assets of Power Resources.

The  annual  repayments of the subsidiary and project debt,  excluding
construction  loans,  for  the years beginning  January  1,  1997  and
thereafter are as follows:

                   Salton Sea           Coso
                   Notes and           Funding  UK Credit   Power
                     Bonds   Northern    Corp.  Facility  Resources     Other
            1997  $  90,228  $   ---  $ 41,729  $    ---  $ 11,228     $  873
            1998    106,938      ---    38,912       ---    12,805      1,678
            1999     57,836   99,924    31,717       ---    14,268      1,421
            2000     25,072      ---     4,080       ---    16,087      1,181
            2001     22,376      ---    31,908   128,423    18,119        959
Thereafter          236,532  339,268       ---       ---    42,064      1,815

                   $538,982 $439,192  $148,346  $128,423  $114,571     $7,927

Construction Loans

The Company's share of project construction loans comprise the
following at December 31:

                           1996        1995
Upper Mahiao             $150,628    $134,619
Malitbog                  137,881      36,863
Mahanagdong                76,503      39,716
Dieng Unit I               12,442         ---
                         $377,454    $211,198

The  construction loans are scheduled to be replaced by  term  project
financing   upon  completion  of  construction  and  commencement   of
commercial operations.


Upper Mahiao Construction Loan

Draws  on the construction loan for the Upper Mahiao geothermal  power
project  at  December  31,  1996 totaled $150,628.   A  consortium  of
international banks provided the construction financing with  interest
rates at LIBOR or "Prime" with interest payments due every quarter and
at LIBOR maturity.  The weighted average interest rate at December 31,
1996  and  1995  is approximately 8.01% and 8.31%, respectively.   The
Export-Import  Bank of the U.S. ("Ex-Im Bank") is providing  political
risk  insurance  to  commercial banks on the construction  loan.   The
construction loan is expected to be converted to a term loan  promptly
after  NPC  completes the full capacity transmission  line,  which  is
currently  expected in early 1997.  The largest portion  of  the  term
loan  for  the project will also be provided by Ex-Im Bank.  The  term
financing  for the Ex-Im Bank loan will be for a ten year  term  at  a
fixed interest rate of 5.95%.

Malitbog Construction Loan

Draws  on  the  construction  loan for the Malitbog  geothermal  power
project at December 31, 1996 totaled $137,881. Credit Suisse and  OPIC
have  provided the construction and term loan facilities.   The  eight
year  project term loan facilities will be at variable interest  rates
(weighted  average of 8.15% and 8.42% at December 31, 1996  and  1995,
respectively).   The international bank portion of the  debt  will  be
insured  by  the  Overseas  Private  Investment  Corporation  ("OPIC")
against  political  risks  and the Company's  equity  contribution  to
Visayas Geothermal Power Company ("VGPC") is covered by political risk
insurance from the Multilateral Investment Guarantee Agency and OPIC.

Mahanagdong Construction Loan

The  Company's  share  of  draws  on the  construction  loan  for  the
Mahanagdong  geothermal  power project at December  31,  1996  totaled
$76,503.   The construction debt financing is provided by OPIC  and  a
consortium  of  international banks.  The construction  loan  interest
rates are at LIBOR or "Prime" with interest payments due quarterly and
at LIBOR maturity.  The weighted average interest rate at December 31,
1996 and 1995 is approximately 8.05% and 8.02% respectively. Political
risk  insurance  from Ex-Im Bank has been obtained for the  commercial
lenders.   Ten  year  project  term debt  financing  of  approximately
$120,000  will be provided by Ex-Im Bank (which will replace the  bank
construction debt) and by OPIC.  The majority of the term financing is
expected to be provided by the Ex-Im Bank at a fixed interest rate  of
6.92%.

Dieng Construction Loan

On  October 4, 1996 the Company closed the $120,000 project  financing
for  the  Dieng  Unit  I  55  net  MW geothermal  project  located  in
Indonesia.   The  loan  carries  a variable  interest  rate  (weighted
average of 7.19% at December 31, 1996) and has scheduled project  term
repayments  through 2002.  Dieng Unit I is under construction  and  is
currently  expected to begin commercial operation by late  1997.   The
Company has drawn $12,442 as of December 31, 1996.

8. Income Taxes

Provision  for income taxes is comprised of the following at  December
31:
                                             1996       1995     1994

Currently payable:
State                                    $ 7,520     $ 5,510    $1,970
Federal                                   19,873      11,138     5,829
Foreign                                    2,176         ---       ---
                                          29,569      16,648     7,799
Deferred:
State                                      1,619         921     1,017
Federal                                    9,209      13,062     7,241
Foreign                                    1,424         ---       ---
                                          12,252      13,983     8,258
Total after benefit of
 extraordinary item                       41,821      30,631    16,057
Tax benefit attributable to
 extraordinary item                          ---         ---       945
Total before benefit of 
 extraordinary item                      $41,821     $30,631   $17,002

A  reconciliation of the federal statutory tax rate to  the  effective
tax  rate  applicable  to  income before provision  for  income  taxes
follows:
                                    1996     1995      1994

Federal statutory rate             35.00%   35.00%    35.00%
Percentage depletion in excess
 of cost depletion                 (6.12)   (7.38)    (6.85)
Investment and energy tax credits  (8.34)   (1.80)    (3.04)
State taxes, net of federal
 tax effect                         4.38     4.09      4.48
Goodwill amortization               2.51     2.53       ---
Non-deductible expense               .84     1.10       ---
Lease investment                     ---    (2.18)      ---
Tax effect of foreign income        2.54      ---       ---
Other                                .01      .20       .86
                                   30.82%   31.56%    30.45%

Deferred tax liabilities (assets) are comprised of the following at
December 31:
                                            1996           1995
Depreciation and amortization, net        $725,366       $349,079
Pensions                                    22,883            ---
Other                                        6,119          4,043

                                           754,368        353,122

Deferred contract costs                  (128,745)            ---
Deferred income                            (9,298)         (7,709)
Loss carryforwards                            ---          (3,050)
Energy and investment tax credits         (55,931)        (52,857)
Advance corporation tax                   (20,205)            ---
Alternative minimum tax credits           (50,819)        (52,480)
Jr. SO4 royalty receivable                 (5,865)         (5,865)
Accruals not currently deductible
 for tax purposes                         (13,372)            ---
Other                                        (934)         (4,641)

                                         (285,169)       (126,602)

Net deferred taxes                       $469,199        $226,520

The  Company  has unused investment and geothermal energy  tax  credit
carryforwards of approximately $55,931 expiring between 2002 and 2011.
The  Company also has approximately $50,819 of alternative minimum tax
credit  and  11,800  ($20,205)  of  surplus  advance  corporation  tax
carryforwards which have no expiration date.

9.    Company-Obligated  Mandatorily Redeemable Convertible  Preferred
Securities of Subsidiary Trust Holding Solely Convertible Debentures

On  April 12, 1996 CalEnergy Capital Trust, a special purpose Delaware
business  trust organized by the Company  (the "Trust"),  pursuant  to
the  Amended  and  Restated Declaration of Trust  (the  "Declaration")
dated as of April 4, 1996, completed a private placement (with certain
shelf  registration  rights)  of  $100,000  of  convertible  preferred
securities ("TIDES"). In addition, an option to purchase an additional
78.6  TIDES,  or  $3,930, was exercised by the initial  purchasers  to
cover over-allotments.

The  Trust  has  issued  2,078.6 of 6 1/4% TIDES  with  a  liquidation
preference of fifty dollars each.  The Company owns all of the  common
securities  of  the  Trust.   The  TIDES  and  the  common  securities
represent undivided beneficial ownership interests in the Trust.   The
assets of the Trust consist solely of the Company's 6 1/4% Convertible
Junior  Subordinated  Debentures due 2016 in an outstanding  aggregate
principal amount of $103,930 ("Junior Debentures") issued pursuant  to
an  indenture  dated as of April 1, 1996.  The indenture  includes  an
agreement  by the Company to pay expenses and obligations incurred  by
the Trust.  Each TIDES will be convertible at the option of the holder
thereof  at  any  time  into 1.6728 shares of CalEnergy  Common  Stock
(equivalent to a conversion price of $29.89 per share of the Company's
Common Stock), subject to customary anti-dilution adjustments.

Until  converted into the Company's Common Stock, the TIDES will  have
no voting rights with respect to the Company and, except under certain
limited circumstances, will have no voting rights with respect to  the
Trust.  Distributions  on  the  TIDES  (and  Junior  Debentures)   are
cumulative,  accrue from the date of initial issuance and are  payable
quarterly in arrears, commencing June 15, 1996.  The Junior Debentures
are subordinated in right of payment to all senior indebtedness of the
Company  and  the Junior Debentures are subject to certain  covenants,
events  of  default and optional and mandatory redemption  provisions,
all as described in the Junior Debenture Indenture.

Pursuant  to a Preferred Securities Guarantee Agreement, dated  as  of
April  10, 1996 (the "Guarantee"), between the Company and a preferred
guarantee  trustee, the Company has agreed irrevocably to pay  to  the
holders  of  the  TIDES,  to the extent that  the  Trustee  has  funds
available  to make such payments, quarterly distributions,  redemption
payments  and liquidation payments on the TIDES.  Considered together,
the  undertakings  contained  in the Declaration,  Junior  Debentures,
Indenture  and Guarantee constitute a full and unconditional guarantee
by the Company of the Trust's obligations under the TIDES.

10.Preferred Stock

On  December  1,  1988  the  Company distributed  a  dividend  of  one
preferred share purchase right ("right") for each outstanding share of
common  stock. The rights are not exercisable until ten days  after  a
person  or  group  acquires or has the right  to  acquire,  beneficial
ownership of 20% or more of the Company's common stock or announces  a
tender  or  exchange  offer for 30% or more of  the  Company's  common
stock. Each right entitles the holder to purchase one one-hundredth of
a  share of Series A junior preferred stock for $52. The rights may be
redeemed  by  the  Board of Directors up to ten days  after  an  event
triggering the distribution of certificates for the rights. The rights
plan  was  amended in February 1991 so that the agreement with  Kiewit
would  not trigger the exercise of the rights. The rights will expire,
unless  previously redeemed or exercised, on November  30,  1998.  The
rights  are automatically attached to, and trade with, each  share  of
common stock.

11.Stock Options and Restricted Stock

The Company has issued various stock options. As of December 31, 1996,
a total of 5,088 shares are reserved for stock options, of which 4,777
shares have been granted and remain outstanding at prices of $3.00  to
$30.38 per share.

The  Company  has stock option plans under which shares were  reserved
for  grant  as incentive or non-qualified stock options, as determined
by  the  Board of Directors. The plans allow options to be granted  at
85%  of  their  fair  market value at the date  of  grant.  Generally,
options are issued at 100% of fair market value at the date of  grant.
Options  granted under the 1996 Plan become exercisable over a  period
of  three  to five years and expire if not exercised within ten  years
from  the date of grant or, in some instances a lesser term. Prior  to
the 1996 Plan, the Company granted 256 options at fair market value at
date  of  grant  which had terms of ten years and were exercisable  at
date  of grant. In addition, the Company had issued approximately  138
options to consultants on terms similar to those issued under the 1996
Plan.  The  non-1996  plan options are primarily  options  granted  to
Kiewit (see Note 12).

The  Company  granted 500 shares of restricted common  stock  with  an
aggregate market value of $9,500 in exchange for the relinquishment of
500  stock options which were canceled by the Company. The shares have
all  rights  of  a  shareholder, subject to  certain  restrictions  on
transferability   and   risk  of  forfeiture.  Unearned   compensation
equivalent  to the market value of the shares at the date of  issuance
was  charged  to  Stockholders' equity. Such unearned compensation  is
being  amortized  over  the vesting period of which  125  shares  were
immediately  vested  and the remaining 375 shares vest  straight  line
over  approximately  five years. Accordingly,  $1,535  and  $2,494  of
unearned  compensation  was  charged  to  general  and  administrative
expense in 1996 and 1995, respectively.

Transactions in Stock Options

<TABLE>
<CAPTION>
Options Outstanding
                          Shares Available
                          for Grant Under               Option Price    Weighted Avg
                          1996 Option Plan     Shares     Per Shares    Option Price   Total
<S>                        <C>               <C>       <C>                 <C>        <C>
Balance December 31, 1993      439             8,514    $3.00 - $19.00     $12.32     $104,931

Options granted               (954)            1,243    12.00 - 17.25       15.49       19,260
Options terminated              15               (15)    3.00 - 15.94       13.67         (205)
Options exercised              ---              (141)    3.00 - 15.94        5.03         (709)
Additional shares reserved
 under 1996 Option Plan        586               ---         ---              ---          ---
Balance December 31, 1994       86             9,601     3.00 - 19.00       12.84      123,277

Options granted               (396)              396    15.81 - 19.00       18.15        7,188
Options terminated             571              (571)   14.88 - 19.00       18.69      (10,673)
Options exercised              ---              (135)    3.00 - 15.94        3.41         (460)
Balance December 31, 1995      261             9,291     3.00 - 19.00       12.84      119,332

Options granted             (1,157)           1,1572     5.06 - 30.38       28.17       32,590
Options terminated             468              (468)    3.00 - 19.00       17.96       (8,406)
Options exercised              ---            (5,203)    3.00 - 21.68       11.13      (57,931)
Additional shares reserved
 under 1996 Option Plan        739               ---          ---             ---          ---
Balance December 31, 1996      311             4,777    $3.00 - $30.38     $17.92      $85,585

Options exercisable at:
December 31, 1994                              7,897    $3.00 - $19.00     $11.87      $93,705
December 31, 1995                              8,229    $3.00 - $19.00     $12.26     $100,886
December 31, 1996                              3,071    $3.00 - $30.38     $14.25      $43,770

</TABLE>

The following table summarizes information about stock options outstanding
and exercisable as of December 31, 1996:

<TABLE>
<CAPTION>
 
                           Options Outstanding                       Options Exercisable
                                             Weighted       Weighted Average                        Weighted
Range of                    Number           Average           Remaining           Number            Average
Exercise Prices          Outstanding      Exercise Price    Contractual Life     Exercisable     Exercise Price
<S>                        <C>              <C>                 <C>                 <C>             <C>
$3.00   $11.99             1,251            $ 10.70             4 years             1,251           $ 10.70
12.00    20.99             2,369              16.72             7  years            1,786             16.50
21.00    30.38             1,157              28.16             9 years                34             29.25

                           4,777            $ 17.92             7 years             3,071           $ 14.25
</TABLE>

In October 1995 the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123 ("SFAS
123"), "Accounting for Stock-Based Compensation."  SFAS 123 defines a fair
value based method of accounting for stock-based employee compensation
plans and encourages all entities to adopt that method of accounting.
However, it also allows an entity to continue to measure compensation cost
for those plans using the intrinsic value based method of accounting.

The Company has decided to continue to apply the intrinsic value based
method  of accounting for its stock-based employee compensation plans.
If the fair value based method had been applied for 1996 and 1995, non-
cash  compensation expense and the effect on net income  available  to
common stockholders and earnings per share would have been immaterial.
The fair value for stock options was estimated using the Black-Scholes
option pricing model with assumptions for the risk-free interest  rate
of  6.00%,  expected volatility of 22%, expected life of approximately
4.5 years, and no expected dividends.  The weighted average fair value
of options granted during 1996 and 1995 was $8.62 per option and $5.72
per option, respectively.

12.Common Stock Sales & Related Options

Simultaneous with the acquisition of the remaining equity interest  of
Magma  on  February 24, 1995, the Company completed a public  offering
(the  "Offering")  of  18,170  shares of common  stock,  which  amount
included  a  direct sale by the Company to Kiewit of 1,500 shares  and
the  exercise of underwriter over-allotment options for 1,500  shares,
at  a  price  of  $17.00 per share. The Company received  proceeds  of
$300,388 from the Offering.

The  Company and Kiewit signed a Stock Purchase Agreement and  related
agreements,  dated as of February 18, 1991. Under  the  terms  of  the
agreements, Kiewit purchased 4,000 shares of common stock at $7.25 per
share  and received options to buy 3,000 shares at a price of  $9  per
share exercisable over three years and an additional 3,000 shares at a
price  of  $12  per  share  exercisable over five  years  (subject  to
customary adjustments).

In  May 1994, pursuant to a special antidilution provision of the 1991
Stock  Purchase Agreement between the Company and Kiewit, the  Company
increased Kiewit's existing option (granted in 1991) to purchase 3,000
shares  at  $12  per  share by an additional 289  shares  as  a  final
adjustment under such provisions.

In connection with this initial stock purchase, the Company and Kiewit
also  entered  into certain other agreements pursuant to which  Kiewit
and  its  affiliates  agreed  not to acquire  more  than  34%  of  the
outstanding common stock (the "Standstill Percentage") for a five-year
period  ending in February 1996 and Kiewit became entitled to nominate
at least three of the Company's directors.

On  June  19, 1991, the board approved a number of amendments  to  the
Stock  Purchase Agreement and the related agreements. As part of those
amendments, the Company extended the term of the $9 and $12 options to
seven  years;  modified certain of the other terms of  these  options;
granted  to Kiewit an option to acquire an additional 1,000 shares  of
the  common  stock  at  $11.625 per share for a  ten  year  term;  and
increased the Standstill Percentage from 34% to 49%.

On  November 19, 1991, the Board approved the issuance by the  Company
to  Kiewit  of  one  thousand shares of Series C preferred  stock  for
$50,000.  In connection with the sale of the Series C preferred  stock
to  Kiewit,  the  Standstill Agreement was amended  so  that  the  49%
Standstill  Percentage restriction would apply to voting stock  rather
than just common stock.

13.    Related Party Transactions

The  Company  charged and recognized a management fee and interest  on
advances  to  its Coso Joint Ventures, which aggregated  approximately
$5,731,  $6,075 and $5,569 in the years ended December 31, 1996,  1995
and  1994,  respectively. The Company has a note receivable  from  the
Coso  Joint  Ventures included in deferred charges  and  other  assets
which bears a fixed interest rate of 12.5% and is payable on or before
March 19, 2002.  The balance of the note is $11,578 and $14,254 as  of
December  31,  1996 and 1995, respectively.  This note is subordinated
to the senior project loan on the project.

The Mahanagdong Project is being constructed by a consortium (the "EPC
Consortium")  of Kiewit Construction Group, Inc. ("KCG")  and  the  CE
Holt  Company, a wholly owned subsidiary of the Company,  pursuant  to
fixed-price,  date-certain, turnkey supply and construction  contracts
(collectively,  the  "Mahanagdong EPC"). The obligations  of  the  EPC
Consortium  under the Mahanagdong EPC are supported by a  guaranty  of
KCG  at  an  aggregate  amount  equal  to  approximately  50%  of  the
Mahanagdong  EPC  price.  The Mahanagdong  EPC  provides  for  maximum
liability for liquidated damages of up to $100,500 and total liability
of  up to $201,000. KCG, a wholly owned subsidiary of PKS, is the lead
member  of  the  EPC Consortium, with an 80% interest.   KCG  performs
construction services for a wide range of public and private customers
in  the U.S. and internationally. CE Holt Company provides design  and
engineering services for the EPC Consortium, and holds a 20% interest.
The  Company  has provided a guaranty of CE Holt Company's obligations
under the Mahanagdong EPC Contract.

The  Company has in an international joint venture agreement with PKS,
a  stockholder of the Company, which the Company believes enhances its
capabilities in foreign power markets. The joint venture agreement  is
limited  to  international  power project development  activities  and
provides that, if both the Company and PKS agree to participate  in  a
project,  they will share all development costs equally.  The  Company
and  PKS each will provide 50% of the equity required for financing  a
project  developed by the joint venture and the Company  will  receive
from  the  project a development fee (generally 1% of project capital)
and  will  operate  and manage such project for a fee.  The  agreement
creates  a  joint development structure under which, on a  project  by
project  basis, the Company will be the development manager,  managing
partner and/or project operator, and equal equity participant with PKS
and  a  preferred participant in the construction consortium  and  PKS
will  be  an  equal  equity  participant  and  the  preferred  turnkey
construction contractor. The joint venture agreement may be terminated
by  either  party  on  15  days  written notice,  provided  that  such
termination cannot affect the pre-existing contractual obligations  of
either party.

14.            Extraordinary Item

In  conjunction with the Company's Senior Discount Notes  offering  in
1994,  the  12%  Senior  Notes  were defeased.  This  resulted  in  an
extraordinary  item  in the amount of $2,007,  after  the  income  tax
effect of $945. The extraordinary item represents the amount necessary
to  defease the interest payments and the unamortized portion  of  the
deferred financing costs on the 12% Senior Notes.

15.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  techniques. Therefore, the fair value estimates  presented
herein are not necessarily indicative of the amounts which the Company
could realize in a current transaction.

The  methods  and  assumptions used to  estimate  fair  value  are  as
follows:

Debt  instruments  -  The  fair value of all  debt  issues  listed  on
exchanges has been estimated based on the quoted market prices.

Interest  rate swap agreements - The fair value of interest rate  swap
agreements  is  estimated based on quotes from the  counter  party  to
these  instruments  and  represents the  estimated  amounts  that  the
Company would expect to receive or pay to terminate the agreements. It
is  the  Company's  intention to hold the  swap  agreements  to  their
intended maturity.

Other  financial  instruments - All other financial instruments  of  a
material nature fall into the definition of short-term and fair  value
is estimated as the carrying amount.

The  carrying  amounts  in  the table below  are  included  under  the
indicated captions in Notes 6 and 7 except for the interest rate swaps
which are discussed in Note 16.



                                         1996                  1995
                                             Estimated             Estimated
                                  Carrying   Fair        Carrying     Fair
                                   Value     Value         Value      Value
Financial assets:
Interest rate swap receivable     $    100   $    222    $     61     $  561
Financial liabilities:
Senior discount notes              527,535    556,971     477,355    503,158
Senior notes                       224,150    229,866         ---        ---
Limited recourse senior secured
 notes                             200,000    212,560     200,000    210,500
CalEnergy credit facility          100,000    100,000         ---        ---
Revolving line of credit            95,000     95,000         ---        ---
Convertible subordinated debentures    ---        ---     100,000    100,500
Salton Sea notes and bonds         538,982    531,807     452,088    459,629
Northern Electric eurobonds        439,192    445,830         ---        ---
Construction loans                 377,454    377,454     211,198    211,198
Coso Funding Corp. project loans   148,346    153,650     203,226    214,917
Power Resources Inc. project
 financing debt                    114,571    114,571         ---        ---
U.K. credit facility               128,423    128,423         ---        ---
Other                                7,927      7,927      54,707     54,707
Interest rate swap payable             ---        ---         226        672

16.  Interest Rate Swap Agreements

In  January  1993,  the  Coso Joint Ventures entered  into  five  year
deposit  interest rate swap agreements. The subject deposits represent
debt service reserves established in conjunction with refinancing  the
Coso  Joint  Ventures  loans through Coso Funding  Corp.  The  deposit
interest  rate swaps effectively convert interest earned on  the  debt
service  reserve  deposits from a variable rate to a  fixed  rate,  in
order to match the nature of the interest rate on the borrowings  used
to fund the debt service reserve deposits. The Company's proportion of
the  deposit  amount  of  $27,239  included  in  restricted  cash  and
investments  accretes  annually to a maximum amount  of  approximately
$29,300  in  1997. Under the agreements, which mature on  January  11,
1998, the Coso Joint Ventures make semi-annual payments to the counter
party  at  variable rates based on LIBOR, reset and  compounded  every
three months, and in return receive payments based on a fixed rate  of
6.34%.  The effective LIBOR rate ranged from 5.5313% to 5.9375% during
1996  and was 5.5313% at December 31, 1996. The counter party to these
agreements is a large multi-national financial institution.

17.  Regulatory Matters

Northern   is  subject  to  price  cap  regulation.   The  Office   of
Electricity  Regulation ("OFFER") controls the revenues  generated  by
Northern in its distribution and supply businesses by applying a price
control formula, P + RPI - X (where X is currently 3% for distribution
and  2%  for  supply), where P is the price level at the beginning  of
each  new  regulatory period, RPI is the change in  the  Retail  Price
Index and X is an adjustment factor determined by OFFER.

In  the  distribution business, the Distribution Price Control Formula
("DPCF")  is  usually  set  for a five-year period,  subject  to  more
frequent  adjustments as determined necessary by the Director  General
of   Electricity  Supply  (the  "Regulator").   At  each  review,  the
Regulator  can require a one-time price reduction.  An initial  review
by  the Regulator of allowable income in the distribution business led
to  a  reduction of the price level by 17% for Northern starting April
1,  1995,  followed by efficiency factors of X=2% for each year  until
March 2000.  On July 6, 1995, the Regulator announced the result of  a
further  distribution price review which was precipitated  by  certain
market events in the UK electric utility industry.  For Northern, such
announcement  meant  a  further real reduction  of  11%  in  allowable
distribution income for the twelve months from April 1, 1996, followed
by  an  efficiency  factor X=3% for each year until  March  31,  2000,
before an allowed increase for inflation.

In  the  supply  business,  which  is progressively  being  opened  to
competition,  price  regulation  still  applies  to  the  market   for
customers with demand of not more than 100kW.  The calculation of  the
maximum  supply  charge  is based on a Supply Price  Control  Formula,
similar to the DPCF and is set for a four-year period.  In 1993, OFFER
announced the supply franchise market (i.e., with demand of  not  more
than  100kW) income entitlement for the four-year period ending  March
1998.   A  relatively small efficiency factor of X=2% was  applied  to
Northern  and  is  being  offset by an allowance  for  both  unit  and
customer growth.  The nonfranchise markets (above 1 MW) were opened to
full  competition  during  privatization  in  1990;  the  nonfranchise
markets above 100kW were opened to full competition starting in  April
1994.

18.  Pension Commitments

Northern participates in the Electricity Supply Pension Scheme,  which
provides  pension and other related defined benefits, based  on  final
pensionable  pay,  to  substantially  all  employees  throughout   the
Electricity Supply Industry in the United Kingdom.

The  actuarial  computation  assumed an  interest  rate  of  7.75%  an
expected  return  on  plan  assets of 8.25%  and  annual  compensation
increases  of  5.75%  over the remaining service  lives  of  employees
covered  under the plan.  Amounts funded to the pension are  primarily
invested in equity and fixed income securities.

The   following  table  details  the  funded  status  and  the  amount
recognized  in  the balance sheet of the Company as of   December  31,
1996.

Actuarial present value of benefit obligations:
 Vested benefits                                 $ 797,932
 Nonvested benefits                                    ---
Accumulated benefit obligation                     797,932
Effect of future increase in compensation           58,218
Projected benefit obligation                       856,150
Fair value of plan assets                          919,163
Prepaid pension asset                            $  63,013

19.  Commitments and Contingencies

There were no material outstanding lawsuits as of December 31, 1996.

Casecnan
In  November  1995,  CE  Casecnan Water and Energy  Company,  Inc.,  a
Philippine  corporation  ("CE Casecnan"),  closed  the  financing  and
commenced  construction of the Casecnan Project, a combined irrigation
and  150  net MW hydroelectric power generation project (the "Casecnan
Project")  located in the central part of the island of Luzon  in  the
Republic  of  the  Philippines.   The Casecnan  Project  will  consist
generally  of  diversion structures in the Casecnan and  Denip  Rivers
that  will  divert water into a tunnel of approximately 23 kilometers.
The  tunnel will transfer the water from the Casecnan and Denip Rivers
in  the Pantabangan Reservoir for irrigation and hydroelectric use  in
the  Central Luzon area.  An underground powerhouse located at the end
of the water tunnel and before the Pantabangan Reservoir will house  a
power  plant  consisting of approximately 150 MW  of  newly  installed
rated  electrical capacity.  A tailrace tunnel of approximately  three
kilometers  will  deliver  water from the water  tunnel  and  the  new
powerhouse  to  the Pantabangan Reservoir, providing additional  water
for  irrigation and increasing the potential electrical generation  at
two downstream existing hydroelectric facilities of the National Power
Corporation of the Philippines ("NPC").

CE  Casecnan,  which is presently indirectly owned as to approximately
35%  of  its  equity by the Company and approximately 35% by  PKS,  is
developing  the  Casecnan  Project under  the  terms  of  the  Project
Agreement   between   CE   Casecnan  and   the   National   Irrigation
Administration ("NIA"). Under the Project Agreement, CE Casecnan  will
develop,  finance and construct the Casecnan Project over an estimated
four-year  construction period, and thereafter  own  and  operate  the
Casecnan Project for 20 years (the "Cooperation Period").  During  the
Cooperation Period, NIA is obligated to accept all deliveries of water
and  energy, and so long as the Casecnan Project is physically capable
of operating and delivering in accordance with agreed levels set forth
in  the  Project Agreement, NIA will pay CE Casecnan a guaranteed  fee
for  the  delivery of water and a guaranteed fee for the  delivery  of
electricity, regardless of the amount of water or electricity actually
delivered.   In  addition,  NIA will pay a  fee  for  all  electricity
delivered  in  excess of a threshold amount up to a specified  amount.
NIA  will sell the electric energy it purchases to NPC, although NIA's
obligations  to  CE  Casecnan  under the  Project  Agreement  are  not
dependent on NPC's purchase of the electricity from NIA.  All fees  to
be  paid  by  NIA  to  CE Casecnan are payable in U.S.  dollars.   The
guaranteed  fees for the delivery of water and energy are expected  to
provide approximately 70% of CE Casecnan's revenues.

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

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

The Casecnan Project is being constructed on a joint and several basis
by  Hanbo  Corporation and Hanbo Engineering & Construction  Co.  Ltd.
(formerly  known as You One Engineering & Construction Co., Ltd.,  and
herein  referred  to  as  "HECC"), both  of  which  are  South  Korean
corporations,   pursuant  to  a  fixed-price,  date-certain,   turnkey
construction  contract (the "Turnkey Construction  Contract").   Hanbo
Corporation  and  HECC  (sometimes collectively  referred  to  as  the
"Contractor")  are under common ownership control.  Hanbo  Corporation
is  an  international  construction  company.   HECC,  which  recently
emerged  from a court-administered receivership, is a contractor  with
over 25 years experience in tunnel construction, using both the drill-
and-blast and tunnel boring machine ("TBM") methods.

The  Contractor's obligations under the Turnkey Construction  Contract
are guaranteed by Hanbo Iron & Steel Company, Ltd. ("Hanbo Steel"),  a
large  South  Korean  steel  company.  In addition,  the  Contractor's
obligations under the Turnkey Construction Contract are secured by  an
unconditional,  irrevocable standby letter of credit issued  by  Korea
First  Bank ("KFB") in the approximate amount of $118,000.  The  total
cost  of  the  Casecnan Project, including development,  construction,
testing and startup, is estimated to be approximately $495,000.

In  late  January 1997, the Company was advised that Hanbo Corporation
and  Hanbo  Steel had each filed to seek court receivership protection
in  Korea.  At the present time, all of the construction work  on  the
Casecnan Project is being performed by the second contractor which  is
party  to  the  Turnkey Construction Contract, HECC.   Although  HECC,
Hanbo  Corporation and Hanbo Steel are under common ownership control,
HECC  has not filed for receivership protection and is believed to  be
solvent.  However, no assurances can be given that HECC will not  file
for  receivership due to the foregoing developments or  that  it  will
remain  solvent  and able to perform fully its obligations  under  the
Turnkey Construction Contract.

The  work  on  the  Casecnan  Project, which  commenced  in  1995,  is
presently  continuing on schedule and within the budget.  CE  Casecnan
is  presently reviewing its rights, obligations and potential remedies
in  respect of the recent developments regarding the co-Contractor and
the  guarantor and is presently unable to speculate as to the ultimate
effect of such developments on CE Casecnan.  However, CE Casecnan  has
recently  received  confirmation from HECC that it  intends  to  fully
perform  its  obligations under the Turnkey Construction Contract  and
complete  the  Casecnan  Project on schedule and  within  the  budget.
Additionally,  it  has been reported that the South Korean  government
has   informed  the  Philippine  government  that  the  South   Korean
government  will take appropriate actions to support HECC's completion
of the Casecnan Project.

KFB  has  recently reconfirmed to CE Casecnan that it will  honor  its
obligations under the Casecnan Project letter of credit and  also  has
stated  its  support  for the successful completion  of  the  Casecnan
Project.   However,  Moody's Investors Service has recently  issued  a
warning  for  a  possible ratings downgrade for  KFB  because  of  the
possible  impact  of the Hanbo Steel receivership on  the  substantial
loans  KFB  previously made to Hanbo Steel.  In a related development,
the  South  Korean  government has recently announced  that  it  would
provide some funding to assist Hanbo Steel's creditor banks (including
KFB) and its subcontractors.

CE  Casecnan financed a portion of the costs of  the Casecnan  Project
through the issuance of $125,000 of its 11.45% Senior Secured Series A
Notes  due  2005  and $171,500 of its 11.95% Senior Secured  Series  B
Notes  due 2010 pursuant to an indenture dated November 27,  1995,  as
amended  to date (the "Casecnan Indenture").  Although no default  has
occurred  under  the Casecnan Indenture as a result of  the  announced
receivership  of  Hanbo  Corporation, CE  Casecnan  will  continue  to
closely  monitor  the  Hanbo group and KFB  developments  and  project
construction status and develop appropriate contingency plans.

If  HECC were to materially fail to perform its obligations under  the
Turnkey  Construction Contract and if KFB were to fail  to  honor  its
obligations  under the Casecnan letter of credit, such  actions  could
have  a  material  adverse  effect on  the  Casecnan  Project  and  CE
Casecnan.   However, based on the information presently  available  to
it,  CE Casecnan does not presently expect that either such event will
occur.

Leases
Certain  retail facilities, buildings and equipment are  leased.   The
leases expire in periods ranging from one to 75 years and some provide
for renewal options.

At  December  31,  1996, the Company's future minimum rental  payments
with respect to non-cancellable operating leases were as follows:



 1997                                      $  9,137
 1998                                         8,897
 1999                                         5,337
 2000                                         5,279
 2001                                         5,098
 Thereafter                                  61,204
                                            $94,952


20.  Subsequent Event

On  February  26, 1997, CalEnergy Capital Trust II, a special  purpose
Delaware  business trust organized by the Company  (the  "Trust  II"),
pursuant  to  the  Amended  and Restated  Declaration  of  Trust  (the
"Declaration")  dated  as of February 26, 1997,  completed  a  private
placement  (with  certain shelf registration rights)  of  $150,000  of
trust  preferred  convertible  securities,  referred  to  as  Company-
obligated  mandatorily redeemable convertible preferred securities  of
subsidiary   trust  holding  solely  convertible  debentures   ("Trust
Securities").   In addition, an option to purchase an  additional  600
Trust  Securities, or $30,000, was exercised by the initial purchasers
to cover over-allotments.

The  Trust  has  issued  3,600  of 6  1/4%  Trust  Securities  with  a
liquidation preference of fifty dollars each.  The Company owns all of
the  common  securities of the Trust.  The Trust  Securities  and  the
common  securities represent undivided beneficial ownership  interests
in the Trust.  The assets of the Trust consist solely of the Company's
6  1/4%  Convertible Junior Subordinated Debentures  due  2012  in  an
outstanding   aggregate   principal  amount   of   $180,000   ("Junior
Debentures") issued pursuant to an indenture dated as of February  20,
1997.   The  indenture includes an agreement by  the  Company  to  pay
expenses  and obligations incurred by the Trust.  Each Trust  Security
will  be  convertible at the option of the holder thereof at any  time
into  1.1655  shares  of  CalEnergy  Common  Stock  (equivalent  to  a
conversion  price of $42.90 per share of the Company's Common  Stock),
subject to customary anti-dilution adjustments.

Until  converted into the Company's Common Stock, the Trust Securities
will  have  no voting rights with respect to the Company  and,  except
under  certain limited circumstances, will have no voting rights  with
respect  to  the  Trust.  Distributions on the Trust  Securities  (and
Junior  Debentures) are cumulative, accrue from the  date  of  initial
issuance  and  are  payable quarterly in arrears, commencing  June  1,
1997.   The Junior Debentures are subordinated in right of payment  to
all  senior indebtedness of the Company and the Junior Debentures  are
subject  to  certain  covenants, events of default  and  optional  and
mandatory  redemption  provisions, all  as  described  in  the  Junior
Debenture Indenture.

Pursuant   to   a   Preferred  Securities  Guarantee  Agreement   (the
"Guarantee"),  between the Company and a preferred guarantee  trustee,
the  Company has agreed irrevocably to pay to the holders of the Trust
Securities, to the extent that the Trust has funds available  to  make
such  payments,  quarterly  distributions,  redemption  payments   and
liquidation  payments  on the Trust Securities.  Considered  together,
the  undertaking  contained  in  the Declaration,  Junior  Debentures,
Indenture  and Guarantee constitute a full and unconditional guarantee
by the Company of the Trust's obligations under the Trust Securities.

A  portion  of the net proceeds of the Trust Securities offering  were
used to repay the CalEnergy Credit Facility.

21.  Geographic Information

The Company operates in one principal industry segment:  the
generation, distribution and supply of electricity to customers
located throughout the world.  The Company's operations by geographic
area are as follows:

                          1996      1995      1994
Revenue
   Americas             457,032   355,112   154,562
   Asia                  35,691       ---       ---
   Europe                39,191       ---       ---
                        531,914   355,112   154,562

Operating income (loss)
   Americas             203,305   155,885    77,450
   Asia                  17,914       ---       ---
   Europe                 6,163       ---       ---
                        227,382   155,885    77,450

                         1996        1995
Identifiable assets
   Americas          $2,613,830  $2,194,873
   Asia                 713,570     459,165
   Europe             2,385,507         ---
                     $5,712,907  $2,654,038

22. QUARTERLY FINANCIAL DATA (UNAUDITED)

Following is a summary of the Company's quarterly results of
operations for the years ended December 31, 1996 and December 31,
1995.
                           Three Months Ended *

   1996: (1)               March 31  June 30  September 30 December 31

 Sales of electricity      $75,944 $104,735    $165,487   $172,768
 and steam
 Total revenue              90,356   115,794    179,048    190,997
 Total costs and            69,398    87,482    123,169    160,433
 expenses
 Income before provision                                          
 for income                 20,958   28,312      55,879     30,564
 taxes and minority          6,497    9,040      18,325      7,959
 interest
 Provision for income
 taxes
 Net income before          14,461    19,272     37,554     22,605
 minority interest             ---       ---        ---      1,431
 Minority interest
 Net income attributable   $14,461  $ 19,272   $ 37,544   $ 21,174
 to common shares
 Net income per share -
 primary                   $   .27  $    .35   $    .67   $     33
 Net income per share - 
 fully diluted             $   .26  $    .33   $    .59   $    .32


                                     Three Months Ended *
  1995: (2)                March 31  June 30  September 30 December 31

  Sales of electricity
  and steam                $72,978  $ 81,756   $102,423   $ 78,473
  Total revenue             86,685    97,096    119,717     95,225
  Total costs and
  expenses                  68,527    76,957     79,898     76,290
  Income before provision
  for income taxes and
   minority interest        18,158    20,139     39,819     18,935
  Provision for income
  taxes                      5,540     6,248     12,457      6,386
  Net income before
  minority interest         12,618    13,891     27,362     12,549
  Minority interest          3,005       ---        ---        ---
  Net income                 9,613    13,891     27,362     12,549
  Preferred dividends        1,080       ---        ---        ---
  Net income attributable
  to common shares         $ 8,533   $13,891    $27,362   $ 12,549
  Net income per share - 
  primary                  $   .21   $   .27    $   .52   $    .24
  Net income per share -
  fully diluted            $   .21   $   .27    $   .48   $    .18

* The Company's operations are seasonal in nature with a
disproportionate percentage of income historically earned in the
second and third quarters.
(1)  Reflects acquisitions of Northern, Falcon Seaboard and the
Partnership Interest.
(2)  Reflects acquisition of Magma.


INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholders
CalEnergy Company, Inc.
Omaha, Nebraska

We  have  audited the accompanying consolidated balance sheets  of
CalEnergy Company, Inc. and subsidiaries as of December  31,  1996
and  1995,  and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1996. These financial statements are
the    responsibility   of   the   Company's    management.    Our
responsibility  is  to  express  an  opinion  on  these  financial
statements based on our audits.

We  conducted  our  audits in accordance with  generally  accepted
auditing  standards.  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
CalEnergy Company, Inc. and subsidiaries at December 31, 1996  and
1995 and the results of their operations and their cash flows  for
each of the three years in the period ended December 31, 1996,  in
conformity with generally accepted accounting principles.



Deloitte & Touche LLP
Omaha, Nebraska
January 31, 1997
(February 27, 1997 as to Notes 6 and 20)
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