2


               SECURITIES AND EXCHANGE COMMISSION

                    WASHINGTON, D.C.  20549

                           FORM 10-K

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

          For the fiscal year ended December 31, 1997
                   Commission File No. 1-9874

                    CALENERGY COMPANY, INC.
     (Exact name of registrant as specified in its charter)

        Delaware                         94-2213782
(State  or other jurisdiction of         (I.R.S. Employer
incorporation or organization)           Identification No.)

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

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

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

                                                    Name of exchange
      Title of each class                        on which registered
Common Stock, $0.0675                            New York Stock Exchange
par  value ("Common Stock")                      Pacific Stock Exchange
                                                 London Stock Exchange

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

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

               Yes    X            No

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

     Based on the closing sales price of Common Stock on the New
York Stock Exchange on March 23, 1998 the aggregate market value
of  the  Common Stock held by non-affiliates of the Company  was
$1,865,191,447.

     60,411,059 shares of Common Stock were outstanding on March 23, 1998.

TABLE OF CONTENTS


PART I                                                          1
ITEM 1.  BUSINESS                                               1
GENERAL                                                         1
RECENT SUCCESSFUL ACQUISITIONS                                  1
STRATEGY                                                        2
 THE GLOBAL ENERGY MARKET                                       4
 THE UNITED STATES                                              6
 THE UNITED KINGDOM                                             6
 THE PHILIPPINES                                                8
THE COMPANY'S DISTRIBUTION AND SUPPLY BUSINESS                  8
POWER GENERATION PROJECTS                                      10
 PROJECTS IN OPERATION                                         10
 PROJECTS IN CONSTRUCTION                                      11
 PROJECTS WITH SIGNED POWER SALES CONTRACTS OR AWARDED
 DEVELOPMENT RIGHTS                                            12
PROJECTS IN OPERATION                                          13
 UNITED STATES OPERATIONS                                      13
 U.S. GAS PROJECTS                                             16
 OTHER U.S. GEOTHERMAL OPERATIONS                              18
 UNITED KINGDOM OPERATIONS AND CONSTRUCTION                    18
 THE PHILIPPINES OPERATIONS AND CONSTRUCTION                   18
 INDONESIA OPERATIONS AND CONSTRUCTION                         22
PROJECTS IN DEVELOPMENT                                        23
 UNITED STATES                                                 23
 UNITED KINGDOM                                                24
 PHILIPPINES                                                   24
 INDONESIA                                                     25
PRODUCING GAS FIELD OPERATIONS AND FIELDS IN DEVELOPMENT       25
THE COMPANY'S PRODUCING GAS FIELD OPERATIONS AND FIELDS IN
DEVELOPMENT                                                    25
 FIELDS IN DEVELOPMENT                                         26
REGULATORY, ENERGY AND ENVIRONMENTAL MATTERS                   27
 UNITED STATES                                                 27
 UNITED KINGDOM                                                28
 EMPLOYEES                                                     28
ITEM 2. PROPERTIES                                             29
ITEM 3.   LEGAL PROCEEDINGS                                    29
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS   29
PART II                                                        30
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER'S MATTERS                                          30
ITEM 6. SELECTED FINANCIAL DATA                                31
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION                             31
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA            31
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE                            31
PART III                                                       32
MANAGEMENT                                                     32
ITEM 10.  DIRECTORS, EXECUTIVE AND OTHER OFFICERS OF THE COMPANY32
PART IV                                                        38
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K                                                       38
SIGNATURES                                                     40
EXHIBIT INDEX                                                  62


DOCUMENTS INCORPORATED BY REFERENCE

Incorporated  by reference into this Form 10-K,  in  response  to
Item  3 Part I, Items 6 through 8 of Part II and Items 10 through
13  of  Part  III, are the portions indicated herein of  (i)  the
annual  report  of  CalEnergy Company, Inc.  (the  "Company")  to
security holders for the fiscal year ended December 31, 1997 (the
"Annual Report"), and (ii) the Company's proxy statement dated on
or  about April 3, 1998 for the annual meeting of stockholders to
be held on May 21, 1998 (the "Proxy Statement").


                                PART I

Item 1.  Business

General

      CalEnergy Company, Inc. (the "Company") is a fast-growing  global
power  company whose goal is to be a leading provider of low  cost  and
reliable  energy services throughout the world as governments privatize
or  deregulate electricity and gas markets. The Company was founded  in
1971  and, through its subsidiaries, manages and owns interests in over
5,000  megawatts  ("MW") of power generation facilities  in  operation,
construction   and  development  worldwide,  including  20   generating
facilities  which  it  currently operates.  In  addition,  through  its
subsidiary, Northern Electric plc ("Northern"), the Company is  engaged
in  the  distribution  of  electricity  to  approximately  1.5  million
customers  primarily  in northeast England as well  as  the  supply  of
electricity  and gas (together with other related business  activities)
throughout  England  and  Wales. The Company has  achieved  significant
growth  in  earnings and assets over the past five years  through:  (i)
acquisitions  that  complement  and diversify  the  Company's  existing
business, broaden the geographic locations of and fuel sources used  by
its projects and enhance its competitive capabilities; (ii) enhancement
of  the  financial and technical performance of existing  and  acquired
projects;  and  (iii) development and construction of  new  plants  and
facilities ("greenfield development").

      The  market capitalization of the Company has risen at a compound
annual rate of 28% from approximately $656 million in December 1993  to
approximately $1.9 billion in March 1998, the revenues of  the  Company
have  risen  at a compound annual rate of 130% from approximately  $186
million  in  1994 to approximately $2.2 billion in 1997 and net  income
available   to   common   stockholders  excluding   non-recurring   and
extraordinary  items has risen at a compound annual rate  of  60%  from
approximately  $34  million in 1994 to approximately  $139  million  in
1997.  From  1994 through 1997, the Company's EBITDA and  total  assets
have  increased  by  a  compound annual growth rate  of  84%  and  88%,
respectively.  EBITDA for the year ended December  31,  1997  was  $811
million  before  a  non-recurring item.  "EBITDA" means  the  Company's
earnings,   before  interest,  taxes,  depreciation  and  amortization.
Information  concerning EBITDA is presented here not as  a  measure  of
operating results, but rather as a measure of the Company's ability  to
service  debt.  EBITDA  should not be construed as  an  alternative  to
either  (i)  operating income (determined in accordance with  Generally
Accepted  Accounting  Principles  ("GAAP"))  or  (ii)  cash  flow  from
operating  activities (determined in accordance with  GAAP).   In  this
Annual Report, references to "U.S. dollars," "dollars," "US $," "$"  or
"cents"  are to the currency of the United States and references  to  "
pounds  sterling," "pounds," "sterling," "pounds sterling," "pence"  or
"p" are to the currency of the United Kingdom.

      The Company's Common Stock is traded on the New York, Pacific and
London Stock Exchanges.  The principal executive offices of the Company
are  located at 302 South 36th Street, Suite 400, Omaha, Nebraska 68131
and   its  telephone  number  is  (402)  341-4500.   The  Company   was
incorporated in 1971 under the laws of the State of Delaware.

Recent Successful Acquisitions

      In  the  last  three  years, the Company has consummated  several
significant  acquisitions, which have been successfully integrated  and
immediately  accretive  to  earnings.  In  January  1995,  the  Company
acquired Magma Power Company ("Magma"), a publicly-traded United States
independent  power producer with 228 net MW of operating  capacity  and
154  net MW of ownership capacity, for approximately $958 million.  The
Magma  acquisition,  combined  with the Company's  previously  existing
assets,  made  the  Company the world's largest independent  geothermal
power  producer  (based on the Company's estimate of  aggregate  MW  of
electric generating capacity in operation and construction).

       In   April   1996,  the  Company  completed  the  purchase   for
approximately  $70 million of its partner's interests in four  electric
generating  plants in Southern California, resulting in sole  ownership
of  the  Imperial  Valley Projects' 228 net MW of  aggregate  operating
capacity.

      In  August  1996, the Company acquired Falcon Seaboard Resources,
Inc.  ("Falcon  Seaboard")  for  approximately  $226  million,  thereby
acquiring  significant  ownership in 520 net MW  of  natural  gas-fired
electric   production  facilities  located  in  New  York,  Texas   and
Pennsylvania and a related gas transmission pipeline.

      In  December 1996, the Company acquired a majority of the  common
shares  of Northern. Northern is one of the twelve regional electricity
companies (each, a "REC") which came into existence as a result of  the
restructuring and subsequent privatization of the electricity  industry
in   the   United  Kingdom  ("U.K.")  in  1990.  Northern   distributes
electricity  in its authorized area located in northeast England  which
covers  approximately 14,400 square kilometers and has a population  of
approximately  3.2  million people. Northern also supplies  electricity
and  gas  inside  and  outside its authorized area and  currently  owns
interests in four producing gas field operations in the North Sea.

      On  September 11, 1997, the Company signed a definitive agreement
with  Kiewit Diversified Group Inc. ("KDG"), a wholly-owned  subsidiary
of  Peter Kiewit Sons', Inc. ("PKS"), to acquire all of KDG's ownership
interest  in  Northern  and  the  various  other  international   power
generation projects and development opportunities (the "Energy  Project
Joint  Venture Acquisition") which were jointly owned with, and managed
by,  the  Company,  as well as to repurchase all of  KDG's  outstanding
ownership   interests  in  the  Company's  Common  Stock  (the   "Stock
Repurchase,"  and  together  with  the  Energy  Project  Joint  Venture
Acquisition,  the  "KDG Acquisition").  The Company completed  the  KDG
Acquisition on January 2, 1998.

      KDG's  ownership interest in the Company consisted of  20,231,065
shares  of Common Stock (including options to acquire 1,000,000  shares
of  Common  Stock) which represented approximately 30% of the Company's
then  outstanding shares (26% on a fully diluted basis), a 30% interest
in  Northern and the following power project interests: 45% of the  165
net MW Mahanagdong project, 35% of the 150 net MW Casecnan project, 47%
of  the 400 net MW Dieng project, 44% of the 400 net MW Patuha project,
and  30%  of the 400 net MW Bali project.  The Company is the  managing
partner  and  operator of each such project (collectively,  the  "Joint
Venture Energy Projects"). In addition, KDG's 50% interest in all other
power  project opportunities which the Company had in development under
the international joint venture agreement with KDG were transferred  to
the  Company.  The  Company immediately added  over  1,000  net  MW  of
generating capacity in operation, construction and development  to  its
project  portfolio (including approximately 850 net  MW  of  operating,
construction and advanced stage development projects).

      The  Company paid $1,159 million for KDG's ownership interest  in
Northern,  the  Joint Venture Energy Projects and the Company's  Common
Stock. The Company funded the KDG Acquisition with available cash,  the
net  proceeds from the issuance of 19.1 million shares of Common  Stock
which  closed  on October 17, 1997 and the proceeds of an  offering  of
7.63%  Senior  Notes due 2007 which closed on October 28,  1997.  These
debt securities are senior unsecured obligations of the Company ranking
pari  passu  in  right  of payment with all other existing  and  future
senior unsecured obligations of the Company and will rank senior to all
other existing and future subordinated debt of the Company.

Strategy

       The  Company's  growth  strategy  remains  focused  upon  taking
advantage  of  the investment opportunities created by  the  continuing
deregulation and privatization in energy sectors throughout the  world.
In  order  to effectively execute its growth strategy, the Company  has
organized  its operations into a functional structure.  The  functional
alignment  is believed to allow for greater efficiencies in  operations
and  better  coordination  and  asset  utilization  in  developing  the
Company's business.

     The Company's strategy is comprised of the following key elements:

      o   Growth  through international and domestic acquisitions.  The
Company has successfully completed five acquisitions in the past  three
years, each of which was immediately accretive to earnings. The Company
believes  several  of these acquisitions provided it  with  specialized
skills  and  experience that enhance its competitive  position  in  the
areas  it  has  targeted for future growth. For example, the  Company's
acquisition of Northern, a U.K. regional electricity company engaged in
electricity  distribution  and  supply  and  gas  supply  and   related
businesses,  is  the  first step in its planned  expansion  into  those
sectors  in  the U.S. and elsewhere throughout the world. In  addition,
since  the U.K. is progressively deregulating its electricity  and  gas
supply sectors, the Company believes that its Northern management  team
has the knowledge and skills to compete in a competitive supply market.
Northern  also  possesses  the sophisticated  billing  and  proprietary
information  systems that are believed by the Company to be  critically
important  components  of the skill and technology  base  necessary  to
compete effectively in a deregulated environment.
    The Company believes that the electricity industry in the U.S. will
also progressively deregulate over the next three to
five years and will largely follow the regulatory model established  in
the  U.K.  (with  incentive based rates or price  caps).  As  currently
regulated  U.S.  electricity  distributors  and  electricity  and   gas
suppliers   attempt  to  rationalize  their  businesses   to   maintain
profitability in a price competitive market, the Company believes  that
opportunities will become available to low cost and reliable  providers
of  energy  services to gain market share in energy supply and  provide
additional  services to competitors (such as utility line  construction
and  maintenance  services, metering, customer billing and  information
systems services).  As a result, the Company believes that by acquiring
a  U.S.  utility operation and transferring the knowledge,  skills  and
systems gained at Northern, it can create a platform from which a  U.S.
energy  distribution and supply business can be profitably  established
and  expanded in a deregulated market.  Consistent with its disciplined
approach  to  acquisitions, the Company will continue to evaluate  U.S.
utility  available  opportunities  from  time  to  time,  although   it
currently has no specific acquisition plans.

      o   Growth through greenfield development of energy projects. The
Company continues to view the international power generation sector  as
an  attractive  market  for the development of  new  greenfield  energy
opportunities,  an  area  in  which  it  has  demonstrated  substantial
expertise.  In  the  past three years, the Company  has  developed  and
financed  seven new international power projects, three of  which  have
already  completed construction on schedule and within budget  and  are
now  earning revenues and the remaining four of which are still in  the
construction phase. With the acquisition of Sovereign Exploration  Ltd.
(now CalEnergy Gas UK) as part of the Northern acquisition, the Company
has  expanded its development strategy to include integrated generation
and  upstream  natural gas operations. The addition of gas exploration,
production  and  technical storage capabilities allows the  Company  to
expand  its number of target markets throughout the world. In addition,
utilization  of its geotechnical expertise in this manner allows  early
entrance  with  limited upfront capital expenditures  into  markets  in
which   the   Company  might  not  otherwise  have  power   development
opportunities.  The  integration of power generation  plants  with  the
upstream  gas  sources in competitive energy markets will also  produce
market  arbitrage  opportunities  to sell  either  gas  or  electricity
depending  upon  market conditions at the time. The Company  previously
announced  two upstream gas projects, one in Western Australia  at  the
Gingin  field  in the Perth Basin and one in Poland at the  large  Pila
Concession.

       o   Profit  enhancement  through  operating  efficiencies  while
maintaining   quality   and  reliability  of   service.   The   Company
aggressively pursues profitability improvements through efficiency  and
productivity  gains at existing operations. Since  1991,  the  cost  of
production per kilowatt hour ("kWh") at the Company's Coso Projects has
declined from 2.7 cents/kWh to 2.0 cents/kWh. Since 1994, the  cost  of
production per kWh at the Imperial Valley Projects (as defined  herein)
has  declined  from 5.3 cents/kWh to 2.9 cents/kWh. In each  case,  the
Company   has  achieved  these  efficiencies  while  maintaining   high
reliability   and   safety   in  its  operation.   Through   continuing
advancements  in  drilling  technology,  reservoir  modeling  and  well
maintenance  techniques, the production capacity of  new  and  existing
wells  has  been  improved or maintained and, as a result,  the  useful
output  of  the  various  geothermal resources  has  been  improved  or
maintained.

     o  Continued diversification of revenue base and fuel sources. The
Company  believes  that  it presently has a diversified  revenue  base,
distributed  among  its ownership of an operating electricity  utility,
its  ownership of 1,689 net MW in twenty-one operating projects and its
ownership  of  producing  gas  fields.   Other  than  the  revenues  of
Northern,  which are largely derived from its electricity  distribution
and  supply  activities,  substantially all of  the  Company's  current
revenues are based on long-term contracts with seven large U.S. utility
companies  and  the  foreign government of the  Philippines  (sovereign
ratings   of   Ba1/BB+).   The  Company  intends  to   seek   continued
diversification   of  its  revenue  base  and  fuel   sources   through
acquisitions and greenfield development.

       o    Maintenance  of  prudent  financial  and  risk   management
practices. The Company has consistently maintained, and intends in  the
future  to maintain what it believes to be prudent financial  and  risk
management  practices.  A  primary  objective  of  the  Company  is  to
structure project financing for development projects which can be rated
investment  grade  by  Moody's Investor Services Inc.  and  Standard  &
Poor's  Ratings  Services. Its Coso projects are  rated  Baa2/BBB;  its
Salton  Sea  Funding  Corp. is rated Baa3/BBB-; its  Northern  Electric
subsidiary  is  rated A3/BBB+, and its CE Electric UK  Funding  Company
subsidiary's  senior  notes  are rated  Baa1/BBB+.   The  debt  ratings
reflected above have been published by Moody's Investors Services, Inc.
and  Standard  & Poor's Ratings Services, respectively, in  respect  of
certain  senior  indebtedness of the respective  issuers  shown.  These
ratings  may be changed from time to time by the ratings agencies.  The
project  financing structures engaged in to date by the Company include
as  a  fundamental  protection  for  the  Company's  other  assets  the
requirement  that (with certain minimal exceptions) the funds  borrowed
for the purpose of financing a project are to be financed primarily  or
entirely under loan agreements and related documents which provide that
the  loans are to be repaid solely from the project's revenues and that
the  security granted to secure the loan obligation be limited  to  the
capital  stock, assets, contracts and cash flow of the project  or  its
holding  company. Under this type of financing structure,  the  lenders
cannot  seek recourse against the Company or its other subsidiaries  or
projects. The Company intends to continue to structure future  projects
in  a manner which minimizes the exposure of the Company's other assets
through appropriate non-recourse project financings.

      o  Continued adherence to strict project evaluation criteria. The
Company  intends  to  operate only in those  countries  where  economic
fundamentals   are  believed  to  be  attractive  and  risks   can   be
contractually  mitigated  or  adequately  covered  by  insurance.   The
Company's  international investment criteria generally includes  giving
due consideration, where appropriate, to the following:
          o  Sovereign guarantees;
          o  Significant demand for new power generating facilities;
          o   An  established legal system providing for enforceability
           of contracts and regulations;
          o   Contracts  with utilities, governments or  other  parties
           with   acceptable   creditworthiness   which   provide   for
           primarily  US$-denominated payments and certain  contractual
           protections    regarding   currency    convertibility    and
           transferability;
          o   Fixed-price date-certain, turnkey construction  contracts
           with    liquidated   damages   and   performance    security
           provisions; and
          o  Availability of political risk insurance.

    The  Company  intends  to continue to focus  primarily  upon  those
development   opportunities  where  it  is   permitted,   directly   or
indirectly,  to  acquire  a majority ownership  interest  and  exercise
operational control over the newly developed or acquired projects.


                       The Global Energy Market

      The  opportunity  for  independent power  generation  and  energy
distribution and supply has expanded from a United States market  to  a
global  competitive  market as many foreign  countries  have  initiated
restructuring and privatization policies that encourage the development
of independent power generation and independent distribution and supply
of  energy.  Internationally,  large  amounts  of  new  electric  power
generating capacity are required in developing countries. The  movement
toward   privatization  in  some  developing  countries   has   created
significant new markets outside the United States. The need  for  rapid
economic  expansion has caused many countries to select  private  power
development  as  their only practical alternative  and  to  restructure
their   legislative   and  regulatory  systems   to   facilitate   such
development. The Company believes that the significant need  for  power
in  developing  markets has created strong local  support  for  private
power  projects  in  many  foreign  countries  and  has  increased  the
availability  of  attractive  long-term power  contracts.  The  Company
intends  to  take advantage of opportunities in these  markets  and  to
develop,  construct  and  acquire power  generation,  distribution  and
supply  and  related  energy projects meeting  its  strategic  criteria
outside the United States.

      In  addition,  as  privatization, deregulation and  restructuring
initiatives  are enacted in various countries and states,  the  Company
has  identified  a number of promising opportunities to  acquire  power
generation,  distribution and supply assets, as well  as  other  energy
related  infrastructure  assets. These  opportunities  include  bidding
opportunities  in  connection  with privatization  initiatives  in  the
electricity  and  gas  distribution  and  supply  sectors  in   various
countries,   including  principally  Eastern  Europe,  South   America,
Australia  and  New Zealand. The Company expects to see  more  of  such
acquisition opportunities in additional markets in the future.

      In  pursuing its strategy, the Company presently intends to focus
upon  development and acquisition opportunities in countries possessing
certain  characteristics which meet the Company's investment  criteria.
At  the  present time, the Company is active in the United States,  the
Philippines   and  the  United  Kingdom  and  is  pursuing  development
opportunities in Australia, New Zealand and Poland. Set forth below  is
certain general information concerning the present status of the energy
markets  in  those  countries  in  which  the  Company  currently   has
significant operations.

     The United States

      In  the  United  States, the independent power industry  expanded
rapidly  in  the  1980s,  facilitated by the enactment  of  the  Public
Utilities  Regulatory  Policies Act ("PURPA").  PURPA  was  enacted  to
encourage  the  production  of  electricity  by  non-utility  companies
(frequently referred to as independent power companies) as well  as  to
lessen  reliance  on  imported fuels. According  to  the  Utility  Data
Institute,  independent  power  producers  were  responsible  for   the
installation  of approximately 30,000 MW of capacity, or  50%,  of  the
United  States  electric generation capacity that has  been  placed  in
service  since  1988.  However,  as  the  size  of  the  United  States
independent  power market increased, available domestic power  capacity
and  competition in the industry also significantly increased  and  the
need for new generating capacity has been reduced.

      During  the  last few years, many states began to accelerate  the
movement toward more competition in many aspects of the electric  power
market,  including generation, transmission, distribution  and  supply.
Extensive  federal  and  state legislative and regulatory  reviews  are
presently  underway  in  an  effort to  further  such  competition.  In
particular,  the state of California has adopted a bill to  restructure
the  electric  industry by providing for a phased-in competitive  power
generation  industry,  with  a power exchange  and  independent  system
operator,  and for direct access to generation for all power purchasers
outside  the  power  exchange  under certain  circumstances.  The  bill
provides that existing qualifying facility power sales agreements  will
be  honored.  Other states have or are expected to take  similar  steps
aimed at increasing competition by restructuring the electric industry,
allowing  retail competition and deregulating most electric  rates.  In
addition,  recent  federal legislation has been  proposed  which  would
repeal  PURPA and the Public Utility Holding Company Act  of  1935,  as
amended,  respectively. The Company cannot predict the  final  form  or
timing  of  the  proposed industry restructuring or the result  on  its
operations. However, the Company believes that the impending changes in
the  regulation  of the United States power markets will  reflect  many
aspects  of  the United Kingdom model (discussed below) for competitive
generation,  transmission,  distribution  and  supply  of  energy.  The
Company  further  expects that the current effort to introduce  broader
wholesale and retail competition in the United States will result in  a
continuation  and acceleration of the recent trend toward consolidation
among  domestic  utilities  and  independent  power  producers  and  an
increase  in  the  trend  toward  disaggregation  (or  unbundling)   of
vertically  integrated utilities into separate generation, transmission
and distribution businesses.

     The United Kingdom

      The  electricity  industry in the United  Kingdom  has  seen  the
ongoing  privatization of electric supply and distribution since  1990.
The  Electricity  Act  of 1989 established an industry  structure  that
permitted  this phased-in privatization to occur. Since that  time,  in
England  and Wales, electricity is produced by generators, the  largest
of  which  are National Power, PowerGen and British Energy. Electricity
is  transmitted through the national grid transmission  system  by  The
National Grid Company plc ("NGC") and distributed to customers  by  the
twelve   regional  electric  companies  ("RECs")  in  their  respective
authorized   areas.   Most  customers  currently  are   supplied   with
electricity  by  their local REC, although there  are  other  suppliers
holding  second  tier supply licenses, including other  generators  and
RECs,  who  can  compete  to  supply larger  customers  in  that  REC's
authorized area. Under the current licensing regime, during 1998 it  is
expected   that  all  customers,  including  those  who  are  currently
customers  with  a  maximum demand of not more than  100kW  ("Franchise
Supply  Customers"),  will  become free  to  choose  their  electricity
supplier.

      Virtually all electricity generated in England and Wales is  sold
by  generators  and bought by suppliers through the Pool.  A  generator
that  is  a  Pool member and also a licensed supplier must nevertheless
sell  all the electricity it generates into the Pool, and purchase  all
the  electricity  that it supplies from the Pool. Because  Pool  prices
fluctuate,   generators  and  suppliers  may   enter   into   bilateral
arrangements, such as contracts for differences ("CFDs"), to provide  a
degree of protection against such fluctuations.

      Distribution.  Each of the RECs is required to  offer  terms  for
connection to its distribution system to any person, and for use of its
distribution   system  to  any  authorized  electricity  operator.   In
providing  use of its distribution system, a REC must not  discriminate
between  its  own  supply  business and that of  any  other  authorized
electricity  operator, or between those of other authorized electricity
operators;  nor  may  its  charges differ  except  where  justified  by
differences in cost.

      Most  revenue  of the distribution business is  controlled  by  a
distribution price control formula. The Retail Price Index ("RPI") used
in  this  formula reflects the average of the 12 month inflation  rates
recorded  for  the  previous July to December period. The  distribution
price  control formula also reflects an XD factor which is  established
by  the Regulator following review and is set at 3% from April 1, 1997.
This  formula  determines  the  maximum  average  price  per  unit   of
electricity  distributed (in pence per kilowatt hour) which  a  REC  is
entitled to charge. The distribution price control formula permits RECs
to  receive additional revenues due to increased distribution of  units
and  a  predetermined increase in customer numbers. The  price  control
does  not seek to constrain the profits of a REC from year to year.  It
is a control on income which operates independently of the REC's costs.
During  the  lifetime  of  the price control  additional  cost  savings
therefore  contribute  directly  to  profit.  The  distribution  prices
allowable  under  the  current distribution price control  formula  are
expected  to  be  reviewed by the Regulator at the  expiration  of  the
formula's scheduled five-year duration, effective as of April 1,  2000.
The formula may be further reviewed at other times in the discretion of
the Regulator.

      With  effect from April 1, 1998, domestic and smaller  commercial
customers'  prices  will  be  subject to a  price  cap  which  requires
reductions  of 4.2% (less inflation) compared to the prices  prevailing
in  July  1997.   A  further reduction of 3% (less inflation)  will  be
required on April 1, 1999.

      Supply. Subject to minor exceptions, all electricity customers in
the  United  Kingdom must be supplied by a licensed supplier.  Licensed
suppliers  purchase  electricity and make use of the  transmission  and
distribution networks to achieve delivery to customers' premises.

      There  are two types of licensed suppliers: PES (or "first tier")
suppliers and second tier suppliers. PESs are the RECs, Scottish  Power
and  Hydro-Electric, each supplying in its respective authorized  area.
Second tier suppliers include National Power, PowerGen, British Energy,
Scottish  Power, Hydro-Electric and other PESs supplying outside  their
respective  authorized  areas. There are also a number  of  independent
second tier suppliers.

      At  present, a Franchise Supply Customer can only buy electricity
from  the  PES  authorized  to  supply the  relevant  authorized  area.
Franchise  Supply  Customers  typically  include  domestic  and   small
commercial   and  small  industrial  customers.  Non-Franchise   Supply
Customers  with demand over 100kW are not limited to buying electricity
from  the  local PES and can choose to buy from a second tier supplier.
Such  customers  are  typically  larger  commercial,  agricultural  and
industrial  electricity users. Second tier suppliers compete  with  one
another  and with the local PES to supply customers in this competitive
(or "non-franchise") sector of the market.

      The  supply  of electricity to all Franchise Supply Customers  is
subject  to  price control until March 31, 1998. The maximum  permitted
average  charge  per  unit supplied (in pence  per  kilowatt  hour)  is
controlled  by  a formula whereby certain costs are passed  through  in
full  (the Y term) to customers. The permitted income per unit supplied
in  respect of the supply business' own costs and margin increases  (or
decreases)  each  year by RPI--X (the "Supply Price  Control  Formula")
where  X  is  currently 2%. RPI reflects the average of  the  12  month
inflation rates recorded for the previous July to December period.  The
X  factor  is  established by the Regulator during  the  price  control
review. The Y term is a pass-through of certain costs which are  either
largely  outside  the  control  of  the  REC  or  have  been  regulated
elsewhere.  It  thus  covers  the  REC's  electricity  purchase  costs,
including  both  direct  Pool  purchase costs  and  costs  of  hedging,
transmission charges made by NGC, distribution charges made by its  own
and  other  REC  distribution businesses and  other  levies  which  are
attributable  to  Franchise  Supply  Customers.  Associated  with   the
deregulation occurring in 1998, a different form of price cap  will  be
established for some of the current Franchise Supply Customers.

      The  Pool.  The Pool was established at the time of privatization
for bulk trading of electricity in England and Wales between generators
and  suppliers. The Pool reflects two principal characteristics of  the
physical  generation  and  supply  of  electricity  from  a  particular
generator to a particular supplier. First, it is not possible to  trace
electricity  from  a  particular generator to  a  particular  supplier.
Second,  it  is  not  practicable to store electricity  in  significant
quantities,  creating the need for a constant matching  of  supply  and
demand.  Subject  to certain exceptions, all electricity  generated  in
England  and  Wales must be sold and purchased through  the  Pool.  All
licensed generators and suppliers must become and remain signatories to
the  Pooling  and Settlement Agreement, which governs the  constitution
and  operation of the Pool and the calculation of payments due  to  and
from  generators  and  suppliers. The Pool  also  provides  centralized
settlement  of accounts and clearing. The Pool does not itself  buy  or
sell electricity.

     Prices for electricity are set by the Pool daily for each one-half
hour  of  the following day based on the bids of the generators  and  a
complex  set  of  calculations matching supply and  demand  and  taking
account  of  system stability, security and other costs.  A  settlement
system  is used to calculate prices and to process metered, operational
and  other  data  and  to carry out the other procedures  necessary  to
calculate  the  payments due under the Pool trading  arrangements.  The
settlement  system  is  administered on a day-to-day  basis  by  Energy
Settlements and Information Services, Limited, a subsidiary of NGC,  as
settlement system administrator.

      The  price  control regulations which govern the authorized  area
supply market permit the pass-through to customers of certain permitted
costs,  which  include the cost of arrangements such as CFDs  to  hedge
against  Pool  price volatility. Generally, CFDs are contracts  between
generators  and suppliers that have the effect of fixing the  price  of
electricity  for a contracted quantity of electricity over  a  specific
time  period. Differences between the actual price set by the Pool  and
the  agreed prices give rise to difference payments between the parties
to  the  particular  CFD.  At any time, Northern's  forecast  franchise
supply  market demand is substantially hedged through various types  of
agreements including CFDs.

     The Philippines

      According to the 1995 Power Development Program (1995-2005)  (the
"PDP")  of  the National Power Corporation of the Philippines  ("NPC"),
industrial  growth, a rising standard of living and an expanding  power
distribution  network have resulted in increased demand for  electrical
power  in the Philippines by an average of 6% per year since 1987.  NPC
has  projected  that  over the next 10 years the  need  for  additional
generating  capacity in the Philippines will exceed 14,000  MW.  Demand
growth  is expected to increase as industrialization continues,  living
standards rise and the power distribution network expands. According to
the  PDP,  for the period 1996 to 2000, projected peak power demand  is
estimated to increase by approximately 60%, 64%, and 90% for Luzon, the
Visayas,  and Mindanao, respectively. For the country, total  projected
peak  power  is estimated to increase by 3,826 MW or 65% from  1996  to
2000. For the period 2001 to 2005, projected peak power is estimated to
increase by approximately 50%, 43%, and 59% for Luzon, the Visayas, and
Mindanao, respectively. For the country, total projected peak power  is
estimated to increase by 5,459 MW or 51% from 2001 to 2005.

       The  PDP  proposes  to  meet  this  demand  by  increasing   the
participation of the private sector in power generation to 32% in 2000,
and  to  61%  in 2005, through direct sales to utilities by independent
power producers and the use of build-own-operate-transfer projects. NPC
also  will  offer existing power plants to the private  sector  through
rehabilitate-operate-maintain      and       rehabilitate-operate-lease
arrangements.

     Geothermal power has been identified as a preferred alternative by
the  Government of the Philippines due to the domestic availability and
the minimal environmental effects of geothermal power in comparison  to
other forms of power production.

            The Company's Distribution and Supply Business

      Northern Electric Distribution Limited ("Northern Distribution"),
a  subsidiary of Northern, receives electricity from the national  grid
transmission  system  and distributes electricity  to  each  customer's
premises  using  Northern's  network of  transformers,  switchgear  and
cables.  Substantially  all of the customers in  Northern's  authorized
area  are connected to Northern's network and can only be supplied with
electricity  through  the Northern distribution system,  regardless  of
whether the electricity is supplied by Northern's supply business or by
other suppliers, thus providing Northern with distribution volume  that
is stable from year to year. Northern Distribution serves approximately
1.5  million  customers  in Northern's area and charges  its  customers
access fees for the use of the distribution system.

      At December 31, 1997, Northern's electricity distribution network
(excluding  service  connections to consumers)  included  approximately
17,000 kilometers of overhead lines and approximately 26,000 kilometers
of  underground  cables.  Substantially all substations  are  owned  in
freehold,  and  most of the balance are held on leases which  will  not
expire  within 10 years. In addition to the circuits referred to above,
Northern's  distribution facilities also include  approximately  24,000
transformers and approximately 23,000 substations.

      Northern  Electric Supply Limited ("Northern Supply") focuses  on
Northern's  supply  business and is responsible for  marketing,  tariff
setting,  contracts and customer service in connection with the  supply
of  both  electricity and gas. Northern's supply business involves  the
bulk  purchase of electricity, primarily from the Pool, and  subsequent
sale  to  individual  customers. Each of  the  RECs  is  currently  the
exclusive  supplier of electricity in its authorized area to  Franchise
Supply Customers. The formula described above controls the income  that
the  supply  business may receive from Franchise Supply  Customers  and
therefore  the  profits  that  can  be  derived  from  the  supply   of
electricity to Franchise Supply Customers. Supplies to other  customers
are not regulated since the Director General of Electricity Supply (the
"Regulator")  believes  that  the  market  in  excess   of   100kW   is
sufficiently  competitive not to require this. The current  regulations
that  permit each of the RECs to be the exclusive supplier in  each  of
their authorized areas are expected to expire during 1998.

     Under the terms of its public electricity supply ("PES") or "first
tier"   license,   Northern  currently  holds  the  right   to   supply
approximately 1.5 million Franchise Supply Customers within  Northern's
authorized  area.  In  addition to competing for  non-Franchise  Supply
Customers in its authorized area, Northern holds a second tier  license
to  compete with the RECs and other suppliers to provide electricity to
non-Franchise Supply Customers outside its authorized area. Northern is
one  of  the  largest suppliers in the competitive and open electricity
market in the United Kingdom and supplies customers in all 15 PES areas
in  Great Britain and Northern Ireland. Northern supplies substantially
more  sites  than it had previously supplied prior to the beginning  of
open competition in the supply business in the United Kingdom.

     Northern Supply also competes to supply gas inside and outside its
authorized  area.  Over the last six months of 1997, Northern  expanded
its  supply customer base by 20% by attracting nearly 300,000  new  gas
customers in part through the Dual Fuel marketing program.

      Northern  Utility  Services Limited ("Northern  Utility")  is  an
engineering  company whose role is to adapt, maintain and  restore  the
distribution  network  of Northern Distribution  and  to  sell  related
services  to  third  parties. Northern Utility has been  able  to  make
significant  cost  reductions for Northern  during  the  past  year  by
working  with  suppliers  in  order to improve  core  processes,  close
selected  depot  locations,  increase  staff  productivity  and  reduce
material  and  plant  costs. Northern Utility has pioneered  techniques
using  innovative diagnostic testing equipment which reduces  the  need
for  intrusive  maintenance. The equipment can  identify  some  of  the
causes  of  potential systems failures before breakdown and  subsequent
loss  of supply occurs. Also, the continued development in the  use  of
trenchless  technology  has  brought both financial  and  environmental
benefits  to  Northern  and  its customers.  While  Northern  Utility's
largest  customer  is  Northern Distribution,  it  currently  sells  an
average of approximately 14% of its services to third parties. Northern
Utility is Northern's largest employer.

     Northern Electric Retail Limited ("Northern Retail"), a subsidiary
of  Northern, sells electrical and gas appliances and provides  account
collection and customer services for Northern's other businesses.

      Northern  Metering  Services  Limited  ("Northern  Metering"),  a
subsidiary   of   Northern,   provides  meter   supply,   installation,
refurbishment and certification services as well as meter operator  and
data  collection  services. Northern Metering has developed  an  energy
profiling system which helps businesses reduce costs through  the  more
efficient use of all fuels, not just electricity.



           The Company's Power Generation Project Portfolio

      The Company currently has net ownership interests of an aggregate
of  (i)  1,689  net  MW  in  21 projects in operation  representing  an
aggregate net capacity of 3,510 net MW of electric generating capacity,
(ii)  327  net  MW in four projects under construction representing  an
aggregate  net  capacity of 415 net MW of electric generating  capacity
and  (iii) 945 net MW in eight projects in advanced development  stages
with  signed  power  sales agreements or under  award  representing  an
aggregate net capacity of 1,184 net MW of electric generating capacity.

      The  following  tables  set  out certain  information  concerning
various  Company  projects  in operation,  under  construction  and  in
development  pursuant  to  signed power  sales  agreements  or  awarded
mandates.
                       Power Generation Projects


Projects in Operation

PROJECT(6) FUEL   FACILITY NET     LOCATION PROJECT    CONTRACT CONTRACT POWER
           SOURCE NET      OWNERSHIP        COMMERCIAL EXPIRATION TYPE  PURCHASE
                  CAPACITY INTEREST         OPERATION
                  (IN MW)  (IN MW)          DATE(9)
                  (1)(2)(3)

United States
Navy I     Geo      88      41      China    8/1987    8/2011    SO4    Edison
                                    Lake,CA
BLM        Geo      88      42      China    3/1989    3/2019    SO4    Edison
                                    Lake,CA
Navy II    Geo      88      44      China    1/1990    1/2010    SO4    Edison
                                    Lake,CA
Vulcan     Geo      34      34      Imperial 2/1986    2/2016    SO4    Edison
                                    Valley,CA
Hoch (Del  Geo      38      38      Imperial 1/1989    12/2018   SO4    Edison
Ranch)                              Valley,CA
Elmore     Geo      38      38      Imperial 1/1989    12/2018   SO4    Edison
                                    Valley,CA
Leathers   Geo      38      38      Imperial  1/1990   12/2019   SO4    Edison
                                    Valley,CA
Salton     Geo      10      10      Imperial  7/1987   6/2017  Negot.   Edison
Sea I                               Valley,CA
Salton     Geo      20      20      Imperial  4/1990   4/2020    SO4    Edison
Sea II                              Valley,CA
Salton     Geo      50      50      Imperial  2/1989   2/2019    SO4    Edison
Sea III                             Valley,CA
Salton     Geo      40      40      Imperial  6/1996   9/2017  Negot.   Edison
Sea IV                              Valley,CA
Saranac    Gas     240     180      Plattsburg 6/1994  6/2009  Negot.   NYSEG
                                    NY
Power      Gas     200     200      Big Spring,6/1988  9/2003  Negot.   TUEC
Resources                           TX
NorCon     Gas      80      64      North East,12/1992 12/2017 Negot.   NIMO
                                    PA
Yuma       Gas      50      50      Yuma,AZ     5/1994  5/2024 Negot.   SDG&E
Roosevelt  Geo      23      17      Milford,UT  5/1984  1/2021 Gathered UP&L
Hot Springs (5)                                                Steam
Desert     Geo      10      10      Sparks,NV     1985  Not    Negot.   SPPC
Peak                                                    Fixed

United Kingdom
Teesside   Gas   1,875     289      Wilton,       1993  2008   Negot.   Various
Power                               England
Limited

Philippines
Upper      Geo     119     119      Leyte,        1996 CO+10   Build,   PNOC-EDC
Mahiao                              Philippines                Own     (GOP)(8)
(7)                                                            Transfer
Malitbog   Geo     216     216      Leyte,     1996-97 CO+10   Build,   PNOC-EDC
(7)                                 Philippines                Own     (GOP)(8)
                                                               Transfer
Mahanagdong Geo    165     149      Leyte,        1997 CO+10   Build,   PNOC-EDC
(7)                                 Philippines                Own     (GOP)(8)
                                                               Transfer

Total in         3,510   1,689
Operation

(1)Excludes royalty income received by Magma from the Mammoth and East Mesa
plants.
(2)Actual  MW may vary depending on operating and reservoir conditions  and
plant  design.  Facility  Net Capacity (in MW) for  projects  in  operation
represents  gross electric output of the facility less the parasitic  load.
Parasitic  load  is  electrical output used by the facility  and  not  made
available for sale to utilities or other outside purchasers. Net  MW  owned
indicates  current  ownership, but, in some cases,  does  not  reflect  the
current allocation of partnership distributions.
(3)With  respect to the Vulcan, Hoch (Del Ranch), Elmore, Leathers,  Salton
Sea  I,  Salton  Sea  II, Salton Sea III and Salton Sea IV  Projects,  this
represents nominal nameplate.
(4)Southern California Edison Company ("Edison"); San Diego Gas &  Electric
Company  ("SDG&E");  Utah  Power & Light Company ("UP&L");  Sierra  Pacific
Power  Company  ("SPPC")  ;  New  York State  Electric  &  Gas  Corporation
("NYSEG");  Texas Utilities Electric Company ("TUEC"); and  Niagara  Mohawk
Power  Corporation  ("NIMO"); PNOC-Energy Development  Corporation  ("PNOC-
EDC"); Government of Philippines ("GOP").
(5)Represents the electrical equivalent of delivered steam.
(6)The  Company  operates  all  such projects  other  than  Teesside  Power
Limited.
(7)Construction  of these facilities has been completed  and,  accordingly,
these  facilities have been "deemed complete" by PNOC-EDC and are currently
receiving the full capacity payments under the "take or pay" provisions  of
their  contracts  with  PNOC-EDC, pending NPC  making  available  to  these
projects a full capacity transmission line.
(8)Government of Philippines undertaking supports PNOC-EDC's obligations.
(9)Commercial Operation ("CO") plus number of years.



Projects in Construction

PROJECT    FUEL   FACILITY NET  LOCATION CONTRACT   CONTRACT  POWER   POLITICAL
           SOURCE NET      OWNER         EXPIRATION TYPE      PURCHASER RISK
                  CAPACITY INTEREST      (1)                  (2)      INSURANCE
                  (IN MW)  (IN MW)                                     AND
                  (5)                                                  PRIMARILY
                                                                       US$
                                                                       CONTRACT

United Kingdom
Viking      Gas     50      25    Seal      CO+10    Negot   Northern    No
                                  Sands on
                                  Teesside,
                                  England

Philippines
Casecnan    Hydro  150     105    Luzon,the CO+20    Build,  NIA         Yes
(4)                               Philippines        Own     (GOP)(3)
                                                     Transfer
Indonesia
Dieng        Geo    55      52    Central   CO+30    Build,  PLN         Yes
Unit                              Java,              Own,    (GOI)
I(6)                              Indonesia          Transfer
Dieng        Geo    80      75    Central   CO+30    Build,  PLN         Yes
Unit                              Java,              Own,   (GOI)
II(6)                             Indonesia          Transfer
Patuha       Geo    80      70    Western   CO+30    Build,  PLN         Yes
Unit                              Java,              Own,    (GOI)
I(6)                              Indonesia          Transfer

Total in           415     327
Construction


(1)Commercial Operation ("CO") plus number of years.
(2)Government  of  the  Philippines ("GOP"); P.T.  PLN  (Persero)  ("PLN");
Government   of  Indonesia  ("GOI");  and  Philippine  National  Irrigation
Administration ("NIA"), Northern Electric plc ("Northern").
(3)Government of the Philippines undertaking supports NIA's obligations.
(4)NIA also purchases water from this facility.
(5)Actual  MW may vary depending on operating and reservoir conditions  and
final  plant design. Significant contingencies exist in respect of  awards,
including  without  limitation, the need to obtain financing,  permits  and
licenses, and the completion of construction.
(6)See  discussion of uncertainties caused by recent actions of  Government
of Indonesia below.

Projects  with  Signed  Power Sales Contracts  or  Awarded  Development
Rights


PROJECT(S)  FUEL   FACILITY  NET      LOCATION  CONTRACT   CONTRACT   POWER
           SOURCE NET       OWNERSHIP          EXPIRATION TYPE       PURCHASER
                  CAPACITY  INTEREST           (2)                   (3)
                  (IN MW)   (IN MW)
                  (1)

United States

Salton Sea   Geo     49        49  Imperial      TBD        TBD        TBD
Sea Mineral                        Valley, CA
Extraction
Telephone    Geo     30        30  Siskiyou       CO+20     Negot.     BPA
Flat(7)                            County, CA

United Kingdom
Exeter       Gas     50        25  England        CO+10     Negot.    Northern

Philippines
Alto Peak    Geo     70        70  Leyte,the      CO+10     Build,    PNOC-EDC
                                   Philippines              Own,      (GOP)(4)
                                                            Transfer

Indonesia
Dieng        Geo    265       249  Central Java,  CO+30     Build,    PLN
Phase II                           Indonesia                Own,      (GOI)
(6)                                                         Transfer
Patuha       Geo    320       282  Western Java,  CO+30     Build,    PLN
Phase II                           Indonesia                Own,      (GOI)
                                                            Transfer
Bali(6)      Geo    400       240  Bali,          CO+30     Build,    PLN
                                   Indonesia                Own,      (GOI)
                                                            Transfer

Total             1,184       945
Contracted/Awarded


(1)Actual  MW may vary depending on operating and reservoir conditions  and
plant  design.   Facility  Net Capacity (in MW) represents  facility  gross
capacity (in MW) less parasitic load.  Parasitic load is electrical  output
used  by the facility and not made available for sale to utilities or other
outside purchasers.
(2)Commercial Operation ("CO") plus number of years.
(3)PNOC-Energy  Development  Corporation ("PNOC-EDC"),  Government  of  the
Philippines  ("GOP");  P.T. PLN (Persero)("PLN"); Government  of  Indonesia
("GOI");  Northern  Electric plc ("Northern"); Bonneville  Power  Authority
("BPA")
(4)Government   of   the   Philippines  undertaking   supports   PNOC-EDC's
obligations.
(5)Significant contingencies exist in respect of awards, including  without
limitation,  the  need to obtain financing, permits and licenses,  and  the
completion of construction.
(6)See  discussion  of  uncertainties  caused  by  recent  actions  by  the
Government of Indonesia below.
(7)The  Newberry project has been moved to Telephone Flat to take advantage
of  better  reservoir  conditions at the  latter  location.   A  settlement
agreement  has  been executed with BPA to recognize the  move,  subject  to
completion   of  certain  activities  including  an  environmental   impact
statement.




                         PROJECTS IN OPERATION

United States Operations

     The Coso Project

      In  1979, the Company entered into a 30-year contract (the  "Navy
Contract")  with the United States Department of the Navy (the  "Navy")
to  develop geothermal power facilities located on approximately  5,000
acres  of the Naval Air Weapons Station at China Lake, California  (150
miles  northeast of Los Angeles).  In 1985, the Company entered into  a
30-year  lease (the "BLM Lease") with the United States Bureau of  Land
Management  ("BLM") for approximately 19,000 acres of land adjacent  to
the  land covered by the Navy Contract.  The Navy Contract and the  BLM
Lease  provide  for certain royalty payments as a percentage  of  gross
revenue  and  certain other formulas.  The Company formed  three  joint
ventures  (the  "Coso Joint Ventures") with one primary  joint  venture
partner  to  develop and construct the three facilities which  comprise
the  Navy  I project (the "Navy I Project"), the BLM project (the  "BLM
Project") and the Navy II project (the "Navy II Project") (collectively
the "Coso Project").

      The  Coso  Joint  Ventures  are as  follows:   (i)  Coso  Finance
Partners,  which  owns the Navy I Project (the "Navy  I  Partnership"),
(ii)  Coso  Energy  Developers, which owns the BLM  Project  (the  "BLM
Partnership") and (iii) Coso Power Developers, which owns the  Navy  II
Project  (the  "Navy  II  Partnership").  The Company  holds  ownership
interests  of  46.4%,  48% and 50% in the Navy I Partnership,  the  BLM
Partnership,  and the Navy II Partnership, respectively.   The  Company
consolidates its respective share of the operating results of the  Coso
Joint  Ventures into its financial statements.  Each of the Coso  Joint
Ventures  is  managed by a management committee which consists  of  two
representatives of the Company and two representatives of the Company's
partners.   The  Company is the managing partner of each  of  the  Coso
Partnerships and operates the Coso Project, for which it receives  fees
from the Coso Joint Ventures.

     The Coso Project sells all electricity generated by the respective
plants  pursuant to three long-term SO4 Agreements between the  Navy  I
Partnership,   the  BLM  Partnership,  and  the  Navy  II  Partnership,
respectively,  and Edison.  These SO4 Agreements provide  for  capacity
payments,  capacity bonus payments and energy payments.   Edison  makes
fixed  annual capacity payments to the Coso Joint Ventures 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  fixed rates for the first ten  years  after  firm
operation and thereafter at Edison's Avoided Cost of Energy.  The fixed
price  periods of the 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.

      For  the  year ended December 31, 1997 and 1996 Edison's  average
Avoided  Cost of Energy was 3.3 cents and 2.5 cents, respectively,  per
kWh  which is substantially below the contract energy prices earned for
the year ended December 31, 1997.  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.

      On  June 9, 1997, Edison filed a complaint alleging breach of the
power  purchase  agreements ("SO4 Agreements") between Edison  and  the
Coso  Joint Ventures as a result of alleged improper venting of certain
noncondensible  gases at the Coso geothermal energy  project.   In  the
complaint,  Edison seeks unspecified damages, including the  refund  of
certain   amounts  previously  paid  under  the  SO4  Agreements,   and
termination of the SO4 Agreements.  In September 1997, the  Coso  Joint
Ventures and the Company filed a cross-complaint against Edison and its
affiliates,  The  Mission Group and Mission Power  Engineering  Company
alleging, among other things, that Edison's lawsuit violates  the  1993
settlement agreement which settled certain litigation arising from  the
construction of certain units at the Coso geothermal project by  Edison
affiliates.   In  addition, the Coso Joint Ventures  filed  a  separate
complaint against Edison alleging breach of the SO4 Agreements,  unfair
business practices, slander and various other tort and contract claims.
The  actions  were  effectively consolidated in December  1997.   As  a
result  of  certain procedural actions by the parties  and  a  November
court order, Edison filed an amended complaint on December 16, 1997 and
the  Coso Joint Ventures amended their cross-complaint.  The litigation
is  in  its  early procedural stages and the pleadings  have  not  been
settled.   The  Coso  Joint  Ventures believe  that  their  claims  and
defenses  are meritorious and that they will prevail if the  matter  is
ultimately  heard  on its merits.  The Coso Joint  Ventures  intend  to
vigorously defend this action and prosecute all available counterclaims
against Edison.

      Navy  I  Project.  The geothermal resource for the Navy I Project
currently is produced from approximately 35 wells.  The Navy I  Project
consists of three turbine generators, each with approximately 32  gross
MW of electrical generating capacity.

      BLM Project.  The BLM Project's geothermal resource currently  is
produced  from  approximately 24 wells.  The BLM  Project  consists  of
three  turbine generators.  Two of these turbine generators are located
at  the BLM East site in a dual flash system, and one is located at the
BLM  West  site  in  a  single flash system, each  with  an  electrical
generating capacity of 32 gross MW.

      Navy II Project.  The geothermal resource for the Navy II Project
currently is produced from approximately 23 wells.  The Navy II Project
consists   of   three   individual  turbine   generators,   each   with
approximately 32 gross MW of electrical generating capacity.

     Imperial Valley Project

      The  Company  currently operates eight geothermal plants  in  the
Imperial Valley in California (the "Imperial Valley Project").  Four of
these Imperial Valley Project plants (the "Partnership Projects")  were
developed by Magma which originally owned a 50% interest.  On April 17,
1996,  the  Company  completed  the  Partnership  Interest  Acquisition
pursuant  to which the Company acquired the remaining 50% interests  in
each  of  the  Partnership Projects for $70 million.   The  Partnership
Projects  consist of the Vulcan, Hoch (Del Ranch), Elmore and  Leathers
projects  (the  "Vulcan Project," the "Hoch (Del Ranch)  Project,"  the
"Elmore Project" and the "Leathers Project," respectively).

      The  remaining four operating Imperial Valley Project plants (the
"Salton  Sea  Projects")  are wholly owned by  subsidiaries  of  Magma.
Three  of these plants were purchased on March 31, 1993 from Union  Oil
Company  of California.  These geothermal power plants consist  of  the
Salton  Sea I project (the "Salton Sea I Project"), the Salton  Sea  II
project  (the "Salton Sea II Project") and the Salton Sea  III  project
(the  "Salton Sea III Project").  The fourth plant, the Salton  Sea  IV
project  (the "Salton Sea IV Project"), commenced commercial operations
in 1996.

     Vulcan.  The Vulcan Project sells electricity to Edison under a 30-
year  SO4  Agreement that commenced on February 10, 1986.   The  Vulcan
Project has a contract capacity and contract nameplate of 29.5  MW  and
34  MW, respectively.  Under the SO4 Agreement, Edison is obligated  to
pay the Vulcan Project a capacity payment, a capacity bonus payment and
an energy payment.

      The price for contract capacity payments is fixed for the life of
such  SO4  Agreement.  The as-available capacity price is  based  on  a
payment  schedule  as  approved by the CPUC from  time  to  time.   The
contract  energy payment increased each year for the first  ten  years,
which  period  expired  on February 9, 1996.   Thereafter,  the  energy
payments are based on Edison's Avoided Cost of Energy.

      Hoch (Del Ranch).  The Hoch (Del Ranch) Project sells electricity
to  Edison  under a 30-year SO4 Agreement that commenced on January  2,
1989.   The contract capacity and contract nameplate are 34 MW  and  38
MW,   respectively.    The  provisions  of  such  SO4   Agreement   are
substantially the same as the SO4 Agreement with respect to the  Vulcan
Project.

      The price for contract capacity payments is fixed for the life of
the  SO4 Agreement.  The fixed price period for energy payments per kWh
expires on January 1, 1999.  After January 1, 1999, the energy payments
will be based on Edison's Avoided Cost.

     Elmore.  The Elmore Project sells electricity to Edison under a 30-
year  SO4  Agreement that commenced on January 1, 1989.   The  contract
capacity and contract nameplate are 34 MW and 38 MW, respectively.  The
provisions of such SO4 Agreement are substantially the same as the  SO4
Agreement with respect to the Vulcan Project.

      The price for contract capacity payments is fixed for the life of
SO4  Agreement.   The fixed price period for energy  payments  per  kWh
expires  on  December 31, 1998.  After December 31,  1998,  the  energy
payments will be based on Edison's Avoided Cost of Energy.

      Leathers.   The  Leathers  Project sells  electricity  to  Edison
pursuant to a 30-year SO4 Agreement that commenced on January 1,  1990.
The  contract  capacity and contract nameplate are 34  MW  and  38  MW,
respectively.   The provisions of such SO4 Agreement are  substantially
the same as the SO4 Agreement with respect to the Vulcan Project.

      The price for contract capacity payments is fixed for the life of
SO4  Agreement  which  expires on December 31, 1999.   Thereafter,  the
energy payments will be based on Edison's Avoided Cost of Energy.

      Salton Sea I Project.  The Salton Sea I Project sells electricity
to Edison pursuant to a 30-year negotiated power purchase agreement, as
amended  (the "Salton Sea I PPA"), which provides capacity  and  energy
payments.  The contract capacity and contract nameplate are each 10 MW.

      The capacity payment is based on the firm capacity price which is
currently  $132.58kW-year.   The  contract  capacity  payment   adjusts
quarterly  based  on a basket of energy indices for  the  term  of  the
Salton Sea I PPA.  The energy payment is calculated using a Base  Price
(defined  as the initial value of the energy payment (4.701 center  per
kWh  for  the  second quarter of 1992)), which is subject to  quarterly
adjustments  based  on a basket of indices.  The time  period  weighted
average  energy payment for Salton Sea I was 5.3 cents per  kWh  during
1997.   As  the  Salton Sea I PPA is not an SO4 Agreement,  the  energy
payments do not revert to Edison's Avoided Cost of Energy.

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

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

      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.

     U.S. Gas Projects

      Yuma  Project.  The Yuma Project is a 50 net MW natural gas-fired
cogeneration project in Yuma, Arizona providing 50 MW of electricity to
San  Diego  Gas & Electric Company ("SDG&E") under an existing  30-year
power purchase contract.  The energy is sold at SDG&E's Avoided Cost of
Energy and the capacity is sold to SDG&E at a fixed price for the  life
of  the  power purchase contract.  The power is wheeled to  SDG&E  over
transmission  lines  constructed and owned by  Arizona  Public  Service
Company  ("APS").   An  agreement  for  interconnection  and   a   firm
transmission service agreement have been executed between APS  and  the
Yuma Project entity and have been accepted for filing by the FERC.

      The Yuma Project commenced commercial operation in May 1994.  The
project  entity  has executed steam sales contracts  with  an  adjacent
industrial  entity  to act as its thermal host.  Since  the  industrial
entity  has  the right under its agreement to terminate  the  agreement
upon  one  year's notice if a change in its technology  eliminates  its
need  for steam, and in any case to terminate the agreement at any time
upon  three  years  notice, there can be no  assurance  that  the  Yuma
Project  will maintain its status as a QF.  However, if the  industrial
entity  terminates the agreement, the Company anticipates that it  will
be  able to locate an alternative thermal host in order to maintain its
status as a QF.  A natural gas supply and transportation agreement  has
been  executed with Southwest Gas Corporation, terminable under certain
circumstances by the Company and Southwest Gas Corporation.   The  Yuma
Project is unleveraged other than intercompany debt.

      Saranac  Project.   Saranac is a 240  net  MW  natural  gas-fired
cogeneration  facility located in Plattsburgh, New  York,  which  began
commercial operation in June 1994.  Saranac has entered into a  15-year
power purchase agreement (the "Saranac PPA") with NYSEG.  Saranac is  a
QF and has entered into 15-year steam purchase agreements (the "Saranac
Steam  Purchase  Agreements")  with  Georgia-Pacific  Corporation   and
Tenneco  Packaging,  Inc.   Saranac has a 15-year  natural  gas  supply
contract (the "Saranac Gas Supply Agreement") with Shell Canada Limited
("Shell Canada") to supply 100% of Saranac's fuel requirements.   Shell
Canada is responsible for production and delivery of natural gas to the
U.S.-Canadian border; the gas is then transported by the North  Country
Gas  Pipeline Corporation ("NCGP") the remaining 22 miles to the plant.
NCGP  is a wholly-owned subsidiary of Saranac Power Partners, L.P. (the
"Saranac  Partnership"), which also owns Saranac.  NCGP also transports
gas for NYSEG and Georgia-Pacific.

     Each of the Saranac PPA, the Saranac Steam Purchase Agreements and
the  Saranac Gas Supply Agreement contains rates that are fixed for the
respective  contract terms.  Revenues escalate at a  higher  rate  than
fuel  costs.  The Saranac Partnership is owned by subsidiaries  of  the
Company,  Tomen  Corporation ("Tomen"), and  General  Electric  Capital
Corporation.

      On February 14, 1995, NYSEG filed with the FERC a Petition for  a
Declaratory Order, Complaint, and Request for Modification of Rates  in
Power  Purchase  Agreements  Imposed Pursuant  to  the  Public  Utility
Regulatory  Policies  Act  of 1978 ("Petition")  seeking  FERC  (i)  to
declare  that  the rates NYSEG pays under the Saranac  PPA,  which  was
approved by the New York Public Service Commission (the "PSC"), were in
excess of the level permitted under PURPA and (ii) to authorize the PSC
to  reform the Saranac PPA.  On March 14, 1995, the Saranac Partnership
intervened  in opposition to the Petition asserting, Inter  alia,  that
the  Saranac  PPA  fully complied with PURPA, that NYSEG's  action  was
untimely and that the FERC lacked authority to modify the Saranac  PPA.
On  March  15, 1995, the Company intervened also in opposition  to  the
Petition  and asserted similar arguments.  On April 12, 1995, the  FERC
by a unanimous (5-0) decision issued an order denying the various forms
of  relief requested by NYSEG and finding that the rates required under
the  Saranac PPA were consistent with PURPA and the FERC's regulations.
On  May 11, 1995, NYSEG requested rehearing of the order and, by  order
issued  July  19,  1995,  the  FERC unanimously  (5-0)  denied  NYSEG's
request.  On June 14, 1995, NYSEG petitioned the United States Court of
Appeals  for the District of Columbia Circuit (the "Court of  Appeals")
for  review  of  FERC's April 12, 1995 order.  FERC  moved  to  dismiss
NYSEG's petition for review on July 28, 1995.  On October 30, 1996, all
parties  filed  final  briefs  and the  Court  of  Appeals  heard  oral
arguments on December 2, 1996.  On July 11, 1997, the Court of  Appeals
dismissed  NYSEG's  appeal  from  FERC's  denial  of  the  petition  on
jurisdictional grounds.

      On  August 7, 1997, NYSEG filed a complaint in the U.S.  District
Court  for the Northern District of New York against the FERC, the  PSC
(and the Chairman, Deputy Chairman and the Commissioners of the PSC  as
individuals  in  their official capacity), the Saranac Partnership  and
Lockport  Energy  Associates, L.P. ("Lockport")  concerning  the  power
purchase  agreements that NYSEG entered into with Saranac Partners  and
Lockport.

      NYSEG's  suit  asserts  that  the PSC  and  the  FERC  improperly
implemented  PURPA  in authorizing the pricing terms  that  NYSEG,  the
Saranac  Partnership  and Lockport agreed to in those  contracts.   The
action raises similar legal arguments to those rejected by the FERC  in
its April and July 1995 orders.  NYSEG in addition asks for retroactive
reformation of the contracts as of the date of commercial operation and
seeks  a  refund of $281 million from the Saranac Partnership.  Saranac
and  other parties have filed motions to dismiss and oral arguments  on
those  motions  were  heard on March 2, 1998.   Saranac  believes  that
NYSEG's claims are without merit for the same reasons described in  the
FERC's orders.

      Power Resources Project.  Power Resources is a 200 net MW natural
gas-fired  cogeneration project located near Big Spring,  Texas,  which
has a 15-year power purchase agreement (the "Power Resources PPA") with
Texas  Utilities  Electric Company.  Power Resources  began  commercial
operation in June 1988.  Power Resources is a QF and has entered into a
15-year  steam purchase agreement (the "Power Resources Steam  Purchase
Agreement")  with Fina Oil and Chemical Company ("Fina"), a  subsidiary
of Petrofina S.A. of Belgium.

      Power  Resources  has entered into an agreement  (the  "FSGC  Gas
Supply Agreement") with Falcon Seaboard Gas Company ("FSGC") for  Power
Resources' fuel requirements through December 2003.  FSGC has fulfilled
its  commitments  to  Power Resources, Inc. ("PRI")  to  date  using  a
combination of spot purchases plus short-term contracts.  In June 1995,
FSGC and Louis Dreyfus Natural Gas Corp. ("Dreyfus") executed an eight-
year  natural  gas  supply  agreement  (the  "FSGC-Dreyfus  Gas  Supply
Agreement"), with which FSGC will fulfill its supply commitment to  PRI
from  October  1995 to the end of the term of the Power Resources  PPA.
Accordingly,  through the FSGC-Dreyfus Gas Supply  Agreement,  all  gas
requirements  have been contracted for through the  end  of  the  Power
Resources PPA.

      Each  of  the  Power  Resources PPA, the  Power  Resources  Steam
Purchase  Agreement  and the FSGC Gas Supply Agreement  contains  rates
that are fixed for the respective contract terms.  Revenues escalate at
a higher rate than fuel costs.

      NorCon  Project.   NorCon  is  an 80  net  MW  natural  gas-fired
cogeneration facility located in North East, Pennsylvania  which  began
commercial  operation in December 1992.  NorCon  has  a  25-year  power
purchase  agreement  (the  "NorCon  PPA")  with  Niagara  Mohawk  Power
Corporation  ("NIMO").  NorCon is a QF and has entered into  a  20-year
steam  purchase agreement (the "NorCon Thermal Energy Agreement")  with
Welch Foods Inc., a Cooperative ("Welch Foods").

      NorCon has a 15-year natural gas supply contract (the "NorCon Gas
Purchase  Agreement") with Louis Dreyfus Gas Marketing Corp. to  supply
100%  of  NorCon's  fuel  requirements.   A  twenty-year  natural   gas
transportation agreement has been entered into with National  Fuel  Gas
Supply  Corporation  ("National Fuel")  to  provide  transportation  to
NorCon.   Transportation costs are deducted from payments made pursuant
to  the  NorCon Gas Purchase Agreement.  The NorCon PPA has rates  that
are  subject  to  a specified floor amount.  The NorCon Thermal  Energy
Agreement contains rates that escalate at an inflation-based index, and
the  NorCon  Gas Purchase Agreement's rates are fixed for the  contract
term.

      NorCon  Power  Partners, L.P. ("the "NorCon Partnership"),  which
owns NorCon, is owned by subsidiaries of the Company and Tomen.

      The  NorCon  project  has  had a number of  on-going  contractual
disputes  with  NIMO  which are unresolved  and  in  August  1996  NIMO
proposed  a buyout of the NorCon PPA as part of a generic restructuring
by  NIMO of all of its QF contracts in an effort to restructure  NIMO's
purchased   power  obligations  to  meet  the  challenge  of   industry
deregulation and avoid what NIMO alleges as the risk of a possible NIMO
insolvency.  The Company believes that any contractual restructuring or
even a NIMO insolvency would not have a material adverse effect on  its
consolidated financial results of operations.

     Other U.S. Geothermal Operations

       Roosevelt  Hot  Springs.   The  Company  operates  and  owns  an
approximately 70% indirect 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  $20.3  million of 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  currently  the
operator,  of  a  10  net MW geothermal plant at Sparks,  Nevada.   The
Desert  Peak  Project has been selling electricity  to  Sierra  Pacific
Power  Company  ("SPPC") on a spot market basis since its  power  sales
contract  with  SPPC expired December 31, 1995.  The  Company  recently
executed an agreement pursuant to which the Desert Peak Project will be
leased  to  a  third party power producer and the Company will  receive
rental payments.

     Royalty Interests

      Mammoth.  Magma receives royalty revenues from a 10 net MW and  a
12 net MW contract nameplate geothermal power plant (the "First Mammoth
Plant"  and  the "Second Mammoth Plant," respectively, and referred  to
herein,  collectively,  as  the "Mammoth  Plants")  at  Mammoth  Lakes,
California.   Electricity from the Mammoth Plants  is  sold  to  Edison
under two long-term power purchase agreements.  The First Mammoth Plant
and  the  Second Mammoth Plant began commercial operation in  1985  and
1991,   respectively.   Magma  leases  both  property  and   geothermal
resources  to  support the Mammoth Plants in return  for  certain  base
royalty  and bonus royalty payments.  For the First Mammoth  Plant  and
the   Second  Mammoth  Plant,  the  base  royalty  is  12.5%  and  12%,
respectively,  of gross electricity sales revenues.  The bonus  royalty
for the Mammoth Plants is 50% of the excess of annual gross electricity
sales  revenues  over an annual revenue standard based on  the  Mammoth
Plants operating at 85% of contract capacity.

      East Mesa.  Magma also receives royalty revenues from a 37 net MW
contract nameplate geothermal power plant (with two units) at East Mesa
in  Imperial Valley, California (the "East Mesa Project").  Electricity
from  the  plant has been sold to Edison pursuant to two SO4 Agreements
formerly  held  by  Magma.   The East Mesa  Project  participants  have
executed  an  agreement  with Edison to terminate  the  SO4  Agreement.
Pursuant   to   a  Settlement  Agreement,  Magma  consented   to   such
termination.

United Kingdom Operations and Construction

      In  the  United Kingdom, a Northern subsidiary, Northern Electric
Generation  Limited  ("Northern Generation"),  focuses  on  electricity
generation,  primarily  through its ownership  in  Teesside  (described
herein).   Northern  Generation  also operates  a  5  MW  diesel  power
generating plant located in Northallerton, England in which the Company
has a 3 MW net ownership interest.

      Teesside.  Teesside Power Limited ("Teesside") owns and  operates
an  1,875  net  MW  combined cycle gas-fired  power  plant  at  Wilton.
Northern  owns a 15.4% interest in Teesside, but does not  operate  the
plant.  Northern purchases 400 MW of electricity from Teesside under  a
long-term power purchase agreement.

     Viking.  Viking Power Limited ("Viking") is a company owned 50% by
Northern and 50% by Rolls-Royce Power Ventures.  Viking is a project to
construct  a 50 net MW natural gas-fired power plant at Seal  Sands  on
Teesside.   The  project  will  utilize an aero-derivative  Rolls-Royce
Trent  Engine  and  it  will be embedded on the  Northern  distribution
network.   Construction has commenced on the plant and the  project  is
being  managed  by  Northern  and will be  operated  by  Northern  upon
commercial operation.

The Philippines Operations and Construction

      Upper Mahiao.  The Upper Mahiao facility was "deemed complete" by
PNOC-EDC as of June 17, 1996, meaning that construction of the facility
was  completed on time but the required full capacity transmission line
was  not  completed and provided to CE Cebu Geothermal  Power  Company,
Inc.  ("CE  Cebu"),  a Philippine corporation that is  100%  indirectly
owned  by  the Company.  During deemed completion, PNOC-EDC is required
to  pay  all  capacity  fees under the take or pay  provisions  of  the
contract.   PNOC-EDC is paying such capacity fees on  a  timely  basis.
Effective September 13, 1996, the "deemed completion" was modified,  to
allow delivery of up to 40 MW of power through a temporary transmission
facility.   This amendment allows for payment to CE Cebu  of  fees  for
energy  delivered in addition to continuing the payment  for  the  full
capacity fee.

      A  consortium  of  international banks provided the  construction
loans, supported by political risk insurance from the Ex-Im Bank.   The
construction  loan is expected to be converted to a term loan  promptly
after   NPC  completes  the  full  capacity  transmission  line.    The
transmission line is currently being tested and testing is expected  to
be completed in the second quarter of 1998.

      Under  the  terms of an energy conversion agreement, executed  on
September  6,  1993  (the "Upper Mahiao ECA"), CE  Cebu  will  own  and
operate  the  Upper  Mahiao  Project during  the  ten-year  cooperation
period,  after  which ownership will be transferred to PNOC-EDC  at  no
cost.

      The  Upper Mahiao Project is located on land provided by PNOC-EDC
at no cost.  It takes geothermal steam and fluid, also provided by PNOC-
EDC  at no cost, and converts its thermal energy into electrical energy
sold  to PNOC-EDC on a "take-or-pay" basis.  Specifically, PNOC-EDC  is
obligated  to  pay for 100% of the 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).   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.  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.

      The  payment of the Capacity Fee is not excused if PNOC-EDC fails
to  deliver  or  remove  the steam or fluids or fails  to  provide  the
transmission  facilities, even if its failure was  caused  by  a  force
majeure  event.  In addition, PNOC-EDC must continue to  make  Capacity
Fee   payments  if  there  is  a  force  majeure  event   (e.g.,   war,
nationalization, etc.) that affects the operation of the  Upper  Mahiao
Project  and that is within the reasonable control of PNOC-EDC  or  the
Government of the Philippines or any agency or authority thereof.

      PNOC-EDC  is  obligated  to purchase CE Cebu's  interest  in  the
facility  under  certain circumstances, including (i) extended  outages
resulting  from  the  failure  of  PNOC-EDC  to  provide  the  required
geothermal  fluid, (ii) certain material changes in  policies  or  laws
which  adversely  affect  CE  Cebu's interest  in  the  project,  (iii)
transmission failure, (iv) failure of PNOC-EDC to make timely  payments
of  amounts due under the Upper Mahiao ECA, (v) privatization of  PNOC-
EDC  or NPC, and (vi) certain other events.  The price will be the  net
present  value  (at  a  discount  rate  based  on  the  last  published
Commercial  Interest  Reference Rate of the Organization  for  Economic
Cooperation and Development) of the total remaining amount of  Capacity
Fees over the remaining term of the Upper Mahiao ECA.

      Mahanagdong.  The Mahanagdong Project is a 165 net MW  geothermal
power  project owned and operated by CE Luzon Geothermal Power Company,
Inc.   ("CE  Luzon"), a Philippine corporation that is  currently  100%
indirectly owned by the Company.  Up to a 10% financial interest in  CE
Luzon  may be purchased at completion by another industrial company  at
the  option  of  such  company.  The Mahanagdong  Project  was  "deemed
complete"  by  PNOC-EDC as of July 25, 1997.  The  Mahanagdong  Project
will  sell  100% of its capacity on a similar basis as described  above
for  the Upper Mahiao Project to PNOC-EDC, which will in turn sell  the
power to NPC for distribution to the island of Luzon.

     The project financing construction and term loan is being provided
by OPIC, Ex-Im Bank and a consortium of international banks.  Political
risk  insurance  from Ex-Im Bank has been obtained for  the  commercial
lenders.  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 to be in the second quarter of 1998.

     The terms of an energy conversion agreement, executed on September
18, 1993 (the "Mahanagdong ECA"), are substantially similar to those of
the   Upper   Mahiao  ECA.   The  Mahanagdong  ECA  provides   for   an
approximately three-year construction period and a ten-year cooperation
period.   At  the end of the cooperation period, the facility  will  be
transferred  to  PNOC-EDC  at no cost.  All of  PNOC-EDC's  obligations
under  the  Mahanagdong  ECA are supported by  the  Government  of  the
Philippines through a performance undertaking.  The capacity  fees  are
expected  to  be  approximately 97% of total  revenues  at  the  design
capacity levels and the energy fees are expected to be approximately 3%
of such total revenues.

     Malitbog.  The Malitbog Project is a 216 net MW geothermal project
owned  and  operated  by Visayas Geothermal Power Company  ("VGPC"),  a
Philippine general partnership that is wholly owned, indirectly, by the
Company.   The  three  Units  of  the Malitbog  facility  were  "deemed
complete"  by  PNOC-EDC as of July 25, 1996 (for Unit I) and  July  25,
1997  (for  Units II and III).  During deemed completion,  PNOC-EDC  is
required to pay, and has been paying, all capacity fees under the  take
or  pay  provisions  of  the contract.  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
NPC.

      A  consortium of international banks and OPIC have  provided  the
construction  and  term  loan facilities.   The  construction  loan  is
expected  to  be converted to a term loan promptly after NPC  completes
the  full  capacity  transmission  line.   The  transmission  line   is
currently being tested and testing is expected to be completed  in  the
second quarter of 1998.

     The Malitbog Project is located on land provided by PNOC-EDC at no
cost.   The electrical energy produced by the facility will be sold  to
PNOC-EDC  on a take-or-pay basis.  Specifically, PNOC-EDC is  obligated
to  make  payments  (the "Capacity Payments") to VGPC  based  upon  the
available  capacity  of  the Malitbog Project.  The  Capacity  Payments
equal approximately 100% of total revenues.  The Capacity Payments will
be  payable  so  long as the Malitbog Project is available  to  produce
electricity,  even  if  the Malitbog Project is not  operating  due  to
scheduled  maintenance, because PNOC-EDC fails to supply steam  to  the
Malitbog Project as required or because NPC is unable (or unwilling) to
accept delivery of electricity from the Malitbog Project.  In addition,
PNOC-EDC  must  continue to make the Capacity Payments if  there  is  a
force majeure event (e.g., war, nationalization, etc.) that affects the
operation  of  the Malitbog Project and that is within  the  reasonable
control of PNOC-EDC or the Government of the Philippines or any  agency
or  authority thereof.  A substantial majority of the Capacity Payments
are  required  to  be  made  by PNOC-EDC in dollars.   The  portion  of
Capacity Payments payable to PNOC-EDC in pesos is expected to vary over
the  term of the Malitbog ECA from 10% of VGPC's revenues in the  early
years  of  the Cooperation Period (as defined below) to 23%  of  VGPC's
revenues at the end of the Cooperation Period.  Payments made in  pesos
will generally be made to a peso-dominated account and will be used  to
pay peso-denominated operation and maintenance expenses with respect to
the  Malitbog Project and Philippine withholding taxes, if any, on  the
Malitbog Project's debt service.  The Government of the Philippines has
entered into a performance undertaking (the "Performance Undertaking"),
which  provides  that  all of PNOC-EDC's obligations  pursuant  to  the
Malitbog  ECA carry the full faith and credit of, and are affirmed  and
guaranteed by, the Government of the Philippines.

      PNOC-EDC is obligated to purchase VGPC's interest in the facility
under certain circumstances, including (i) certain material changes  in
policies or laws which adversely affect VGPC's interest in the project,
(ii)  any event of force majeure which delays performance by more  than
90  days  and (iii) certain other events.  The price will  be  the  net
present  value of the capital cost recovery fees that would  have  been
due  for  the remainder of the Cooperation Period with respect to  such
generating unit(s).

      The  Malitbog ECA cooperation period will expire ten years  after
the  date of commencement of commercial operation of Unit III.  At  the
end of the cooperation period, the facility will be transferred to PNOC-
EDC  at  no  cost, on an "as is" basis.  All of PNOC-EDC's  obligations
under  the  Malitbog  ECA  are  supported  by  the  Government  of  the
Philippines through a performance undertaking.  The capacity  fees  are
100% of total revenues and there is no energy fee.

      Casecnan.  In November 1995, the Company closed the financing and
commenced  construction of the Casecnan Project, a combined  irrigation
and  150  net MW hydroelectric power generation project (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  into
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  of  two
downstream existing hydroelectric facilities of the NPC.

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

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

      In  connection with the Hanbo Contract termination,  CE  Casecnan
tendered a certificate of drawing to Korea First Bank ("KFB") on May 7,
1997  under the irrevocable standby letter of credit issued by  KFB  as
security  under the Hanbo Contract to pay for certain transition  costs
and other presently ascertainable damages under the Hanbo Contract.  As
a  result  of KFB's dishonor of the draw request, CE Casecnan filed  an
action  in  New  York  State Court.  That Court granted  CE  Casecnan's
request  for  a  temporary restraining order requiring KFB  to  deposit
$79,329,000,  the amount of the requested draw, in an interest  bearing
account with an independent financial institution in the United States.
KFB  appealed  this order, but the appellate court denied KFB's  appeal
and on May 19, 1997, KFB transferred funds in the amount of $79,329,000
to a segregated New York bank account pursuant to the Court order.

      On  August  6, 1997, CE Casecnan announced that it had  issued  a
notice  to  proceed  to  the Replacement Contractor.   The  Replacement
Contractor  was  already  on site and thereafter  fully  mobilized  and
commenced  engineering,  procurement  and  construction  work  on   the
project.

      On  or  about  August 27, 1997 CE Casecnan received  a  favorable
summary  judgment  ruling in New York State  Court  against  KFB.   The
judgment,  which has been appealed by the bank, requires KFB  to  honor
the  $79,329,000 drawing by CE Casecnan on the $117,850,000 irrevocable
standby letter of credit.

      On  September 29, 1997, CE Casecnan tendered a second certificate
of drawing for $10,828,000 to KFB and on December 30, 1997, CE Casecnan
tendered  a  third certificate of drawing for $2,920,000 to  KFB.   KFB
also  wrongfully dishonored these draws, but pursuant to a  stipulation
agreed to deposit the draw amounts in an interest bearing account  with
the same independent financial institution in the United States pending
resolution  of  the  appeal  regarding the first  draw  and  agreed  to
expedite the appeal.

      The  receipt  of  the  letter of credit funds  from  KFB  remains
essential and CE Casecnan will continue to press KFB to honor its clear
obligations under the letter of credit and to pursue Hanbo and KFB  for
any  additional damages arising out of their actions to date.   If  KFB
were  to  fail to honor its obligations, under the Casecnan  letter  of
credit,  such  action  could  have a material  adverse  effect  on  the
Casecnan Project and CE Casecnan.

      On  September  2,  1997,  Hanbo and  HECC  filed  a  Request  for
Arbitration before the International Chamber of Commerce ("ICC").   The
Request  for  Arbitration  asserts various claims  by  Hanbo  and  HECC
against CE Casecnan relating to the terminated Hanbo Contract and seeks
damages.   On  October  10, 1997, CE Casecnan  served  its  answer  and
defenses  in  response  to  the Request  for  Arbitration  as  well  as
counterclaims  against  Hanbo  and  HECC  for  breaches  of  the  Hanbo
Contract.   The arbitration proceedings before the ICC are ongoing  and
CE Casecnan intends to pursue vigorously its claims against Hanbo, HECC
and KFB in the proceedings described above.

Indonesia Operations and Construction

     Dieng.  On December 2, 1994, a subsidiary of the Company, Himpurna
California Energy Ltd. ("HCE") executed a joint operation contract (the
"JOC") for the development of the geothermal steam field and geothermal
power facilities at the Dieng geothermal field, located in Central Java
(the  "Dieng Project") with Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara ("Pertamina"), the Indonesian national oil company, and executed
a  "take-or-pay" energy sales contract (the "ESC") with both  Pertamina
and  PLN,  the  Indonesian national electric utility.  HCE  was  formed
pursuant  to a joint development agreement with P.T. Himpurna Enersindo
Abadi  ("P.T.  HEA"), its Indonesian partner, which is a subsidiary  of
Himpurna,  an association of Indonesian military veterans, whereby  the
Company and P.T. HEA have agreed to work together on an exclusive basis
to  develop  the Dieng Project (the "Dieng Joint Venture").  Subsequent
to closing the KDG Acquisition in January 1998, the Dieng Joint Venture
is  structured with subsidiaries of the Company holding an  approximate
94%   interest  (including  certain  assignments  of  dividend   rights
representing  an economic interest of 4%), and P.T. HEA  holding  a  6%
interest in the Dieng Project.

      All  government approvals for Units I (55 net MW) and II (80  net
MW)  necessary  for closing were received, including a  support  letter
from  the  Republic  of  Indonesia, an off-shore loan  board  approval,
consents  to  assignment  from  the  Republic  of  Indonesia,  PLN  and
Pertamina, and all required environmental approvals.  Financial closing
for  Unit I occurred on October 3, 1996, and construction for financing
for Unit II was funded on November 17, 1997.

      Pursuant to the Dieng JOC and ESC, Pertamina has granted  to  HCE
the  geothermal  field  and  the wells and other  facilities  presently
located  thereon  and HCE will build, own and operate power  production
units with an aggregate capacity of up to 400 MW.  HCE will accept  the
field  operation  responsibility  for  developing  and  supplying   the
geothermal steam and fluids required to operate the plant.

      The Dieng JOC is structured as a build own transfer agreement and
will  expire  (subject to extension by mutual agreement)  on  the  date
which is the later of (i) 42 years following effectiveness of the Dieng
JOC  and (ii) 30 years following the date of commencement of commercial
generation  of  the final unit.  Upon the expiration  of  the  proposed
Dieng  JOC, all facilities will be transferred to Pertamina at no cost.
HCE  is required to pay Pertamina a production allowance equal to three
percent of HCE's net operating income from the Dieng Project.

      Pursuant to the Dieng ESC, PLN agreed to purchase and pay for all
of  the  Project's capacity and energy output on a "take or pay"  basis
regardless  of PLN's ability to accept such energy made available  from
the Dieng Project for a term equal to that of the Dieng JOC.  The price
paid for electricity includes a base energy price per kWh multiplied by
the  number  of kWhs the plants deliver or are "capable of delivering",
whichever  is  greater.   Energy price payments  are  also  subject  to
adjustment  for inflation.  PLN will also pay a capacity payment  based
on plant capacity.  All such payments are payable in U.S. dollars.

     PT Kiewit/Holt Indonesia, an affiliate of PKS, executed agreements
to  construct Dieng Unit I and Unit II pursuant to a fixed price,  date
certain, turnkey construction contract.  Affiliates of PKS will provide
the engineered supply with respect to Dieng Unit I and Unit II pursuant
to a fixed price, date certain, turnkey supply contract.

      Patuha.   The  Company's subsidiary, Patuha Power,  Ltd.  ("PPL")
executed  a  JOC  and  ESC  with Pertamina  and  PLN,  respectively  on
substantially the same terms as the Dieng project.  The Patuha  project
is located in Western Java.  All government approvals for Patuha Unit I
(80  net  MW) necessary for closing were received, including a  support
letter from the Republic of Indonesia, on offshore loan board approval,
consents  to  assignment  from  the  Republic  of  Indonesia,  PLN  and
Pertamina,  and  all  required environmental  approvals.   Construction
financing was funded for Patuha Unit I in September 1997.  Patuha  Unit
I  is being constructed by PT Kiewit/Holt Indonesia pursuant to a fixed
price, date certain, turnkey construction contract.  Affiliates of  PKS
will  provide engineered supply with respect to Patuha Unit I  pursuant
to a fixed price, date certain, turnkey supply contract.

      Bali.   Significant infrastructure construction and well drilling
has  occurred  at the Bali site, but power plant construction  has  not
commenced.

      On about June 12, 1997, the Company's special purpose subsidiary,
CE  Indonesia  Funding  Corp., entered into a  $400  million  revolving
credit  facility (which is nonrecourse to the Company) to  finance  the
development   and  construction  of  the  Company's  geothermal   power
facilities in Indonesia.  Funding under such facility has occurred  for
Dieng Unit I, Dieng Unit II and Patuha Unit I.

       Recent   Presidential   Decrees  in   Indonesia   have   created
uncertainties  regarding the Company's Indonesian activities  resulting
in  the Company recognizing an $87 million non-recurring charge in  the
fourth  quarter of 1997.  The Company is proceeding cautiously  and  is
actively  pursuing  resolution of the issues involving  the  Indonesian
projects  in order to protect the Company's interests.  Less than  five
percent  of the Company's total assets are invested in Indonesia.   The
Company  intends to take all actions necessary to ensure the Government
of Indonesia honors the project contracts.

      Economies  of emerging countries typically experience periods  of
success  and  periods of setback.  The Company's projects  in  emerging
regions  have been and will continue to be structured to minimize  risk
and have consistently obtained political risk insurance for investments
and  sovereign guarantees for our projects in Indonesia.  In  addition,
payments in accordance with the project contracts, are in U.S.  dollars
and therefore are not directly affected by local currency fluctuations.


                        PROJECTS IN DEVELOPMENT

      The  following  is  a summary description of certain  information
concerning  the  Company's advanced stage development  projects.  Since
these projects are still in development there can be no assurance  that
this  information  will not change materially over time.  In  addition,
there  can  be no assurance that development efforts on any  particular
project,  or  the  Company's  development efforts  generally,  will  be
successful.  See  also  "Risk Factors" contained  in  the  accompanying
Prospectus.

United States

      Salton  Sea  Minerals  Extraction. The Company  has  developed  a
process  providing  for  the extraction of minerals  from  elements  in
solution  in  the geothermal brine and fluids utilized at its  Imperial
Valley  plants  (the "Salton Sea Extraction Project") as  well  as  the
production  of power to be used in the extraction process. The  initial
phase of the project would require delivery of at least 15 MW of power.
A  pilot plant has successfully produced commercial quality zinc at the
Company's  Imperial  Valley  Project.   Zinc  is  primarily   used   in
galvanizing  steel  for  use in the automobile  industry.  The  Company
intends  to sequentially develop manganese, silver, gold, lead,  boron,
lithium  and  other  products  as it further  develops  the  extraction
technology.  If successfully developed, the mineral extraction  process
will  provide  an  environmentally responsible and  low  cost  minerals
recovery  methodology.  The  Company is  also  investigating  producing
silica  from  the  solids  precipitated out  of  the  geothermal  power
process.  Silica  is  used  as a filler for  such  products  as  paint,
plastics and high temperature cement.

     Telephone Flat. 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 (the "Telephone Flat
Project"). The BPA contract arrangements have been amended to reflect the
relocation of the project to Telephone Flat in Northern California where
the Company has two successful production wells.  Under the amended BPA
contract arrangements, BPA will purchase 30 MW from the project and has an
option to purchase an additional 100 MW. 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.

United Kingdom

      Exeter. Exeter Power Limited ("Exeter") is a company owned 50% by
Northern  Electric  Generation Limited and  50%  by  Rolls-Royce  Power
Ventures.  Exeter is developing a 50 net MW gas-fired  power  plant  at
Exeter, England. This project is based upon the U.K. "Mid-merit"  model
(described  below) and will be managed and operated  by  Northern  upon
commercial operation. The power purchase contract and permits  for  the
project are currently being finalized.

     U.K. Mid-merit Projects. The Company, through Northern Generation,
is  pursuing a number of "Mid-merit" project opportunities in  addition
to Exeter and Viking (which is under construction), in conjunction with
and  separate from Rolls-Royce. "Mid-merit" projects are those projects
which  have generation units having a registered capacity of 50 net  MW
or  less.  As  a  result,  these projects only require  local  planning
permission  and limited central government permits. In addition,  these
projects  are connected to the local distribution system  and  not  the
National Grid, which means these projects do not have to be a member of
the Pool and pay generator related grid and Pool charges.

      These  Mid-merit  generating projects are  also  not  subject  to
central  dispatch  by  the National Grid and therefore  allow  for  the
potential  of  gas  arbitrage  between the electricity  day-ahead  pool
market  and  the within-day gas spot market. Northern supplies  gas  to
these projects through a gas tolling contract arrangement.

      Finally,  these  projects are based on open (simple)  cycle  aero
derivative gas turbines which are ideally suited to multiple start/stop
operations.  This  flexible  capability provides  significant  economic
benefits   to   Northern's  electricity  supply  business   in   buying
electricity  from  the Mid-merit plant and avoiding pool  purchases  at
high pool price times and making Pool purchases when the Pool price  is
below the Mid-merit plant's marginal costs.

     U.K. Gas Transportation and Storage.  The Company, through CE Gas,
is pursuing a number of gas transportation and storage opportunities in
the  U.K.  to  integrate  with its North Sea  upstream  gas  production
operations.

Philippines

      Alto Peak.  The Alto Peak Project is a smaller geothermal project
in  the same general area of Leyte as the Upper Mahiao, Mahanagdong and
Malitbog  Projects.  A  subsidiary of the  Company  and  PNOC-EDC  have
executed  a 70 net MW Energy Conversion Agreement, dated May  7,  1994.
The  general  terms and conditions are similar to the  Malitbog  Energy
Conversion  Agreement ("ECA"). However, the plant design has  not  been
initiated  because  PNOC-EDC  has not finalized  the  steam  conditions
(pressure, composition and pH). PNOC-EDC is still drilling and  testing
the   geothermal  wells  that  will  supply  steam  to  such   project.
Consequently,  the  ECA  has been extended  and  the  Company  has  not
commenced financing arrangements for the Alto Peak Project.

Indonesia

      Dieng  Phase II, Patuha Phase II and Bali.  The Company's  Dieng,
Patuha  and  Bali projects in Indonesia represent ongoing,  development
programs  of  985  MW  under contract, to be  brought  into  commercial
operation  on  a  modular  basis as the steam fields  are  drilled  and
developed.  However,  the  situation  in  Indonesia  has  created  some
significant  challenges for the Company, requiring an $87 million  non-
recurring charge in the fourth quarter of 1997.

       Producing Gas Field Operations and Fields in Development

      CE  Gas  UK  Limited.  CE Gas UK Limited  ("CE  Gas")  is  a  gas
exploration  and  production company which  is  focused  on  developing
integrated upstream gas projects. Its "upstream gas" business  consists
of    the    exploration,   development   and   production,   including
transportation and storage, of gas for delivery to a point of sale into
either a gas supply market or a power generation facility. CE Gas holds
various interests in the southern basin of the United Kingdom sector of
the  North  Sea,  as described below. Also as is more  fully  discussed
below, CE Gas has recently been involved in certain gas development and
exploration activities relating to a large gas field prospect in Poland
and the Gingin field in the Perth Basin in Australia.


The Company's Producing Gas Field Operations and Fields in Development

PRODUCING GAS FIELDS             SHARE OF     CURRENT        LOCATION
                                 REMAINING    % WORKING
                                 RESERVES     INTEREST
                                 BCF(1)


Windermere                       15.0         20%            U.K. Offshore
                                                             (North Sea)
Victor                           12.1         5%             U.K. Offshore
                                                             (North Sea)
Schooner                         11.1         2%             U.K. Offshore
                                                             (North Sea)
Johnston                         18.0         18.264%        U.K. Offshore
                                                             (North Sea)
FIELDS IN DEVELOPMENT            Size Km2

Gingin Concession                2,960        9%(2)          S.W. Australia
                                                             Onshore
                                                             (Perth Basin)
Pila Concession                  13,000(3)    100%           N.W. Poland
                                                             (Polish Trough)



(1)Gas reserves in Billion cubic feet (or "Bcf") as of December 31, 1997.
The Classification "Remaining" means reserves which geophysical, geological
and engineering data indicate to be in place or recoverable (as the case
 may be) with a 50% probability the reserves will exceed the estimate.
(2)Currently CE Gas beneficially owns 9% of Gingin Concession with a right
                 to earn up to a 50% working interest.
(3)Subject to 25% relinquishment after every 2 years during the 8 year
             contract term based on work program results.


Producing Fields

      Windermere Field (Producing). The Windermere Field is located  in
the  Eastern part of the Southern North Sea approximately 62 miles east
of Hull on the U.K. coast and has Remaining reserves of 15.0 bcf net to
CE  Gas.  The field is produced by an unmanned platform which  has  two
wells.  The gas is transported via an 8" pipeline to the Markham  Field
where  it  is  processed,  compressed and  delivered  through  the  K13
pipeline system to the Den Helder terminal on the Netherlands coast. CE
Gas  holds  a  20%  working  interest in  this  field  which  commenced
production in April 1997 and currently has average net daily production
of  9.0  MM scfd (million standard cubic feet per day). Gas is sold  to
N.V. Nederlandse Gasunie.

      Victor Field (Producing). The Victor gas field is located in  the
central part of the Southern North Sea, approximately 80 miles east  of
the  Theddlethorpe  terminal on the U.K. coast and  has  net  Remaining
reserves  of 12.1 bcf net to CE Gas. An unmanned platform is  installed
and  the field produces from 5 production wells and a sixth subsea well
tied  back to the platform. The gas is exported through a 16"  pipeline
to  the  Viking  field  and  then onwards to  the  Theddlethorpe  shore
terminal. The Victor field has been in production since September 1984,
and  currently has average daily production of 5.94 MM scfd  and  sells
its  gas  to  British Gas Trading Limited. CE Gas holds  a  5%  working
interest in this field.

      Schooner Field (Producing). The Schooner Field is located in  the
Northern  part of the Southern North Sea and has Remaining reserves  of
11.1  bcf. The field is produced by an unmanned platform which is  tied
back through a 28km 16" flowline to the Murdoch platform. Production is
achieved from four wells with a fifth well planned this year.  The  gas
is  transported  through  the CMS pipeline to the  Theddlethorpe  shore
terminal. CE Gas holds a 2.07% working interest in the Schooner  Field,
which  commenced production in October 1996 and currently  has  average
net  daily  production of 1.8 MM scfd. The CE Gas share of the  gas  is
sold to its affiliate Northern.

      Johnston Field (Producing).  The Johnston gas field is located in
the Southern North Sea approximately 56 miles north east of Scarborough
on  the U.K. coast and has Remaining reserves of 18 bcf net to CE  gas.
The  field  is  produced  from three subsea  wells  tied  back  to  the
Ravenspurn  North field via a 4.5 mile, 12" pipeline.  Gas is  exported
via  the  Cleeton field to the Dimlington terminal via a 33  mile,  36"
pipeline.  The Johnston field has been in production since October 1994
at  an average daily rate of 53 MMscfd.  Gas is sold to Eastern Natural
Gas.  CE Gas has a 18.264% working interest in this field.

Fields in Development

      Pila.   In  August 1997, CE Gas signed an eight  year  concession
development agreement with the Polish government providing it with  the
exclusive  right  (a  100% working interest) to develop  the  extensive
(13,000  square  kilometers) undeveloped Pila  gas  concession  in  the
Polish Trough in northwest Poland. CE Gas is committed to a seismic and
drilling  work program to develop producing areas within the concession
over  that  period,  subject to relinquishment of  up  to  25%  of  the
concession area after every two years, with only developed areas to  be
retained  by  CE  Gas at the end of the eight year  term.  The  Company
believes  that  there  is  the  potential to  structure  an  integrated
upstream  gas/power generation project at the Pila concession,  subject
to  (among other things) identifying a suitable site and negotiating an
acceptable power offtake agreement.

      Gingin  Gas  Field.  In  August 1997, CE Gas  signed  an  earn-in
agreement  with Empire Gas of Australia, the permit holder for  various
concession  areas  in the Gingin field in the Perth  Basin  in  Western
Australia.  The  earn-in agreement provides CE Gas  with  the  ability,
through a seismic and drilling phased work program, to obtain up  to  a
50%  working interest in the main concession area totaling 2,960 square
kilometers  and  up  to  a  33%  working  interest  in  four  ancillary
concession areas totaling 9,451 square kilometers. Gingin gas  reserves
are  estimated by Empire Gas to be 470 bcf. Given the advantages of the
location of the Gingin field, in close proximity to an industrial  area
and  electric  residential load center, the Company believes  that  the
Gingin  field  possesses  the  potential  for  an  integrated  upstream
gas/power generation project.

     Both electricity and gas are in the process of being opened up for
competition. 95% of all gas to SW Australia is currently supplied  from
the  NW shelf (Dampier to Bunbury pipeline--1500km). The Onshore  Perth
Basin is known to be gas prone but has been significantly underexplored
and  underdeveloped.  Historically, gas has  been  a  state  controlled
energy  sector in Australia. The Gingin field proved gas in  the  early
1970s.  The  Company  believes  that new  technologies  now  offer  the
potential for extracting significant gas reserves through more advanced
recovery methods, and the Company, which currently beneficially owns  a
9% interest in the Gingin Concession, has the right to earn up to a 50%
working  interest  under its phased seismic and drilling  work  program
with Empire Gas of Australia.

             Regulatory, Energy and Environmental Matters

United States

     The Company is subject to a number of environmental laws and other
regulations   affecting  many  aspects  of  its  present   and   future
operations,  including  the  construction  or  permitting  of  new  and
existing  facilities, the drilling and operation of  new  and  existing
wells  and  the  disposal of various geothermal solids. Such  laws  and
regulations generally require the Company to obtain and comply  with  a
wide variety of licenses, permits and other approvals. No assurance can
be  given,  however,  that  in the future  all  necessary  permits  and
approvals  will be obtained and all applicable statutes and regulations
complied  with. In addition, regulatory compliance for the construction
of new facilities is a costly and time-consuming process, and intricate
and  rapidly  changing  environmental  regulations  may  require  major
expenditures for permitting and create the risk of expensive delays  or
material  impairment of project value if projects  cannot  function  as
planned  due  to changing regulatory requirements or local  opposition.
The  Company believes that its operating power facilities are currently
in  material  compliance with all applicable federal, state  and  local
laws   and  regulations.  There  can  be  no  assurance  that  existing
regulations  will not be revised or that new regulations  will  not  be
adopted or become applicable to the Company which could have an adverse
impact  on its operations. In particular, the independent power  market
in  the  United  States is dependent on the existing energy  regulatory
structure,   including   PURPA  and  its  implementation   by   utility
commissions in the various states.

      Each  of the Company's operating domestic power facilities  meets
the  requirements promulgated under PURPA to be qualifying  facilities.
Qualifying  facility status under PURPA provides two primary  benefits.
First,  regulations under PURPA exempt qualifying facilities  from  the
Public Utility Holding Company Act of 1935, as amended ("PUHCA"),  most
provisions  of  the Federal Power Act (the "FPA") and  the  state  laws
concerning  rates of electric utilities, and financial and organization
regulations   of   electric  utilities.  Second,   FERC's   regulations
promulgated  under  PURPA require that (1) electric utilities  purchase
electricity  generated by qualifying facilities,  the  construction  of
which  commenced on or after November 9, 1978, at a price based on  the
purchasing  utility's full Avoided Cost, (2) the electric utility  sell
back-up,  interruptible,  maintenance and  supplemental  power  to  the
qualifying facility on a non-discriminatory basis, and (3) the electric
utility   interconnect  with  a  qualifying  facility  in  its  service
territory.

     Currently, Congress is considering proposed legislation that would
amend  PURPA  by  eliminating the requirement that  utilities  purchase
electricity  from  qualifying facilities at  prices  based  on  Avoided
Costs.  The  Company  does not know whether such  legislation  will  be
passed or what form it may take. The Company believes that if any  such
legislation  is passed, it would apply to new projects only  and  thus,
although  potentially impacting the Company's ability  to  develop  new
domestic   projects,  it  would  not  affect  the  Company's   existing
qualifying  facilities. There can be no assurance,  however,  that  any
legislation  passed  would not adversely impact the Company's  existing
domestic projects.

       In   addition,  many  states  are  implementing  or  considering
regulatory initiatives designed to increase competition in the domestic
power  generation  industry and increase access to electric  utilities'
transmission  and distribution systems for independent power  producers
and  electricity  consumers.  On  September  1,  1996,  the  California
legislature  adopted an industry restructuring bill that would  provide
for a phased-in competitive power generation industry with a power pool
and independent system operator and also would permit direct access  to
generation  for  all power purchasers outside the power exchange  under
certain circumstances. Under the bill, consistent with the requirements
of  PURPA, existing qualifying facilities power sales agreements  would
be  honored. The Company cannot predict the final form or timing of the
proposed industry restructuring or the results of its operations.

     The structure of such federal and state energy regulations have in
the  past,  and may in the future, be the subject of various challenges
and   restructuring   proposals  by  utilities   and   other   industry
participants. The implementation of regulatory changes in  response  to
such  changes  or restructuring proposals, or otherwise  imposing  more
comprehensive  or  stringent requirements on the Company,  which  would
result  in  increased compliance costs, could have a  material  adverse
effect on the Company's results of operations.

United Kingdom

       Northern's   businesses  are  subject  to  numerous   regulatory
requirements  with  respect to the protection of the  environment.  The
Electricity Act obligates the UK Secretary of State or the Regulator to
take  into  account the effect of electricity generation,  transmission
and  supply  activities  upon the physical environment  when  approving
applications  for  the construction of generating  facilities  and  the
location of overhead power lines. The Electricity Act requires Northern
to  consider  the  desirability of preserving natural  beauty  and  the
conservation  of natural and man-made features of particular  interest,
when it formulates proposals for development in connection with certain
of its activities. Northern mitigates the effects its proposals have on
natural   and   man-made  features  and  administers  an  environmental
assessment when it intends to lay cables, construct overhead  lines  or
carry  out  any  other  development in  connection  with  its  licensed
activities.

      The  Environmental Protection Act 1990 addresses waste management
issues  and  imposes certain obligations and duties on companies  which
handle and dispose of waste. Some of Northern's distribution activities
produce waste, but Northern believes that it is in compliance with  the
applicable standards in such regard.

     Possible adverse health effects of electromagnetic fields ("EMFs")
from  various  sources, including transmission and distribution  lines,
have  been  the  subject of a number of studies and  increasing  public
discussion. Current scientific research is inconclusive as  to  whether
EMFs  may  cause  adverse  health  effects.  The  only  United  Kingdom
standards for exposure to power frequency EMFs are those promulgated by
the  National  Radiological Protection Board and relate to  the  levels
above  which  non-reversible physiological  effects  may  be  observed.
Northern  fully complies with these standards. However,  there  is  the
possibility  that  passage  of legislation  and  change  of  regulatory
standards  would  require  measures to mitigate  EMFs,  with  resulting
increases  in  capital and operating costs. In addition, the  potential
exists  for  public  liability  with respect  to  lawsuits  brought  by
plaintiffs alleging damages caused by EMFs.

     Northern believes that it has taken and continues to take measures
to comply with the applicable laws and governmental regulations for the
protection  of  the  environment.  There  are  no  material  legal   or
administrative proceedings pending against Northern with respect to any
environmental matter.

     In the general election held in the United Kingdom on May 1, 1997,
the  Labour  Party  won  a  majority of seats  in  the  United  Kingdom
Parliament.  On July 31, 1997, the United Kingdom Parliament passed the
so  called  "windfall tax" to be levied on privatized  utilities  which
resulted in a charge to net income of approximately $136 million.   See
the   Company's  Current  Report  on  Form  8-K  dated  July  7,  1997,
incorporated herein by reference.  There can be no assurance that other
possible  changes  in tax or utility regulation by the  United  Kingdom
government,  by  whichever party it is controlled,  would  not  have  a
material  adverse  effect on the Company's results of  operations.   In
March   1998  the  Government  published  a  consultation  on   utility
regulation.   This paper outlined a number of proposals for discussion.
The   stated  objectives  are  "fairness  and  efficiency"  which   the
Government  regard  as  "the key to securing a  long-term,  stable  and
effective  framework capable of serving consumers well  and  of  taking
these  industries  into the next millennium".  Some  of  the  proposals
under consideration would require legislative changes.


                               Employees

      At December 31, 1997, the Company and its subsidiaries (including
Northern)  employed  approximately  4,300  people.  None  of  the  Coso
Partnerships,  the  Falcon  Project nor  the  Imperial  Valley  Project
partnerships  hire or retain any employees. All employees necessary  to
the  operation  of the Coso Project are provided by the  Company  under
certain  plant  and  field operations and maintenance  agreements.  All
employees necessary to operate the Falcon and Imperial Valley  Projects
are  provided by affiliates of the Company under certain administrative
services   and  operation  and  maintenance  agreements.  International
development activities in Indonesia and the Philippines are principally
performed by employees of affiliates of the Company and operations will
be  performed by employees of the local project entities. The Company's
affiliates currently maintain offices in Manila and Jakarta.

      Of  Northern's employees, at December 31, 1997, approximately 86%
are  represented by labor unions. All Northern employees  who  are  not
party  to  a  personal  employment contract are subject  to  collective
bargaining  agreements  that  are covered by  eight  separate  business
agreements.  These  arrangements may  be  amended  by  joint  agreement
between   the   trade  unions  and  the  individual  business   through
negotiation  in  the  appropriate  Joint  Business  Council.   Northern
believes that its relations with its employees are good.

Item 2.   Properties

      Property.    The Company's most significant physical  properties,
other  than  those  owned by Northern (described herein),  are  its  21
operating  power facilities, its plants under construction and  related
real  property  interests. The Company also maintains an  inventory  of
approximately 200,000 acres of geothermal property leases. The  Company
owns  its principal executive offices and leases its offices in Jakarta
and  Manila. Certain of the producing acreage owned by Magma is  leased
to  Mammoth-Pacific  as owner and operator of the Mammoth  Plants,  and
Magma,  as lessor, receives royalties from the revenues earned by  such
power  plants. The Company, as lessee, pays certain royalties and other
fees to the property owners and other royalty interest holders from the
revenue generated by the Imperial Valley Project.

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

      Northern owns the freehold of its principal executive offices  in
Newcastle upon Tyne, England. Northern has both network and non-network
land  and  building. At December 31, 1997, Northern  had  freehold  and
leasehold   interests   in  approximately  7,500  network   properties,
comprising principally sub-station sites. The recorded historical  cost
account  net book value of total network land and buildings at December
31,  1997 was pounds sterling 23.9 million. Northern owns, directly  or
indirectly,  the  freehold  or leasehold interests  of  such  land  and
buildings.  At  December 31, 1997 Northern had freehold  and  leasehold
interests   in  approximately  102  non-network  properties  comprising
chiefly   offices,  former  retail  outlets,  depots,  warehouses   and
workshops. The recorded historical cost account net book value of total
non-network land and buildings at December 31, 1997 was pounds sterling
25.6 million.

Item 3.   Legal Proceedings

      The  Company  is  not  a  party to  any  material  pending  legal
proceedings.  However, as described herein, certain  of  the  Company's
projects are parties to litigation or other disputes.

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


Not applicable.

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


      The  Common  Stock is listed on the New York Stock Exchange  (the
"NYSE"), the Pacific Stock Exchange and the London Stock Exchange under
the symbol "CE." The following table sets forth for the fiscal quarters
indicated  the  high and low last reported sale prices  of  the  Common
Stock as reported on the NYSE Composite Tape.


                             PRICE
                             RANGE

                             HIGH     LOW

Fiscal Year Ending
December 31, 1997

Fourth Quarter              39.625   28.00
Third Quarter               41.75  30.9375
Second Quarter              41.625  32.625
First Quarter               38.375  32.125

Fiscal Year Ending
December 31, 1996

Fourth Quarter              33.625  28.125
Third Quarter               31.875  22.875
Second Quarter              28.375   24.00
First Quarter               26.875  18.375

Fiscal Year Ending
December 31, 1995

Fourth Quarter              20.875  17.875
Third Quarter                21.50  16.125
Second Quarter              17.125   15.50
First Quarter               18.875  15.375

      On  March  23, 1998, the last reported sale price of  the  Common
Stock on the NYSE Composite Tape was $30 7/8 per share. As of March 23,
1998,  there were approximately 1,091 holders of record of  the  Common
Stock.  The  Company's present policy is to reinvest  earnings  in  the
business and pay no dividends on its Common Stock. In addition, certain
of  the Company's current debt indentures restrict the payment of  cash
dividends  based upon a formula and limit the amount of  dividends  and
other  distributions  generally to no more than 50%  of  the  Company's
accumulated adjusted consolidated net income as defined, subsequent  to
April 1, 1994, plus the proceeds of any stock issuances.

      The  Company's  10-1/4%  senior  discount  notes  due  2004,  the
Company's  9  1/2% senior notes due 2006 and the Company's  7.63%  senior
notes  due  2007 restrict the payment of cash dividends  based  upon  a
formula  and  limit  the  amount of dividends and  other  distributions
generally  to  no  more than 50% of the Company's accumulated  adjusted
consolidated net income as defined, subsequent to April 1,  1994,  plus
the proceeds of any stock issuance.

      The  Company's ability to pay dividends is dependent upon receipt
of dividends or other distributions from the Company's subsidiaries and
the partnerships and joint ventures in which the Company has interests.
The availability of distributions from the Company's joint ventures  is
subject  to  the  satisfaction  of  various  covenants  and  conditions
contained in the venture's financing documents (such as those contained
in  the  Salton  Sea  Funding, Coso Funding, or  international  project
financing  documents) and the Company anticipates that  future  project
level   financings   will  contain  certain  conditions   and   similar
restrictions on the distribution of cash flow to the Company.

Item 6.   Selected Financial Data

      There  is hereby incorporated by reference the information  which
appears  under  the  caption "Selected Financial Data"  in  the  Annual
Report.

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

      There  is hereby incorporated by reference the information  which
appears  under  the caption "Management's Discussion  and  Analysis  of
Financial Condition and Results of Operations" in the Annual Report.

Item 8.   Financial Statements and Supplementary Data

      There  is hereby incorporated by reference the information  which
appears  in the Consolidated Financial Statements and notes thereto  in
the Annual Report.

Item  9.    Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

     Not applicable.

                               PART III

                              MANAGEMENT


Item 10.  Directors, Executive and Other Officers of the Company

     There is hereby incorporated by reference the information which
appears under the caption "Information Regarding Nominees for Election
as Directors and Directors Continuing in Office at the Annual Meeting"
in the Proxy Statement. The Company's management structure is organized
functionally and the current executive and other officers of the
Company and their positions are as follows:

David L. Sokol         Chairman of the Board and Chief Executive Officer
Gregory E. Abel        President and Chief Operating Officer
Steven A. McArthur     Executive Vice President, General Counsel and Secretary
Craig M. Hammett       Senior Vice President and Chief Financial Officer
Douglas L. Anderson    Assistant General Counsel, Assistant Secretary
                       and General Counsel, CalEnergy Operating Company
David A. Baldwin       General Manager, Philippines
Edward F. Bazemore     Vice President, Human Resources
Robert Beck            Director, Information Systems
Donald C. Blachly      General Manager, Coso Geothermal Operations
Malcolm Chandler       Director, Northern Electric and Managing Director, Supply
P. Eric Conner         Director, Northern Electric and Managing Director,
                       Utility Services
Dave Crompton          Managing Director, Northern Electric, Retail
Richard B. Dalton      General Manager, Leyte Geothermal Operations
Alan Dickson           Tax Manager, Northern Electric
J. Douglas Divine      Vice President, Project Development
David  A.  Faulkner    Director, Personnel and Corporate  Affairs,
                       Northern Electric
John L. Featherstone   General Manager, Minerals
Vincent R. Fesmire     Vice President, Construction and Engineering
James A. Flores        Vice President, Project Finance
Adrian M. Foley III    Vice President, Marketing
Dr. John M. France     Regulation Director, Northern Electric
G. Valerie Giles       Company Secretary, Northern Electric
Patrick  J. Goodman    Vice President, Chief Accounting Officer and Controller
Brian K. Hankel        Vice President and Treasurer
Edward J. Heinrich     General Manager, U.S. Gas Operations
Gary L. Hood           General Manager, NorCon Gas Operations
Walter Keenan          Director, Human Resources
Dr. Philip S. Lawless  Managing Director, Generation, Northern Electric
Kenneth R. Lewis       General Manager, Power Resources Gas Operations
Ken Linge              Director, Financial Planning, Northern Electric
Steven G. Lyons        Project Manager, Casecnan
Thomas R. Mason        President, CalEnergy Operating Company
Frederick L. Manuel    Vice President and Chief Operating Officer, Asia
Patti J. McAtee        Director, Corporate Communications
Neil W. Midgley        Managing Director, Northern Metering Services
Donald M. O'Shei, Jr.  President, CalEnergy Development Company
David Pearson          Managing  Director, Marketing and Sales,
                       Northern Electric
Steve Raine            Managing  Director,  Northern  Information
                       Systems and Northern Electric Telecom
P. Dan Rorabaugh       General Manager, Saranac Gas Operations
John A. Schretlen      General Manager, Yuma Gas Operations
James J. Sellner       Director, Taxation
Robert S. Silberman    Senior Vice President, Administration
James D. Stallmeyer    General Counsel, Northern Electric and General
                       Counsel, CalEnergy Development Company
David Swan             Director, Northern Electric and Managing
                       Director, Distribution
James T. Turner        General  Manager, Imperial Valley Geothermal Operations
David A. Waters        Managing Director, Northern Utility Services
Jonathan M. Weisgall   Vice President, Legislative and Regulatory Affairs
Peter Youngs           Managing Director, Gas Exploration and Development

     Set forth below is certain information with respect to each of the
foregoing officers:

     DAVID L. SOKOL, 41, Chairman of the Board of Directors and Chief
Executive Officer.  Mr. Sokol has been CEO since April 19, 1993 and
served as President of CalEnergy from April 19, 1993 until January 21,
1995.  Mr. Sokol has been Chairman of the Board of Directors since May
1994 and a director since March 1991.  Formerly, among other positions
held in the independent power industry, Mr. Sokol served as President
and Chief Executive Officer of Kiewit Energy Company, which at that
time was a wholly owned subsidiary of PKS, and Ogden Projects, Inc.

      GREGORY E. ABEL, 35, President and Chief Operating Officer.   Mr.
Abel joined the Company in 1992. Mr. Abel is a Chartered Accountant and
from 1984 to 1992 he was employed by Price Waterhouse. As a Manager  in
the  San  Francisco office of Price Waterhouse, he was responsible  for
clients in the energy industry.

      STEVEN A. McARTHUR, 40, Executive Vice President, General Counsel
and  Secretary. Mr. McArthur joined the Company in February 1991.  From
1988  to  1991  he  was an attorney in the Corporate Finance  Group  at
Shearman  &  Sterling in San Francisco. From 1984 to  1988  he  was  an
attorney in the Corporate Finance Group at Winthrop, Stimson, Putnam  &
Roberts in New York.

      CRAIG  M.  HAMMETT, 37, Senior Vice President and Chief Financial
Officer.  Mr. Hammett joined the Company in 1996. Prior to joining  the
Company,  Mr. Hammett served as Director of Project Finance for  Energy
Power group, as Director, Project Finance and M&A for CSW Energy and as
a corporate loan officer for various financial institutions.

      DOUGLAS  L.  ANDERSON, 40, Assistant General  Counsel,  Assistant
Secretary  and  General  Counsel,  CalEnergy  Operating  Company.   Mr.
Anderson  joined the Company in February 1993. From 1990 to  1993,  Mr.
Anderson was a business attorney with Fraser, Stryker, Vaughn,  Meusey,
Olson,  Boyer  &  Bloch,  P.C. in Omaha. From 1987  through  1989,  Mr.
Anderson  was  a  principal in the firm Anderson & Anderson.  Prior  to
that, from 1985 to 1987, he was an attorney with Foster, Swift, Collins
& Coey, P.C. in Lansing, Michigan.

      DAVID  A. BALDWIN, 33, General Manager, Philippines.  Mr. Baldwin
joined  the Company in June 1997. From December 1996 to June 1997,  Mr.
Baldwin  served as Vice President, Project Development for  Asia  Power
Ltd. in Hong Kong. From October 1994 to December 1996, Mr. Baldwin  was
Project Director at SouthPac Corporation Ltd. in New Zealand and, prior
to  that,  he  held  a  series  of project management  and  engineering
positions at Shell International in the Netherlands and New Zealand.

      EDWARD  F.  BAZEMORE,  61, Vice President, Human  Resources.  Mr.
Bazemore  joined the Company in July 1991. From 1989 to  1991,  he  was
Vice President, Human Resources, at Ogden Projects, Inc. in New Jersey.
Prior  to that, Mr. Bazemore was Director of Human Resources for  Ricoh
Corporation,  also  in  New  Jersey. Previously,  he  was  Director  of
Industrial Relations for Scripto, Inc. in Atlanta, Georgia.

      ROBERT BECK, 36, Director, Information Systems.  Mr. Beck  joined
the  Company in April 1996.  Prior to that he was employed  by  Inacom,
Corp.,  Sequoia  Systems, Inc., AT&T - Brandon Consulting  Group,  U.S.
West  Marketing  Resources Group, Inc., United Phone Book  Advertisers,
Inc. and Henningsen, Durham & Richardson ("HDR").

       DONALD   C.   BLACHLY,  50,  General  Manager,  Coso  Geothermal
Operations.  Mr. Blachly joined the Company in June 1993. Prior to that
Mr. Blachly had been employed by Santa Fe Geothermal and the Sacramento
Municipal  Utility  District  in  various  management  and  engineering
capacities.

      MALCOLM  CHANDLER, 55, Director, Northern Electric  and  Managing
Director,  Supply. Mr. Chandler joined Northern in 1970 from Manweb  as
Tariffs  Engineer.  His management positions have  included  Tariffs  &
Supplies Manager, Regional Manager and Director of Tariffs & Contracts.

       ERIC  CONNOR,  49,  Director,  Northern  Electric  and  Managing
Director,  Utility Services. Mr. Connor joined Northern in  1992  as  a
Director. Prior to joining Northern, he was a Director at NEI  Reyrolle
Ltd. and prior to that, his appointments included: deputy group head of
engineering,  National Nuclear Corporation; manager  computer  systems,
NEI  Electronics (C&I Systems); systems engineer, Davy-Leowy;  software
engineer, Marconi Space & Defence.

      DAVE  CROMPTON, 44, Managing Director, Northern Electric  Retail.
Mr.  Crompton  joined Northern Electric Retail in April 1990  where  he
served  as  Sales Director, and earlier this year also  took  over  the
Marketing function.  He became Managing Director in June 1997.   During
his  time  with  Northern Electric he has gained a Master  in  Business
Administration  at  Durham  University.   Mr.  Crompton  has  26  years
experience  in  electrical  retailing  of  which  19  years  were  with
Dixons/Currys  where he held the posts of Regional  Sales  Manager  and
Divisional Marketing Manager.

       RICHARD   B.  DALTON,  45,  General  Manager,  Leyte  Geothermal
Operations.  Mr. Dalton joined the Company in November 1989.  Prior  to
that  he was Plant Superintendent at Imperial Valley from 1987 to 1989.
From  1976 to 1987 Mr. Dalton was an Engineering Officer with the  U.S.
Merchant Marines.

     ALAN  DICKSON,  49,  Tax Manager, Northern Electric.  Mr.  Dickson
joined Northern in September 1989.  Prior to that Mr. Dickson served in
various  posts  with  the  Inland Revenue and  as  District  Inspector,
Hexham.

      J.  DOUGLAS DIVINE, 41, Vice President, Project Development.  Mr.
Divine  joined  the Company in September 1996. Prior to  that,  he  was
Director  of  Planning  and  Regulatory Affairs  with  Falcon  Seaboard
Resources  Inc.  from 1990 to 1996. From 1987 to 1990,  he  was  Senior
Manager  of Management Consulting Services with Price Waterhouse;  from
1984 to 1986 Mr. Divine was Director of Operations Review Divisions and
Executive Assistant to Commissioner of the Public Utility Commission of
Texas;  and  from  1983  to  1984, he was Coordinator  of  Revenue  and
Economic Analysis for the Governor's Office, State of Texas.

      DAVID A. FAULKNER, 50, Director, Personnel and Corporate Affairs,
Northern Electric. Mr. Faulkner's management positions with the Company
have  included Industrial Relations Manager, Privatization Manager  and
Director  of  Corporate Affairs, to which he added  responsibility  for
Personnel and Training in 1994.

       JOHN  L.  FEATHERSTONE,  53,  General  Manager,  Minerals.   Mr.
Featherstone joined the Company in April 1996. From July 1995 to  March
1996  he  was  Plant Manager with Unocal Geothermal of Indonesia.  From
1993 to July 1995 he served in various supervisory capacities with  the
Company.  From  1981 to 1995 he was Production Engineer and  Production
Superintendent for Unocal Geothermal.

       VINCENT  R.  FESMIRE,  57,  Vice  President,  Construction   and
Engineering.  Mr.  Fesmire joined the Company in  October  1993.  Since
joining  CalEnergy, Mr. Fesmire's responsibilities  have  shifted  from
project development and implementation to construction in parallel with
the status of the Company's projects. Prior to joining the Company, Mr.
Fesmire  was employed for 19 years with Stone & Webster, an engineering
firm,  serving in various management level capacities with an expertise
in geothermal design engineering.

      JAMES  A. FLORES, 44, Vice President, Project Finance.  Prior  to
joining  CalEnergy in May 1994, Mr. Flores was employed  for  12  years
with Mellon Bank, first in its Latin American Group and subsequently in
its Project Finance Group.

      ADRIAN  M. FOLEY, III, 51, Vice President, Marketing.  Mr.  Foley
joined  the Company in January 1994 as Project Development Manager  and
continued  in that capacity until January 1997 when he was promoted  to
Vice  President, Marketing. Prior to joining CalEnergy, Mr.  Foley  was
Regional  Manager, Business Development with Ogden Projects, Inc.  from
1989  to  1993  and  Executive Vice President with  Rescom  Development
Company from 1980 to 1989.

      DR.  JOHN  M. FRANCE, 40, Regulation Director, Northern Electric.
Mr.  France joined Northern in 1989. From 1982 to 1989, Mr. France held
a number of regulatory positions with British Gas.

      G.  VALERIE GILES, 46, Company Secretary, Northern Electric.  Ms.
Giles  joined  Northern Electric in 1989. From 1987  to  1989  she  was
Assistant Company Secretary at Amersham International plc and worked in
their legal department from 1974 to 1987.

      PATRICK J. GOODMAN, 31, Vice President, Chief Accounting  Officer
and Controller. Mr. Goodman joined the Company in June 1995, and served
as Manager of Consolidation Accounting until September 1996 when he was
promoted  to Controller. Prior to joining the Company, Mr. Goodman  was
an accountant at Coopers & Lybrand.

      BRIAN  K.  HANKEL, 35, Vice President and Treasurer.  Mr.  Hankel
joined  the Company in February 1992 as Treasury Analyst and served  in
that  position to December 1995. Mr. Hankel was appointed to  Assistant
Treasurer in January 1996 and was appointed Treasurer in January  1997.
Prior  to joining the Company, Mr. Hankel was a Money Position  Analyst
at FirsTier Bank of Lincoln from 1988 to 1992 and Senior Credit Analyst
at FirsTier from 1987 to 1988.

      EDWARD J. HEINRICH, 44, General Manager, U.S. Gas Operations. Mr.
Heinrich joined the Company in November 1993. Prior to the joining  the
Company Mr. Heinrich was plant supervisor with Sithe Energies, Inc. and
prior to that he was with the United States Navy.

      GARY  L.  HOOD, 43, General Manager, NorCon Gas Operations.   Mr.
Hood joined NorCon Gas Operations in January 1997.  Prior to that,  Mr.
Hood  held various positions at Saranac, the most recent position  from
August  1996 to January 1997 as Operations Manager.  From 1977  to  the
mid  1990's Mr. Hood served in the U.S. Navy with positions as  Nuclear
Machinists's  Mate,  Leading  Petty  Officer,  Division  Leading  Petty
Officer, Crew Chief/Plant Division Leading Officer, Nuclear Planner and
Leading Crew Chief, Navy Nuclear Power Training Unit.

     WALTER G. KEENAN, 42, Director, Human Resources. Mr. Keenan joined
CalEnergy in November 1991 as Director of Human Resources.  From August
1990  to  October  1991  he served as Human Resources  Coordinator  for
Texaco  Refining & Marketing, Inc.  Prior to that Mr. Keenan was  Human
Resources  Manager with Empire of America, FSB from September  1986  to
July   1990   and   Employee  Relations  Manager   Training/Development
Specialist with Gould Semiconductors from May 1982 to August 1986.

     DR. PHILIP S. LAWLESS, 36, Managing Director, Generation, Northern
Electric.  Mr. Lawless joined Northern in 1989 as Contract  Development
Officer  (Power  Purchase). His previous positions in Northern  include
Project Manager-Teesside Power Limited and Generation Projects Manager.
Prior to joining Northern, he worked at NEI Parsons Ltd, where he  held
various  positions,  and North Kalgurlie Mines Ltd,  Australia,  as  an
Assistant Plant Metallurgist.

     KENNETH  R.  LEWIS,  62,  General  Manager,  Power  Resources  Gas
Operations.   Mr.  Lewis  joined  the  Company  as  Manager  for  Power
Resources,  Inc. after extensive power plant background during  thirty-
two  years  of service with TU Electric.  Mr. Lewis received  his  BSME
from  the  University  of  Oklahoma School of  Engineering.   He  is  a
Registered  Professional Engineer and a member of the American  Society
of Mechanical Engineers.

      KEN  LINGE, 48, Director, Financial Planning, Northern  Electric.
Mr.  Linge  joined Northern as an accountancy trainee in 1968.  He  has
held  a variety of finance posts. In charge of Financial Planning since
1987,  he  has been involved in privatization, regulatory  reviews  and
financial and treasury functions.

      STEVEN G. LYONS, 51, Project Manager, Casecnan.  Mr. Lyons joined
the  Company  in  August  1997. Prior to that  he  was  a  Construction
Specialist and Senior Construction Engineer for Stone & Webster.  Prior
to  that  he  held  a  variety  of  engineering  positions  at  various
generating  facilities  and was a construction  Superintendent  at  the
Salton Sea plants.

      THOMAS R. MASON, 54, President, CalEnergy Operating Company.  Mr.
Mason  joined  the Company in March 1991. From October  1989  to  March
1991, Mr. Mason was Vice President and General Manager of Kiewit Energy
Company. Prior to that, Mr. Mason was Director of Marketing for  Energy
Factors,   Inc.  (now  Sithe  Energies  U.S.A.,  Inc.),  a  non-utility
developer  of power facilities. Prior to that Mr. Mason was a worldwide
Market  Manager  of  power  generation  for  Caterpillar's  Solar   Gas
Turbines, a gas turbine manufacturer.

      FREDERICK  L.  MANUEL,  39, Vice President  and  Chief  Operating
Officer, Asia. Mr. Manuel joined the Company in 1991. Prior to that, he
was  employed  by  Chevron Corporation with responsibilities  including
land  and  offshore  drilling,  reservoir and  production  engineering,
project management and technical research.

     PATTI J. MCATEE, 40, Director, Corporate Communications. Marketing
and  Public Relations Manager.  Ms. McAtee joined the Company in  1995.
Ms. McAtee was previously employed by Bergan Mercy Medical Center since
1984.   Since  1990 she was Marketing and Public Relations Manager  for
the hospital.

       NEIL  W.  MIDGLEY,  50,  Managing  Director,  Northern  Metering
Services.   Mr.  Midgley  has  spent more than  28  years  in  Northern
Electric with 18 years in management including seven years as a  Senior
Manager prior to his current appointment.  Mr. Midgley was appointed to
his present post in April 1996.

      DONALD  M.  O'SHEI,  JR.,  38, President,  CalEnergy  Development
Company.  Mr. O'Shei joined the Company in August 1992. Prior to  1997,
he  served  as  General  Manager--Indonesia and Vice  President  of  CE
International Investments, Ltd. for the Company. From 1991 to 1992,  he
was  employed by Proven Alternatives Capital Corporation as a Financial
Analyst.  Prior  to 1991, Mr. O'Shei served in the  U.S.  Army  in  the
Special Forces, Airborne and Pathfinder Units.

      DAVID  PEARSON,  43,  Managing  Director,  Marketing  and  Sales,
Northern  Electric.  Mr. Pearson joined Northern in  1992  as  Managing
Director,  Retail.  Prior to that his directorships  included  Midlands
Electricity,  Sodexho,  Thorn  EMI,  and  Moulinex  UK.  He  also  held
management positions at General Foods and Gilette.

      STEVE  RAINE, 51, Managing Director, Northern Information Systems
and Northern Electric Telecom.  Mr. Raine's appointments have included:
Head  of Computer Services for North Yorkshire County Council; Director
of  IT  at Northern; General Manager and Executive Director of Northern
Information  Systems (NIS). He currently represents the UK  electricity
industry  in  UNIPEDE (the European electricity utility  forum)  on  IT
matters  and  is  a member of the UK Electricity Pool  Programme  Board
responsible for delivery of the new trading systems for the opening  up
of the electricity market.

      P.  DAN  RORABAUGH, 36, General Manager, Saranac Gas  Operations.
Mr.  Rorabaugh  joined  the  Company in 1996.   Prior  to  joining  the
Company,  he was employed by Stewart & Stevenson Operations  and  Sithe
Energies,  Inc.  Prior to that time, Mr. Rorabaugh was with the  United
States  Navy  in San Diego, California where he served as  Gas  Turbine
Technician.

      JOHN A. SCHRETLEN, 35, General Manager, Yuma Gas Operations.  Mr.
Schretlen  joined  the Company in September 1989.  Prior  to  that,  he
served as Maintenance Manager for Falcon Power Operating Company, Power
Resources, Inc. and Big Spring, Texas.  Prior to joining CalEnergy, Mr.
Schretlen  was  employed by Custom Equipment Rebuilders, Inc.,  Amerada
Hess Company, Inc. and Callaway Aviation, Inc.

      JAMES J. SELLNER, 51, Director, Taxation. Director Taxation.  Mr.
Sellner   joined  CalEnergy  in  November,  1997.   Prior  to   joining
CalEnergy,  Mr.  Sellner  was  employed  by  Central  and  South   West
Corporation and Banc One/Mcorp.

      ROBERT  S.  SILBERMAN, 40, Senior Vice President, Administration.
Mr.  Silberman joined the Company in 1995. Prior to that, Mr. Silberman
served  as  Executive  Assistant to the Chairman  and  Chief  Executive
Officer  of International Paper Company, as Director of Project Finance
and  Implementation for the Ogden Corporation and as a Project  Manager
in  Business Development for Allied-Signal, Inc. He has also served  as
the Assistant Secretary of the Army for the United States Department of
Defense.

      JAMES  D. STALLMEYER, 40, General Counsel, Northern Electric  and
General  Counsel, CalEnergy Development Company. Mr. Stallmeyer  joined
the Company in 1993. Mr. Stallmeyer practiced in the public finance and
banking areas at Chapman and Cutler in Chicago from 1984 to 1987 and in
the  corporate finance department from 1989 to 1993. Prior to that, Mr.
Stallmeyer  was  an  attorney in the public finance department  of  the
Chicago office of Skadden, Arps, Slate, Meagher & Flom in 1987 and 1988
and  was  a  legal  writing instructor at the  University  of  Illinois
College of Law in 1988 and 1989.

     DAVID SWAN, 53, Director, Northern Electric and Managing Director,
Distribution.  Mr. Swan joined Northern in 1966 and has held  posts  in
varying   disciplines   including  distribution,  engineering   design,
operations,  customers engineering, customer relationships, engineering
contracting,  logistics,  computer  systems  development  and   project
management.

      JAMES  T. TURNER, 48, General Manager, Imperial Valley Geothermal
Operations. Mr. Turner joined the Company as Director of Engineering  &
Technology for Magma Power Company in 1993. From 1974 to 1993  he  held
various  engineering  positions with The Dow  Chemical  Company.  Those
positions   included   Technical  Manager,  Engineering   Manager   and
Physicist.

     DAVID A. WATERS, 55, Managing Director, Northern Utility Services.
Mr.  Waters  joined Northern in September 1960 as a Student Apprentice.
In  1982  he  became a Resources Engineer and received appointments  as
Cleveland  (Teesside) Technical Distribution System  Planning  Manager,
Business  Development  Manager,  later promoted  to  Business  Services
Manager  and  General Manager, NUSL.  The following March 1998  he  was
appointed as Managing Director.

       JONATHAN  M.  WEISGALL,  49,  Vice  President,  Legislative  and
Regulatory Affairs. Mr. Weisgall joined the Company in May 1995.  Prior
to  that,  Mr.  Weisgall  was  an attorney  in  private  practice  with
extensive  energy  and regulatory experience and is  currently  Adjunct
Professor of Energy Law at Georgetown University Law Center.

       PETER  YOUNGS,  43,  Managing  Director,  Gas  Exploration   and
Development.  Mr. Youngs joined Neste Oy in 1974 as a Geoscientist  and
held   the   following  positions  within  the  company:  International
Exploration  Manager,  General  Manager  (Europe-Africa  Region),  Vice
President and Managing Director UKEXPRO. From 1994 to present,  he  has
been  the  General Manager of Sovereign Exploration Ltd. (now CalEnergy
Gas (UK) Limited).


                                PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

          (a)  Financial Statements and Schedules

          1.   Financial Statements

                Filed  herewith and incorporated by reference  are  the
consolidated  balance  sheets of the Company  and  subsidiaries  as  of
December  31,  1997  and  1996,  and  the  consolidated  statements  of
operations,  cash flows and stockholders' equity for  the  years  ended
December 31, 1997, 1996 and 1995, and the related report of independent
auditors.

          2.   Financial Statement Schedules

                Independent  Auditor's Report on Schedule I,  Financial
Statements of the Company (Parent Company only)

                The  consolidated  Magma financial statement  schedules
which are excluded from the annual report to shareholders by Rule  14a-
3(b)  are  required  by Regulation S-X (17 CFR  210)  as  Magma  is  an
affiliate  whose securities are pledged as collateral and are  included
at Item 14(d).

     (b)  Reports on Form 8-K

           The Company filed a Current Report on Form 8-K dated October
9,  1997  reporting the investment grade credit rating of the Company's
senior unsecured debt by Duff & Phelps Credit Rating Co.

           The Company filed a Current Report on Form 8-K dated October
13, 1997 reporting the pricing of its public offering of common stock.

           The Company filed a Current Report on Form 8-K dated October
23,  1997  reporting the consumation of its public offering  of  common
stock and the concurrent sale of 2 million shares of common stock in  a
direct sale.

           The Company filed a Current Report on Form 8-K dated October
28,  1997  reporting the closing of the sale of $350 million  aggregate
principal amount of its 7.63% senior notes due 2007.

          The Company filed a Current Report on Form 8-K dated December
5,  1997 reporting that its indirect subsidiary, CE Electric UK Funding
Company had arranged for the sale of $362 million Senior Notes and  200
million pounds Sterling Bonds.

          The Company filed a Current Report on Form 8-K dated December
11,  1997  reporting  the increase in the authorized  purchase  amounts
under its stock repurchase program.

          The Company filed a Current Report on Form 8-K dated December
16,  1997  reporting  the closing of the sale of $125  million  of  its
6.853%  Senior Notes due 2004, $237 million of its 6.995% Senior  Notes
due 2007 and 200 million pounds of its 7.25% Sterling Bonds due 2022.

     (c)  Exhibits

          The exhibits listed on the accompanying Exhibit Index (except
in  the  case  of Exhibit 13.0, in which case only the portion  of  the
Annual  Report  which constitutes the Company's Consolidated  Financial
Statements and notes thereto) are filed as part of this Annual Report.

           For  the  purposes of complying with the amendments  to  the
rules  governing Form S-8 effective July 13, 1990 under the  Securities
Act  of  1933, the undersigned Registrant hereby undertakes as follows,
which undertaking shall be incorporated by reference into the Company's
currently effective Registration Statements on Form S-8:

           Insofar as indemnification for liabilities arising under the
Securities  Act  of  1933 may be permitted to directors,  officers  and
controlling persons of the registrant, the registrant has been  advised
that  in  the  opinion of the Securities and Exchange  Commission  such
indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by
the  registrant of expenses incurred or paid by a director, officer  of
controlling person of the registrant in the successful defense  of  any
action,  suit or proceeding) is asserted by such director,  officer  or
controlling  person in connection with the securities being registered,
the  registrant will, unless in the opinion of its counsel  the  matter
has  been  settled  by  controlling precedent, submit  to  a  court  of
appropriate  jurisdiction the question of whether such  indemnification
by  it  is  against public policy as expressed in the Act and  will  be
governed by the final adjudication of such issue.

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

           The  consolidated financial statements of Magma Company  and
subsidiaries  (financial statements of affiliates whose securities  are
pledged  as  collateral) are filed as part of this  report  immediately
following Schedule I.


                              SIGNATURES

Pursuant  to the requirements of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to  be
signed  on its behalf by the undersigned thereunto duly authorized,  in
the City of Omaha, State of Nebraska, on this 27th day of March, 1998.

                              CALENERGY COMPANY, INC.


                                   /s/ David L. Sokol*
                              By   David L. Sokol
                                   Chairman of the Board and Chief
                                   Executive Officer

                                   *By:  /s/  Steven A. McArthur
                                        Steven A. McArthur
                                        Attorney-in-Fact

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

                                                              Signature
Date

/s/  David L. Sokol*                                   March 27, 1998
David L. Sokol
Chairman of the Board,
Chief Executive Officer, and
Director


/s/  Gregory E. Abel*                                  March 27, 1998
Gregory E. Abel
President and Chief Operating Officer


/s/  Craig M. Hammett                                  March 27, 1998
Craig M. Hammett
Senior Vice President,
Chief Financial Officer


/s/  Patrick J. Goodman                                March 27, 1998
Patrick J. Goodman
Vice President,
Chief Accounting Officer
and Controller


/s/ Edgar D. Aronson*                                   March  27, 1998
Edgar D. Aronson
Director


*By:/s/  Steven A. McArthur                            March 27, 1998
     Steven A. McArthur
     Attorney-in-Fact

/s/ Judith E. Ayres*                                   March 27, 1998
Judith E. Ayres
Director


/s/ Richard K. Davidson*                               March 27, 1998
Richard K. Davidson
Director


/s/ David H. Dewhurst*                                March 27, 1998
David H. Dewhurst
Director


/s/ Richard R. Jaros*                                March  27, 1998
Richard R. Jaros
Director


/s/ David R. Morris*                                 March 27, 1998
David Morris
Director

/s/ John R. Shiner*                                  March 27, 1998
John R. Shiner
Director


/s/ Bernard W. Reznicek*                             March 27, 1998
Bernard W. Reznicek
Director


/s/ Walter Scott, Jr.*                               March  27, 1998
Walter Scott, Jr.
Director


/s/ David E. Wit*                                    March 27, 1998
David E. Wit
Director


*By:/s/  Steven A. McArthur                            March 27, 1998
     Steven A. McArthur
     Attorney-in-Fact

CalEnergy Company, Inc.                                Schedule I
Parent Company Only
Condensed Balance Sheets
as of December 31, 1997 and 1996
(dollars and shares in thousands, except per share amounts)

ASSETS                                       1997       1996


Cash and cash equivalents              $  1,280,477$    68,449
Restricted cash                             114,492     21,208
Short-term investment                           421        192
Investments in and advances to
 subsidiaries and joint ventures          1,793,413  1,952,612
Equipment, net                               19,016      9,797
Notes receivable - joint ventures               ---     27,375
Deferred income taxes                        25,007        ---
Deferred charges and other assets           104,802     90,234


 Total assets                           $ 3,337,628 $2,169,867


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and other accrued
 liabilities                            $    46,964 $   12,999
Parent company debt                       1,303,845  1,146,685
Deferred income taxes                           ---     12,688
 Total liabilities                        1,350,809  1,172,372

Deferred income                              12,827     12,775
Company-obligated mandatorily redeemable
 convertible preferred securities of
 subsidiary trusts                          553,930    103,930
Common stock and options subject
 to redemption                              654,736        ---

Stockholders' equity:
 Preferred stock - authorized 2,000 shares      ---        ---
 Common stock - par value $0.0675 per share,
 authorized 180,000 shares, issued 82,980
 and 63,747 shares,outstanding 81,322 and
 63,448 shares, respectively                  5,602      4,303
 Additional paid in capital               1,261,081    563,567
 Retained earnings                          213,493    297,520
 Cumulative effect of foreign currency
  translation adjustment                     (3,589)    29,658
 Common stock and options subject to
  redemption                               (654,736)       ---
 Treasury stock-1,658 and 299 common
  shares at cost                            (56,525)    (8,787)
 Unearned compensation - restricted stock       ---     (5,471)
 Total stockholders' equity                 765,326    880,790
 Total liabilities and stockholders'
  equity                                 $3,337,628 $2,169,867

The  notes  to the consolidated CalEnergy financial statements  are  an
integral part of these financial statements.

CalEnergy Company, Inc.                             Schedule I
Parent Company Only                                (continued)
Condensed Statements Of Operations
for the three years ended December 31, 1997
(dollars in thousands)
                                                1997      1996      1995

Revenue:

Equity in undistributed earnings of
 subsidiary companies and joint ventures   $  87,006  $  91,528   $52,960
Cash dividends and distributions from
 subsidiary companies and joint ventures     156,686    102,428    88,360
Interest and other income                     49,488     22,459    16,065

 Total revenues                              293,180    216,415   157,385

Expenses:

General and administration                   51,519      22,958    16,354
Interest, net of capitalized interest        67,636      54,484    46,985

 Total expenses                             119,155      77,442    63,339

Income before provision for income taxes    174,025     138,973    94,046
Provision for income taxes                   99,044      41,821    30,631

Income before minority interest              74,981      97,152    63,415
Minority interest                            23,158       4,691       ---

Income before extraordinary item             51,823      92,461    63,415
Extraordinary item, net of minority
 interest of $58,222                       (135,850)        ---       ---

Net income (loss)                           (84,027)     92,461    63,415
Preferred dividends                             ---         ---     1,080

Net income (loss) available to common
 stockholders                              $(84,027)    $92,461   $62,335

Income per share before extraordinary
 item                                     $     .77   $    1.69 $    1.32
Extraordinary item                        $   (2.02)  $     --- $     ---
Net income (loss) per share               $   (1.25)  $    1.69 $    1.32

Income per share before extraordinary
 item - diluted                           $     .75   $    1.54 $    1.22
Extraordinary item-diluted                $   (1.97)  $     --- $     ---
Net income (loss) per share-diluted       $   (1.22)  $    1.54 $    1.22

Average number of shares outstanding         67,268      54,739    47,249
Diluted shares                               68,686      65,072    56,195

The  notes  to the consolidated CalEnergy financial statements  are  an
integral part of these financial statements.

CalEnergy Company, Inc.                                Schedule I
Parent Company Only                                    (continued)
Condensed Statements Of Cash Flows
for the three years ended December 31, 1997
(dollars in thousands)
                                                  1997       1996        1995


Cash flows from operating activities          $(237,752)   $(51,621) $(33,469)

Cash flows from investing activities:
Decrease (increase) in advances to and
 investments in subsidiaries and joint
 ventures                                       305,563    (531,410) (747,516)
Decrease (increase) in short-term investments      (229)     33,998    15,810
Decrease (increase) in restricted cash          (93,284)     19,423    50,274
Other                                            18,330      (5,179)   10,699

Cash flows from investing activities            230,380    (483,168) (670,733)

Cash flows from financing activities:
Proceeds from sale of common and treasury
 stock and exercise of stock options            703,624      54,935   299,649
Proceeds from issuance of parent company debt   350,000     324,150   200,000
Proceeds from convertible preferred securities
   of subsidiary trusts                         450,000     103,930       ---
Repayment of parent company debt               (100,000)        ---       ---
Net proceeds from revolver                      (95,000)     95,000       ---
Purchase of treasury stock                      (55,505)    (12,008)   (1,590)
Deferred charges relating to debt financing     (33,719)     (8,811)      ---

Cash flows from financing activities          1,219,400     557,196   498,059

Net increase (decrease) in cash and cash
 equivalents                                  1,212,028      22,407  (206,143)

Cash and cash equivalents at beginning
 of period                                       68,449      46,042   252,185

Cash and cash equivalents at end of period   $1,280,477    $ 68,449 $  46,042

Supplemental disclosures:
Interest paid (net of amount capitalized)    $   38,176    $  1,705 $   5,172

Income taxes paid                            $   35,302    $ 23,211 $  14,812


The  notes  to the consolidated CalEnergy financial statements  are  an
integral part of these financial statements.










INDEPENDENT AUDITORS' REPORT


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


We  have  audited  the consolidated financial statements  of  CalEnergy
Company,  Inc. and subsidiaries as of December 31, 1997 and  1996,  and
for  each of the three years in the period ended December 31, 1997, and
have issued our report thereon dated February 12, 1998;  such financial
statements  and  reports are included in your  1997  Annual  Report  to
Stockholders and are incorporated herein by reference.  Our audits also
included  the  financial statement schedule of CalEnergy Company,  Inc.
and subsidiaries, listed in Item 14.  This financial statement schedule
is  the responsibility of the Company's management.  Our responsibility
is  to  express  an opinion based on our audits.  In our opinion,  such
financial statement schedule, when considered in relation to the  basic
financial statements taken as a whole, presents fairly in all  material
respects the information set forth therein.



Deloitte & Touche, LLP
Omaha, Nebraska
February 12, 1998

                 MAGMA POWER COMPANY AND SUBSIDIARIES
        (A wholly-owned subsidiary of CalEnergy Company, Inc.)

                     INDEX TO FINANCIAL STATEMENTS


The  following consolidated financial statements of Magma Power Company
and  the related independent accountants' reports are included in Items
14(d):

Independent Auditors' Report--Deloitte & Touche LLP         F-2

Consolidated balance sheets at December 31, 1997 and 1996   F-3

Consolidated statements of operations for the three years
ended December 31, 1997                                     F-4

Consolidated statements of stockholder's equity for the three
years ended December 31, 1997                               F-5

Consolidated statements of cash flows for the three years
ended December 31, 1997                                     F-6

Notes to consolidated financial statements                  F-7

All  schedules have been omitted because they are not applicable or not
required,  or  because  the  required  information  is  shown  in   the
consolidated financial statements or notes thereto.

                  INDEPENDENT AUDITORS' REPORT


Board of Directors and Shareholder
Magma Power Company
Omaha, Nebraska


We  have audited the accompanying consolidated balance sheets of  Magma
Power  Company and subsidiaries, a wholly-owned subsidiary of CalEnergy
Company,   Inc.,  as  of  December  31,  1997  and  1996  the   related
consolidated  statements of operations, stockholder's equity  and  cash
flows  for  the years then ended.  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 Magma Power Company
and subsidiaries at December 31, 1997 and 1996 and the results of their
operations  and their cash flows for the years then ended in conformity
with generally accepted accounting principles.



Deloitte & Touche LLP
Omaha, Nebraska
February 12, 1998

MAGMA POWER COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of CalEnergy Company, Inc.)
CONSOLIDATED BALANCE SHEETS
as of December 31, 1997 and 1996
dollars and shares in thousands except per share amounts

ASSETS                                       1997         1996

Cash and cash equivalents                $   14,051   $  13,429
Restricted cash                              51,835      23,695
Accounts receivable                          57,411      44,966
Due from parent                              80,924      68,694
Properties, plants, contracts and
 equipment, net                           1,207,605   1,225,684
Excess of cost over fair value of net
 assets acquired, net                       291,303     299,055
Deferred charges and other assets            69,788      62,874

 Total assets                            $1,772,917  $1,738,397


LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Accounts payable and other accrued
  liabilities                            $   32,773  $  52,281
Construction and project loans              176,657    137,881
Salton Sea notes and bonds                  448,754    538,982
Limited recourse senior secured notes       200,000    200,000
Deferred income taxes                       228,246    210,969

 Total liabilities                        1,086,430  1,140,113

Deferred income                              12,396        ---

Commitments and contingencies (Note 9)

Stockholder's equity:
Preferred stock - par value $0.10 per share,
 authorized 1,000 shares                        ---         ---
Common stock - par value $0.10 per share,
 authorized 30,000 shares, outstanding
 100 shares                                     ---         ---
Additional paid in capital                  501,626     501,626
Retained earnings                           172,465      96,658


 Total stockholder's equity                 674,091     598,284


Total liabilities and stockholder's equity$1,772,917 $1,738,397

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

MAGMA POWER COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of CalEnergy Company, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three years ended December 31, 1997
dollars in thousands

                                         1997         1996          1995

Revenue:
Sales of electricity and steam      $ 328,248    $ 249,293       $ 162,418
Royalty income                          3,489        6,846          19,962
Interest and other income               3,978        9,368          17,812

 Total revenues                       335,715      265,507         200,192

Cost and expenses:
Plant operations                       72,196       67,350          57,782
General and administration              1,380          503           3,282
Depreciation and amortization          89,134       69,853          46,895
Interest expense                       72,386       67,652          60,596
Less interest capitalized             (20,549)     (27,382)        (24,568)

 Total expenses                       214,547      177,976         143,987

Income before provision for income
 taxes and minority interest          121,168       87,531          56,205
Provision for income taxes             45,361       25,489          17,498

Income before minority interest        75,807       62,042          38,707
Minority interest                         ---          ---           4,091

Net income                            $75,807      $62,042         $34,616

The  accompanying  notes  are  an  integral  part  of  these  financial
statements.
MAGMA POWER COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of CalEnergy Company, Inc.)
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
for the three years ended December 31, 1997
dollars and shares in thousands



                            Outstanding          Additional
                               Common    Common   Paid-In   Retained
                               Shares     Stock   Capital   Earnings   Total


Balance, January 1, 1995       24,117   $ 2,411 $ 144,916 $ 242,489 $ 389,816

Net income in 1995 prior to
 acquisition                      ---       ---       ---     4,091     4,091

Purchase accounting push-down
 adjustments, net             (24,049)   (2,415)  332,857  (246,580)   83,862
Contributions from parent         ---       ---    22,947       ---    22,947
Other equity transactions, net     32         4       906       ---       910
Net income                        ---       ---       ---    34,616    34,616

Balance, December 31, 1995        100       ---   501,626    34,616   536,242

Net income                        ---       ---       ---    62,042    62,042

Balance, December 31, 1996        100       ---   501,626    96,658   598,284

Net income                        ---       ---       ---    75,807    75,807

Balance, December 31, 1997        100  $    ---  $501,626 $ 172,465 $ 674,091

The accompanying notes are an integral part of these financial statements.
MAGMA POWER COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of CalEnergy Company, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three years ended December 31, 1997
Dollars in thousands
                                                  1997      1996     1995

Cash flows from operating activities:
Net income                                      $ 75,807$ 62,042  $ 34,616
Adjustments to reconcile net cash flows from operating activities:
 Minority interest                                   ---     ---     4,091
 Provision for deferred income taxes              17,277   7,277     7,614
 Depreciation and amortization                    89,134  69,853    46,895
 Changes in other items:
 Accounts receivable                             (12,445) (7,735)    4,354
 Accounts payable and other accrued liabilities  (19,508)  3,325    14,153

Net cash flows from operating activities         150,265 134,762   111,723

Cash flows from investing activities:
Capital expenditures                            (50,907)(190,152) (171,063)
Purchase of Partnership Interest, net of
 cash acquired                                      ---  (58,044)      ---
Purchase of Magma, net of cash acquired             ---      ---  (907,614)
Decrease (increase) in restricted cash          (28,140)  59,071    (4,785)
Increase in other assets                         (6,914)  (3,345)  (24,037)

Net cash flows from investing activities        (85,961)(192,470)(1,107,499)

Cash flows from financing activities:
Due from parent                                 (12,230) (53,203)   (29,669)
Proceeds from debt offerings                        ---  135,000    675,000
Repayment of Salton Sea notes and bonds         (90,228) (48,106)   (22,912)
Repayment of project loans                          --- (102,999)  (124,839)
Proceeds from construction and other loans       38,776  101,018     36,863
Other equity transactions, net                      ---      ---        910
Advances from parent                                ---      ---    499,850

 Net cash flows from financing activities       (63,682)  31,710  1,035,203

Net increase (decrease) in cash and cash
 equivalents                                        622  (25,998)    39,427
Cash and cash equivalents at beginning of period 13,429   39,427        ---

Cash and cash equivalents at end of period     $ 14,051 $ 13,429   $ 39,427

Interest paid (net of amounts capitalized)     $ 50,802 $ 49,129   $ 50,840

Income taxes paid                              $    --- $    ---   $ 14,812

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





MAGMA POWER COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of CalEnergy Company, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
for the three years ended December 31, 1997
dollars and shares in thousands

1. BUSINESS

Magma   Power  Company  (the  "Company"  or  "Magma"),  a  wholly-owned
subsidiary of CalEnergy Company, Inc. (CalEnergy), is primarily engaged
in  the  exploration  for and development of geothermal  resources  and
conversion of such resources into electrical power and steam  for  sale
to  electric  utilities, and the development of  other  environmentally
responsible forms of power generation.

The  Company  currently operates eight geothermal power plants  in  the
Imperial  Valley in California. On April 17, 1996 the Company completed
the  acquisition of Edison Mission Energy's partnership interests  (the
"Partnership  Interest  Acquisition")  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 remaining four plants are the Salton Sea Project which
are  wholly-owned  by  subsidiaries of the Company.   These  geothermal
power  plants  consist of the Salton Sea I, Salton Sea II,  Salton  Sea
III, and Salton Sea IV.  The Salton Sea IV project commenced operations
in June 1996.

In  1995  the  Company,  through its wholly-owned  subsidiary,  Visayas
Geothermal  Power Company ("VGPC"), began construction of the  Malitbog
Geothermal  Project  on  the island of Leyte in  the  Republic  of  the
Philippines.  Unit I was deemed complete on July 25, 1996. Units II and
III were deemed complete on July 25, 1997.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The  consolidated  financial statements include  the  accounts  of  the
Company  and  its  wholly-owned subsidiaries. Prior to the  Partnership
Interest Acquisition, the consolidated financial statements include the
Company's proportionate share of the joint ventures in which it had  an
undivided interest in the assets and was proportionately liable for its
share  of  liabilities.  All significant inter-enterprise  transactions
and  accounts have been eliminated.  The results of operations  of  the
Company  include the Company's proportionate share of  the  results  of
operations of entities acquired as of the date of acquisition.

The  consolidated  financial  statements  reflect  the  acquisition  by
CalEnergy  and the resulting push down to the Company of the accounting
as a purchase business combination.

Restricted Cash

The  restricted cash balance is mainly composed of restricted  accounts
for  debt  service reserve funds and a capital expenditure  fund.   The
debt  service  reserve funds are legally restricted to  their  use  and
require the maintenance of specific minimum balances.

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  $4,811 and $7,664 at December 31,  1997  and  1996,
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  Magma  and Partnership Interest 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:

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

The  carrying  value  of the mineral reserves will  be  amortized  upon
commencement of commercial operation.

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  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 effective interest method.

Revenue Recognition

Revenues  are recorded based upon service rendered and electricity  and
steam  delivered  to the end of the month.  See Note 4 for  contractual
terms  of  power  sales  agreements. Royalties  earned  from  providing
geothermal resources to power plants operated by other geothermal power
producers  are recorded on an accrual basis.  Prior to the  Partnership
Interest Acquisition, royalties contractually payable to the Company by
the  Partnership Project were recorded on an accrual basis, net of  the
Company's  50% share of the corresponding partnership project  expense.
All intercompany royalties were eliminated after the acquisition of the
remaining 50% partnership interest.

Income Taxes

The  Company  is  included in the consolidated income  tax  returns  of
CalEnergy  and affiliates.  The provision for income taxes is  computed
on  a separate return basis. 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.

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.

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

The   Company   reviews  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.  An impairment loss would be recognized whenever  evidence
exists that the carrying value is not recoverable.

Reclassification

Certain  amounts in the fiscal 1996 and 1995 financial  statements  and
supporting  footnote disclosures have been reclassified to  conform  to
the  fiscal  1997 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

Magma Power Company

On  January  10,  1995,  CalEnergy acquired approximately  51%  of  the
outstanding shares of common stock of the Company through a cash tender
offer  and  completed the acquisition on February 24, 1995 by acquiring
the  remaining  49%  of outstanding shares of common  stock  through  a
merger (the "Magma Acquisition").

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.

Edison Mission Energy's Partnership Interest

On  April  17,  1996  the Company completed the acquisition  of  Edison
Mission  Energy's  partnership  interests  (the  "Partnership  Interest
Acquisition") 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.

Unaudited pro forma combined revenue and net income of the Company  and
the  Partnership Interest for the twelve months ended December 31, 1996
and  1995, as if the acquisition had occurred at the beginning of  1995
after  giving  effect to certain pro forma adjustments related  to  the
acquisition were $284,193 and $63,135 compared to $291,812 and $52,477,
respectively.

4. PROPERTIES, PLANTS, CONTRACTS AND EQUIPMENT

Properties,  plants, contracts and equipment comprise the following  at
December 31:
                                       1997        1996

Power plants                          $741,853   $557,006
Wells and resource development         124,500    114,492
Power sales agreements                 264,371    264,371
Licenses and equipment                  46,290     46,290
        Total operating facilities   1,177,014    982,159

Less accumulated depreciation
  and amortization                    (185,085)  (103,702)

   Net operating facilities            991,929    878,457
Mineral reserves                       211,674    189,198

Construction in progress:
 Malitbog                                  ---    155,410
 Other development                       4,002      2,619


 Total                              $1,207,605 $1,225,684

Imperial Valley Project Operating Facilities

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
 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  Imperial  Valley
Project, which comprise approximately 82% of 1997 electricity and steam
revenues, are to Southern California Edison Company ("Edison") and  are
under long-term power purchase contracts.

The   Partnership  Project  sells  all  electricity  generated  by  the
respective plants pursuant to four long-term SO4 Agreements between the
project   and  Edison.   These  SO4  Agreements  provide  for  capacity
payments,  capacity bonus payments and energy payments.   Edison  makes
fixed  annual capacity and capacity bonus payments to the  projects  to
the  extent that capacity factors exceed certain benchmarks.  The price
for  capacity and capacity bonus payments is fixed for the life of  the
SO4  Agreements.  Energy is sold at increasing 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  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  Del  Ranch,  Elmore  and Leathers Partnerships,  respectively.
Excluding  Vulcan, which is receiving Edison's Avoided Cost of  Energy,
the Company's SO4 Agreements provide for energy rates ranging from 13.6
cents  per  kWh  in 1997 to 15.6 cents per kWh in 1999.   The  weighted
average  energy rate for all of the Company's SO4 Agreements  was  10.0
cents per kWh in 1997.

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 5.3 cents per  kWh  during
1997.   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 10.64 per kWh  and  9.84
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.

Salton  Sea  IV 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, 1997 and 1996, Edison's average Avoided
Cost of Energy was 3.3 cents and 2.5 cents per kWh, respectively, which
is  substantially below the contract energy prices earned for the  year
ended December 31, 1997.  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.

Subsidiaries  of  Magma sought new long-term final SO4  power  purchase
agreements  in the Salton Sea area through the bidding process  adopted
by  the California Public Utilities Commission ("CPUC") under its  1992
Biennial  Resource Plan Update ("BRPU").  In its BRPU, the  CPUC  cited
the  need  for an additional 9,600 MW of power production through  1999
among  California's three investor-owned utilities, Edison,  San  Diego
Gas  and  Electric ("SDG&E") and Pacific Gas and Electric Company.   Of
this  amount,  275  MW was set aside for bidding by  independent  power
producers  (such as Magma) utilizing renewable resources.  Pursuant  to
an  order  of  the CPUC dated June 22, 1994 (confirmed on December  21,
1994), Magma was awarded 163 net MW for sale to Edison and SDG&E,  with
in-service  dates in 1997 and 1998.  On February 23, 1995  the  Federal
Energy Regulatory Commission ("FERC") issued an order finding that  the
CPUC's  BRPU program violated the Public Utilities Regulatory  Policies
Act  ("PURPA")  and  FERC's  implementing regulations  and  recommended
negotiated  settlements.   In response, the  CPUC  issued  an  Assigned
Commissioners Ruling encouraging settlements between the final  winning
bidders  and the utilities.  The utilities are expected to continue  to
challenge  the  BRPU  and, in the light of the regulatory  uncertainty,
there  can be no assurance that power sales contracts will be  executed
or  that  any  such  projects will be completed.   In  light  of  these
developments, the Company agreed to execute an agreement with Edison on
March  16,  1995  providing  that  in certain  circumstances  it  would
withdraw  its  Edison  BRPU bid in consideration  for  the  payment  of
certain  sums.   In  December,  1996,  the  Company  entered   into   a
confidential  cash buyout agreement with SDG&E.  These  agreements  are
subject to CPUC approval.

Unit  I  of the Malitbog Project was deemed complete in July  1996  and
Units  II  and  III  in July 1997 at which times such  units  commenced
receiving  capacity  payments  under  the  Malitbog  Energy  Conversion
Agreement ("ECA"). The Malitbog Project is owned and operated by  VGPC,
a  Philippine general partnership that is wholly owned, indirectly,  by
the  Company.  The Malitbog Project is structured as a ten year  Build-
Own-Operate-Transfer  ("BOOT")  project,  in  which  the   Company   is
responsible for providing operations and maintenance for the  ten  year
BOOT period.  The electricity generated by the Malitbog Project is sold
to PNOC-Energy Development Corporation ("PNOC-EDC"), which will in turn
sell  the  power  to the National Power Corporation of the  Philippines
("NPC").  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.

PNOC-EDC  is  obligated to pay for electric capacity that is  nominated
each  year by VGPC, irrespective of whether PNOC-EDC is willing or able
to  accept  delivery  of  such capacity.  VGPC  receives  100%  of  its
revenues  from  such sales in the form of capacity payments.   Payments
under the Malitbog ECA are denominated in U.S. Dollars, or computed  in
U.S.  dollars and paid in Philippine pesos at the then-current exchange
rate.  Significant portions of the capacity fee are indexed to U.S. and
Philippine   inflation   rates,   respectively.    PNOC-EDC's   payment
requirements,  and  its other obligations under the  Malitbog  ECA  are
supported  by  the Government of the Philippines through a  performance
undertaking.

Royalties

Royalty  expense for the years ended December 31, 1997, 1996 and  1995,
which is included in plant operations in the consolidated statements of
operations, comprise the following:

                         1997        1996      1995
 Vulcan                  $ 326       $ 361    $ 1,207
 Leathers                2,694       2,203      1,968
 Elmore                  2,213       1,883      1,713
 Del Ranch               2,650       2,255      1,932
 Salton Sea I & II       1,206         634      1,147
 Salton Sea III          2,439       1,334      2,431
 Salton Sea IV           2,815       1,558          -
      Total            $14,343     $10,228    $10,398

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 1997  was
approximately  6.1%.   The royalties are paid  to  numerous  recipients
based  on varying percentages of electrical revenue or steam production
multiplied by published indices.

5.    CONSTRUCTION LOANS

Draws  on  the  construction  loan for the  Malitbog  geothermal  power
project at December 31, 1997 totaled $176,657. International banks  and
the  Overseas Private Investment Corporation ("OPIC") have provided the
construction  and  term  loan  facilities at  variable  interest  rates
(weighted  average of 8.48% and 8.15% at December 31,  1997  and  1996,
respectively).   The international bank portion of  the  debt  will  be
insured  by  OPIC  against  political risks and  the  Company's  equity
contribution  to VGPC is covered by political risk insurance  from  the
Multilateral  Investment Guarantee Agency and OPIC.   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 1998.

6.   NOTES AND BONDS

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.   Pursuant to separate project financing agreements,  the
assets  of  each  subsidiary are pledged or encumbered  to  support  or
otherwise  provide  the  security for their own project  or  subsidiary
debt.   It  should not be assumed that any asset of any 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.  "Subsidiaries" means
all  of  the  Company's  direct  or indirect  subsidiaries  (1)  owning
interests  in the Imperial Valley and Malitbog projects or  (2)  owning
interests  in  the  subsidiaries that own interests  in  the  foregoing
projects.

Salton Sea Notes and Bonds

The  Salton Sea Funding Corporation, a wholly owned subsidiary  of  the
Company, (the "Funding Corporation") debt securities are as follows:


                                    Final
                                   Maturity          December 31,   December 31,
          Senior Secured Series      Date     Rate       1997           1996
July 21, 1995  A Notes          May 30, 2000  6.69%   $   97,354    $  161,732
July 21, 1995  B Bonds          May 30, 2005  7.37%      133,000       133,000
July 21, 1995  C Bonds          May 30, 2010  7.84%      109,250       109,250
June 20, 1996  D Notes          May 30, 2000  7.02%       44,150        70,000
June 20, 1996  E Bonds          May 30, 2011  8.30%       65,000        65,000
                                                        $448,754      $538,982

Principal  and  interest payments are made in semi-annual installments.
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.  The Salton Sea Notes and Bonds are nonrecourse to CalEnergy.

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

Annual  repayments  of the Salton Sea Notes and  Bonds  for  the  years
beginning January 1, 1998 and thereafter are as follows:

          1998           $106,938
          1999             57,836
          2000             25,072
          2001             22,376
          2002             24,298
          Thereafter      212,234
                         $448,754

On  July 21, 1995, CalEnergy 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, CalEnergy's interest in a secured Magma note and general
assets of CalEnergy equal to the Restricted Payment Recourse Amount (as
defined in the Note Indenture) which was $0 at December 31, 1997.

At  any  time  or  from  time to time on or prior  to  June  30,  1998,
CalEnergy  may,  at its option, use all or a portion of  the  net  cash
proceeds  of  a  CalEnergy  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 CalEnergy, 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.
7.   INCOME TAXES

Provision for income tax is comprised of the following at December 31:
                                1997        1996        1995

Currently payable:
 State                       $ 7,488     $ 6,420     $ 2,228
 Federal                      20,596      11,792       7,656

                              28,084      18,212       9,884

Deferred:
 State                         1,342       1,232         924
 Federal                      15,207       4,908       6,690
 Foreign                         728       1,137         ---
                              17,277       7,277       7,614
 Total                       $45,361     $25,489     $17,498

The deferred expense is primarily temporary differences associated with
depreciation and amortization of certain assets.

A reconciliation of the federal statutory tax rate to the effective tax
rate applicable to income before provision for income taxes follows:
                              1997         1996       1995


Federal statutory rate       35.00%       35.00%      35.00%
Percentage depletion in
  excess of cost depletion   (4.30)       (5.15)      (6.44)
Investment and energy
  tax credits                 (.84)      (12.30)      (2.05)
State taxes, net of federal
 tax effect                   4.74         4.26        4.34
Goodwill amortization         2.24         3.10        4.99
Tax effect of foreign income   .60         1.30         ---
Lease investment               ---          ---       (3.88)
Other                          ---         2.91        (.83)


                             37.44%       29.12%      31.13%


Deferred  tax  liabilities (assets) are comprised of the  following  at
December 31:
                                                 1997       1996

Depreciation and amortization, net             $249,622   $249,453
Unremitted foreign earnings                      14,112        ---
Other                                                77        788
                                                263,811    250,241


Accruals not currently deductible for
  tax purposes                                   (2,304)       ---
Tax credits                                     (19,692)   (33,407)
Jr. SO4 royalty receivable                       (5,865)    (5,865)
Deferred income                                  (7,588)       ---
Other                                              (116)       ---
                                                (35,565)   (39,272)
 Net deferred taxes                            $228,246   $210,969

8.   FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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  in   the
consolidated balance sheets under the indicated captions.


                                       1997                     1996
                                           Estimated               Estimated
                               Carrying       Fair        Carrying    Fair
                                 Value       Value         Value      Value
Construction and project loans 176,657     176,657       137,881     137,881
Salton Sea notes and bonds     448,754     463,720       538,982     531,807
Limited recourse senior
  secured notes                200,000     217,829       200,000     212,560

9.    LITIGATION

As of December 31, 1997 there were no material outstanding lawsuits.




                             EXHIBIT INDEX

3.1  The  Company's Restated Certificate of Incorporation (incorporated
     by  reference  to Exhibit 3.1 of the Company's Form 10-K  for  the
     year ended December 31, 1992, File No. 1-9874 (the "1992 Form  10-
     K")).

3.2  Certificate of Amendment of the Company's Restated Certificate  of
     Incorporation, dated June 23, 1993 (incorporated by  reference  to
     the  Company's  Form  8-A, dated July 28, 1993,  File  No.  1-9874
     ("Form 8-A")).

3.3  Certificate of Amendment of the Company's Restated Certificate  of
     Incorporation dated, February 23, 1995 (incorporated by  reference
     to Exhibit 3.3 to the Company's Form 10-K/A Amendment (dated March
     31,  1995) to the Company's Form 10-K for the year ended  December
     31, 1994, File No. 1-9874 (the "1994 Form 10-K")).

3.4  Certificate  of  Ownership and Merger, effective March  26,  1996.
     (incorporated by reference to Exhibit 3.4 of the Company's Form 10-
     K  for the year ended December 31, 1995, File No. 1-9874 (the 1995
     Form 10-K")).

3.5  Certificate of Amendment to the Company's Restated Certificate  of
     Incorporation dated May 19, 1997.

3.6  The  Company's  By-Laws  as  amended  through  February  21,  1997
     (incorporated by reference to Exhibit 3.6 of the Company's Form 10-
     K for the year ended December 31, 1996, File No. 1-9874 (the "1996
     Form 10-K")).

4.1  Specimen copy of form of Common Stock Certificate (incorporated by
     reference to Exhibit 4.1 to the Company's Form 10-K for  the  year
     ended December 31, 1993, File No. 1-9874 (the "1993 Form 10-K")).

4.2  Shareholders   Rights   Agreement   between   the   Company    and
     Manufacturers  Hanover Trust Company of California dated  December
     1,  1988 (incorporated by reference to Exhibit 1 to Company's Form
     8-K dated December 5, 1988, File No. 1-9874).

4.3  Amendment Number 1 to Shareholder Rights Agreement, dated February
     15,  1991  (incorporated  by  reference  to  Exhibit  4.2  to  the
     Company's 1992 Form 10-K).

4.4  Escrow  Deposit Agreement between Bank of American National  Trust
     and  Savings  Association  and the Company  dated  March  3,  1994
     (incorporated  by reference to Exhibit 4.7 to the  Company's  1993
     Form 10-K).

10.1 Joint  Venture Agreement for China Lake Joint Venture between  the
     Company and Caithness Geothermal 1980 Ltd., restated as of January
     1,  1984  (incorporated  by  reference  to  Exhibit  10.1  to  the
     Company's Registration Statement on Form S-1, 33-7770).

10.2 Amended Joint Venture Agreement for Coso Land Company between  the
     Company  and Caithness Geothermal 1980 Ltd., dated as of  June  1,
     1983  (incorporated by reference to Exhibit 10.3 to the  Company's
     Registration Statement on Form S-1, 33-7770).

10.3 Amended  General  Partnership Agreement for Coso Finance  Partners
     between  China Lake Operating Company and ESCA I L.P.  dated  July
     13,  1988  (incorporated  by reference  to  Exhibit  10.3  to  the
     Company's 1992 Form 10-K).

10.4 First  Supplemental Amendment to the Amended and Restated  General
     Partnership Agreement for Coso Finance Partners between China Lake
     Operating  Company  and  ESCA  L.P.  (Undated)  (incorporated   by
     reference to Exhibit 10.4 to the Company's 1992 Form 10-K).

10.5 Second  Supplemental Amendment to the Amended and Restated General
     Partnership Agreement for Coso Finance Partners between China Lake
     Operating  Company  and  ESCA L.P.  dated  as  of  July  13,  1988
     (incorporated  by reference to Exhibit 10.5 to the Company's  1992
     Form 10-K).

10.6 Third  Supplemental Amendment to the Amended and Restated  General
     Partnership Agreement for Coso Finance Partners between China Lake
     Operating  Company  and ESCA L.P. dated as of  December  16,  1992
     (incorporated  by reference to Exhibit 10.6 to the Company's  1992
     Form 10-K).

10.7 General Partnership Agreement for Coso Finance Partners II between
     China  Lake  Geothermal Management Company and ESCA II L.P.  dated
     July  7,  1987 (incorporated by reference to Exhibit 10.7  to  the
     Company's 1992 Form 10-K).

10.8 Restated  General Partnership Agreement for Coso Energy Developers
     between  Coso  Hotsprings Intermountain Power Inc.  and  Caithness
     Coso  Holdings  L.P. dated as of March 31, 1988  (incorporated  by
     reference to Exhibit 10.8 to the Company's 1992 Form 10-K).

10.9 First Amendment to the Restated General Partnership Agreement  for
     Coso  Energy  Developers  between  Coso  Hotsprings  Intermountain
     Power,  Inc. and Caithness Coso Holdings, L.P. dated as  of  March
     31,  1988  (incorporated  by reference  to  Exhibit  10.9  to  the
     Company's 1992 Form 10-K).

10.10       Second   Amendment  to  the  Restated  General  Partnership
     Agreement  for  Coso  Energy Developers  between  Coso  Hotsprings
     Intermountain Power, Inc. and Caithness Coso Holdings  L.P.  dated
     as  of  December  16, 1992 (incorporated by reference  to  Exhibit
     10.10 to the Company's 1992 Form 10-K).

10.11      Amended and Restated General Partnership Agreement for  Coso
     Power Developers between Coso Technology Corporation and Caithness
     Navy  II Group L.P. dated July 31, 1989 (incorporated by reference
     to Exhibit 10.11 to the Company's 1992 Form 10-K).

10.12       First   Amendment  to  the  Amended  and  Restated  General
     Partnership  for  Coso  Power Developers between  Coso  Technology
     Corporation and Caithness Navy II Group L.P. dated as of March 19,
     1991  (incorporated by reference to Exhibit 10.12 to the Company's
     1992 Form 10-K).

10.13       Second  Amendment  to  the  Amended  and  Restated  General
     Partnership  Agreement  for  Coso Power  Developers  between  Coso
     Technology Corporation and Caithness Navy II Group L.P.  dated  as
     of  December 16, 1992 (incorporated by reference to Exhibit  10.13
     to the Company's 1992 Form 10-K).

10.14      Form of Amended and Restated Field Operation and Maintenance
     Agreement between Coso Joint Ventures and the Company dated as  of
     December  16, 1992 (incorporated by reference to Exhibit 10.14  of
     the Company's 1992 Form 10-K).

10.15       Form   of  Amended  and  Restated  Project  Operation   and
     Maintenance  Agreement between Coso Joint Venture and the  Company
     dated  as  of  December  16, 1992 (incorporated  by  reference  to
     Exhibit 10.15 to the Company's 1992 Form 10-K).

10.16      Trust  Indenture  between Coso Funding  Corp.  and  Bank  of
     America  National  Trust  and  Savings  Association  dated  as  of
     December  16 1992 (incorporated by reference to Exhibit  10.16  to
     the Company's 1992 Form 10-K).

10.17      Form  of Amended and Restated Credit Agreement between  Coso
     Funding  Corp.  and Coso Joint Ventures dated as of  December  16,
     1992  (incorporated by reference to Exhibit 10.17 to the Company's
     1992 Form 10-K).

10.18      Form  of  Support Loan Agreement among Coso  Joint  Ventures
     dated  December  16,  1992 (incorporated by reference  to  Exhibit
     10.18 to the Company's 1992 Form 10-K).

10.19      Form  of  Project Loan Pledge Agreement between  Coso  Joint
     Ventures  and Bank of America National Trust and Savings dated  as
     of  December 16, 1992 (incorporated by reference to Exhibit  10.19
     to the Company's 1992 Form 10-K).

10.20      Power  Purchase Contracts between Southern California Edison
     Company and:
          (a)   China Lake Joint Venture, executed June 4, 1984 with  a
          term of 24 years;
          (b)  China Lake Joint Venture, executed February 1, 1985 with
          a term of 23 years; and
          (c)   Coso Geothermal Company, executed February 1, 1985 with
          a term of 30 years (incorporated by reference to Exhibit 10.7
          to  the  Company's Registration Statement on  Form  S-1,  33-
          7770).

10.21      Contract  No. N62474-79-C-5382 between the United States  of
     America and China Lake Joint Venture, restated October 19, 1983 as
     "Modification    P00004,"    including    modifications    through
     "Modification  P00026",  dated  December  16,  1992   (the   "Navy
     Contract")(incorporated  by reference  to  Exhibit  10.21  to  the
     Company's 1992 Form 10-K).

10.22      Modification  to Contract No. P00028, dated June  28,  1993,
     Modification  to Contract No. P00029, dated October  4,  1994  and
     Modification to Contract No. P00031, dated December 19,  1994  all
     amending the Navy Contract "(incorporated by reference to  Exhibit
     10.22 to the Company's 1994 Form 10-K)."

10.23      Lease  between  the  BLM  and Coso Land  Company,  effective
     November   1,  1985  (with  Designation  of  Geothermal  Operator)
     (incorporated  by  reference  to Exhibit  10.8  to  the  Company's
     Registration Statement on Form S-1, 33-7770).

10.24      1996 Employee Stock Option Plan, as amended (incorporated by
     reference to Exhibit A to the Company's 1996 Proxy Statement).

10.25      1994 Employee Stock Purchase Plan (incorporated by reference
     to Exhibit A to the Company's 1994 Proxy Statement).

10.26      Indenture between the Company and The Chemical Trust Company
     of California dated as of June 24, 1993 (incorporated by reference
     to the Company's Form 8-K dated June 24, 1993, File No. 1-9874).

10.27      Registration  Rights  Agreement among  the  Company,  Lehman
     Brothers, Inc. and Alex Brown & Sons Incorporated dated  June  24,
     1993  (incorporated by reference to the Company's Form  8-K  dated
     June 24, 1993, File No. 1-9874).

10.28      Indenture dated March 24, 1994 between the Company  and  IBJ
     Schroder  Bank  and Trust Company (incorporated  by  reference  to
     Exhibit 3 to the Company's Form 8-K dated March 28, 1994).

10.29     Amended and Restated Employment Agreement between the Company
     and  David  L. Sokol dated as of August 21, 1995 (incorporated  by
     reference to Exhibit 10.82 to the Company's 1995 Form 10-K).

10.30      Restricted Stock Exchange Agreement between the Company  and
     David  L.  Sokol  dated as of November 29, 1995  (incorporated  by
     reference to Exhibit 10.43 to the Company's 1995 Form 10-K).

10.31      Amendment  No.  1  to  the Amended and  Restated  Employment
     Agreement between the Company and David L. Sokol, dated August 28,
     1996  (incorporated by reference to Exhibit 10.43 to the Company's
     1996 Form 10-K).

10.32      Amendment  No.  2  to  the Amended and  Restated  Employment
     Agreement  between the Company and David L. Sokol dated April  16,
     1997.

10.33     Employment Agreement between the Company and Gregory E. Abel,
     dated  August 6, 1996 (incorporated by reference to Exhibit  10.44
     to the Company's 1996 Form 10-K).

10.34      Amendment  No.  1  to the Employment Agreement  between  the
Company and Gregory E. Abel dated April 16,
     1997.

10.35      Employment  Agreement  between  the  Company  and  Craig  M.
     Hammett, dated January 11, 1998.

10.36      Amendment  No.  1  to the Employment Agreement  between  the
     Company and Craig M. Hammett dated January 12, 1998.

10.37      Employment  Agreement  between the  Company  and  Steven  A.
     McArthur,  dated  August  6, 1996 (incorporated  by  reference  to
     Exhibit 10.46 to the Company's 1996 Form 10-K).

10.38      Amendment  No.  1  to the Employment Agreement  between  the
     Company and Steven A. McArthur dated April 16, 1997.

10.39      Standard  Offer Number 2, Standard Offer for Power  Purchase
     with  a Firm Capacity Qualifying Facility effective June 15,  1990
     ("SO2")  between San Diego Gas & Electric Company  and  Bonneville
     Pacific Corporation (incorporated by reference to Exhibit 10.42 to
     the Company's 1993 Form 10-K).

10.40      Amendment  Number  One to the SO2 dated September  25,  1990
     (incorporated by reference to Exhibit 10.43 to the Company's  1993
     Form 10-K).

10.41     Reserved

10.42     Reserved

10.43     Reserved

10.44      Stock  Purchase Agreement between CalEnergy Imperial  Valley
     Company,  Inc. and Edison Mission Energy, dated as  of  March  27,
     1996  (incorporated by reference to Exhibit 10.50 to the Company's
     1995 Form 10-K).

10.45     Standard Offer No. 4 Power Purchase Agreement (Elmore), dated
     June  15,  1984,  between Southern California Edison  Company  and
     Magma  Electric  Company including Amendments  No.  1  and  No.  2
     (incorporated  by  reference  to  Exhibit  10.14  to  Magma  Power
     Company's Amendment No. 1 to Registration Statement Form S-4 dated
     February 2, 1988, ("Magma 1988 Form S-4")).

10.46      Standard  Offer No. 4 Power Purchase Agreement  (Del  Ranch)
     dated  February  22,  1984,  between  Southern  California  Edison
     Company and Imperial Energy Corporation, including Amendments  No.
     1  and  No. 2 (incorporated by reference to Exhibit 10.15  to  the
     Magma 1988 Form S-4).

10.47     Standard Offer No. 4 Power Purchase Agreement (Vulcan), dated
     June  15,  1984,  between Southern California Edison  Company  and
     Magma Electric Company including Amendment No. 1 (incorporated  by
     reference to Exhibit 10.16 to the Magma 1988 Form S-4).

10.48      Standard Offer No. 4 Power Purchase Agreement (River Ranch),
     dated  April 16, 1985, between Southern California Edison  Company
     and  Imperial  Energy  Corporation,  including  Amendment  No.   1
     (incorporated by reference to Exhibit 10.20 to the Magma 1988 Form
     S-4).

10.49      Partnership  Agreement dated August 30, 1985 between  Vulcan
     Power  Company and BN Geothermal, Inc. (incorporated by  reference
     to  Exhibit  10.88 to the Magma Power Company's Form  8  Amendment
     (dated  December 18, 1990) to Magma Power Company's Form 10-K  for
     the year ended December 31, 1989 ("Magma Form 8")).

10.50      Amended  and Restated Limited Partnership Agreement  of  Del
     Ranch,  Ltd.,  a California Limited Partnership, dated  March  14,
     1988  by  and  among Red Hill Geothermal, Inc. and  Conejo  Energy
     Company,  as General Partners, and Magma Power Company and  Conejo
     Energy  Company,  as  Original Limited Partners  (incorporated  by
     reference  to  Exhibit  10.53 to the Magma  Power  Company  Annual
     Report on Form 10-K for the year ended December 31, 1987, File No.
     0-10533 ("1987 Magma Form 10-K")).

10.51     Limited Partnership Agreement of Leathers, L.P., dated August
     15,  1988  by and among Red Hill Geothermal, Inc. and  San  Felipe
     Energy  Company, as General Partners, and Magma Power Company  and
     San  Felipe  Energy Company, as Limited Partners (incorporated  by
     reference  to  Exhibit  10.79 to the Magma  Power  Company  Annual
     Report on Form 10-K for the year ended December 31, 1988, File No.
     0-10533 ("1988 Magma Form 10-K")).

10.52     Amended and Restated Limited Partnership Agreement of Elmore,
     Ltd.,  a  California Limited Partnership, dated March 14, 1988  by
     and among Red Hill Geothermal, Inc. and Niguel Energy Company,  as
     General  Partners,  and  Magma Power  Company  and  Niguel  Energy
     Company,  as  Original Limited Partners (incorporated by reference
     to Exhibit 10.55 to the 1987 Magma Form 10-K).

10.53      Operating and Maintenance Agreement dated March 14, 1988  by
     and  between  Red  Hill Geothermal, Inc. and Del  Ranch,  Ltd.,  a
     California  Limited  Partnership  (incorporated  by  reference  to
     Exhibit 10.56 to the 1987 Magma Form 10-K).

10.54      First Amendment to Operating and Maintenance Agreement dated
     as  of  April 14, 1989 between Red Hill Geothermal, Inc.  and  Del
     Ranch  L.P.  and  the  Second  Amendment  to  the  Operating   and
     Maintenance  Agreement  dated April  18,  1990  "(incorporated  by
     reference  to Exhibit 10.60 to the Company's Form 10-K/A Amendment
     (dated March 31, 1995) to the Company's 1994 Form 10-K)."

10.55      Operating and Maintenance Agreement dated August 15, 1988 by
     and   between  Red  Hill  Geothermal,  Inc.  and  Leathers,   L.P.
     (incorporated by reference to Exhibit 10.84 to the 1988 Magma Form
     10-K).

10.56      First Amendment to Operating and Maintenance Agreement dated
     as  of  April  14,  1989  between Red Hill  Geothermal,  Inc.  and
     Leathers,  L.P.  and  the Second Amendment to  the  Operating  and
     Maintenance  Agreement  dated April  18,  1990  "(incorporated  by
     reference to Exhibit 10.62 to the Company's 1994 Form 10-K)."

10.57      Operating and Maintenance Agreement dated March 14, 1988  by
     and  between  Red  Hill  Geothermal,  Inc.  and  Elmore,  Ltd.,  a
     California  Limited  Partnership  (incorporated  by  reference  to
     Exhibit 10.57 to the 1987 Magma Form 10-K).

10.58      First  Amendment to the Operating and Maintenance  Agreement
     dated  as of April 14, 1988 between Red Hill Geothermal, Inc.  and
     Elmore,  Ltd.,  a California Limited Partnership  and  the  Second
     Amendment  to the Operating and Maintenance Agreement dated  April
     18,  1990  "(incorporated by reference to  Exhibit  10.64  to  the
     Company's 1994 Form 10-K)."

10.59      Brine  Sales Agreement dated August 30, 1985 between  Vulcan
     Power Company and Vulcan/BN Geothermal Power Company (incorporated
     by  reference to Exhibit 10.90 to the Magma Power Company  Form  8
     Amendment  (dated  December 18, 1990) to the Magma  Power  Company
     Form 10-K for the year ended December 31, 1989).

10.60      Easement  Grant  Deed  and Agreement  Regarding  Rights  for
     Geothermal  Development dated March 14, 1988 by and between  Magma
     Power   Company   and  Del  Ranch,  Ltd.,  a  California   Limited
     Partnership  (incorporated by reference to Exhibit  10.58  to  the
     1987 Magma Form 10-K).

10.61      Easement  Grant  Deed  and Agreement  Regarding  Rights  for
     Geothermal Development dated August 15, 1988 by and between  Magma
     Power Company and Leathers, L.P. (incorporated by reference to the
     1988 Magma Form 10-K).

10.62      Easement  Grant  Deed  and Agreement  Regarding  Rights  for
     Geothermal  Development dated March 14, 1988 by and between  Magma
     Power  Company and Elmore, Ltd., a California Limited  Partnership
     (incorporated by reference to Exhibit 10.59 to the 1987 Magma Form
     10-K).

10.63     Administrative Services Agreement dated March 14, 1988 by and
     between  Red  Hill  Geothermal,  Inc.  and  Del  Ranch,  Ltd.,   a
     California Limited Partnership (incorporated by reference  to  the
     1987 Magma Form 10-K).

10.64      Administrative Services Agreement dated August 15,  1988  by
     and   between  Red  Hill  Geothermal,  Inc.  and  Leathers,   L.P.
     (incorporated by reference to Exhibit 10.82 to the 1988 Magma Form
     10-K).

10.65     Administrative Services Agreement dated March 14, 1988 by and
     between  Red  Hill Geothermal Inc. and Elmore, Ltd., a  California
     Limited Partnership (incorporated by reference to Exhibit 10.63 to
     the 1987 Magma Form 10-K).

10.66      Amended and Restated Credit Agreement dated as of April  18,
     1990  among Del Ranch, Ltd. a California Limited Partnership,  the
     Banks  Listed  therein, and Morgan Guaranty Trust Company  of  New
     York, as Agent (incorporated by reference to Exhibit 10.72 to  the
     Company's 1994 Form 10-K).

10.67      LOC Debt Facility Agreement dated as of April 18, 1990 among
     Del  Ranch,  Ltd.,  a  California Limited Partnership,  the  Banks
     listed  therein, Morgan Guaranty Trust Company of New York as  the
     Agent and Fuji Bank, Limited, Los Angeles Agency, as Fronting Bank
     (incorporated by reference to Exhibit 10.73 to the Company's  1994
     Form 10-K).

10.68      Security  Agreement dated March 14, 1988  among  Del  Ranch,
     Ltd.,  a  California  Limited Partnership, Morgan  Guaranty  Trust
     Company  of  New York, as Agent for and on behalf  of  the  Banks,
     Morgan  Guaranty  Trust Company of New York, and  Morgan  Guaranty
     Trust  Company  of  New York, as Security Agent  (incorporated  by
     reference to the 1987 Magma Form 10-K).

10.69      Amendment Number One to Security Agreement dated as of April
     14, 1989, and Amendment Number Two to the Security Agreement dated
     April  18,  1990  among  Del  Ranch, Ltd.,  a  California  Limited
     Partnership, Morgan Guaranty Trust Company of New York,  as  Agent
     for  and on behalf of the Banks, Morgan Guaranty Trust Company  of
     New York and Morgan Guaranty Trust Company of New York as Security
     Agent (incorporated by reference to Exhibit 10.75 to the Company's
     1994 Form 10-K).

10.70      Deed  of Trust, Assignment of Rents, Security Agreement  and
     Fixture  Filing Construction Deed of Trust dated as of  March  14,
     1988  among  Del  Ranch, Ltd., a California  Limited  Partnership,
     Ticor  Title Insurance Company of California, and Morgan  Guaranty
     Trust  Company  of  New  York as Security Agent  (incorporated  by
     reference to the 1987 Magma Form 10-K).

10.71      First  Amendment to the Deed of Trust, dated April 18,  1990
     between Del Ranch, Ltd. and Morgan Guaranty Trust Company  of  New
     York  (incorporated by reference to Exhibit 10.77 to the Company's
     1994 Form 10-K).

10.72      Amended and Restated Credit Agreement dated as of April  18,
     1990  among  Elmore, Ltd., a California Limited  Partnership,  the
     Banks  Listed  therein, and Morgan Guaranty Trust Company  of  New
     York, as Agent (incorporated by reference to Exhibit 10.78 to  the
     Company's 1994 Form 10-K).

10.73      LOC Debt Facility Agreement dated as of April 18, 1990 among
     Elmore,  Ltd., a California Limited Partnership, the Banks  listed
     therein,  Morgan Guaranty Trust Company of New York as  Agent  and
     Fuji   Bank,  Limited,  Los  Angeles  Agency,  as  Fronting   Bank
     (incorporated by reference to Exhibit  10.79 to the Company's 1994
     Form 10-K).

10.74     Security Agreement dated March 14, 1988 among Elmore, Ltd., a
     California  Limited Partnership, Morgan Guaranty Trust Company  of
     New York, as Agent for and on behalf of the Banks, Morgan Guaranty
     Trust  Company of New York, and Morgan Guaranty Trust  Company  of
     New  York, as Security Agent (incorporated by reference to Exhibit
     10.71 to the 1987 Magma Form 10-K).

10.75      Amendment Number One to Security Agreement dated as of April
     14, 1989 among Elmore Ltd and Morgan Guaranty Trust Company of New
     York  and  Amendment Number Two to Security Agreement dated  April
     18,  1990 among Elmore, L.P., Morgan Guaranty Trust Company of New
     York,  as Agent, on behalf of the Banks (incorporated by reference
     to Exhibit 10.81 to the Company's 1994 Form 10-K).

10.76      Deed  of Trust, Assignment of Rents, Security Agreement  and
     Fixture  Filing Construction Deed of Trust dated as of  March  14,
     1988  among Elmore, Ltd., a California Limited Partnership,  Ticor
     Title
     Insurance Company of California, and Morgan Guaranty Trust Company
     of  New  York  as  Security Agent (incorporated  by  reference  to
     Exhibit 10.73 to the 1987 Magma Form 10-K).

10.77     First Amendment to Deed of Trust dated April 18, 1990 between
     Elmore,  Ltd.  and Morgan Guaranty Trust Company of New  York,  as
     Security Agent (incorporated by reference to Exhibit  10.83 to the
     Company's 1994 Form 10-K).

10.78      Amended  and Restated Credit Agreement dated April 18,  1990
     among  Leathers  L.P.  and  the Banks listed  therein  and  Morgan
     Guaranty  Trust  Company  of New York as  Agent  (incorporated  by
     reference to Exhibit 10.84 to the Company's 1994 Form 10-K).

10.79      Security Agreement dated March 14, 1988 among Leathers L.P.,
     a California Limited Partnership, Morgan Guaranty Trust Company of
     New York, as Agent for and on behalf of the Banks, Morgan Guaranty
     Trust  Company of New York, and Morgan Guaranty Trust  Company  of
     New  York,  as  Security Agent, Amendment Number One  to  Security
     Agreement dated as of April 14, 1989 and Amendment Number  Two  to
     Security  Agreement  dated as of April 18, 1990  (incorporated  by
     reference to Exhibit 10.85 to the Company's 1994 Form 10-K).

10.80      Deed  of Trust, Assignment of Rents, Security Agreement  and
     Fixture  Filing Construction Deed of Trust dated as of  March  14,
     1988 among Leathers, L.P., a California Limited Partnership, Ticor
     Title  Insurance Company of California, and Morgan Guaranty  Trust
     Company of New York as Security Agent and First Amendment to  Deed
     of  Trust  dated  April  18, 1990 (incorporated  by  reference  to
     Exhibit 10.85 to the Company's 1994 Form 10-K).

10.81      LOC Debt Facility Agreement dated as of April 18, 1990 among
     Leathers, L.P., a California Limited Partnership, the Banks listed
     therein,  Morgan Guaranty Trust Company of New York as  Agent  and
     Fuji   Bank,  Limited,  Los  Angeles  Agency,  as  Fronting   Bank
     (incorporated by reference to Exhibit 10.87 to the Company's  1994
     Form 10-K).

10.82     Loan Agreement dated as of October 1, 1990 between California
     Pollution  Control Financing Authority and Desert Valley  Company,
     relating  to the California Pollution Control Financing  Authority
     Pollution Control Revenue Bonds Small Business Series 1990-A  (the
     "$4,000,000  Monofill Bond Financing") (incorporated by  reference
     to Exhibit 10.92 to the Magma Power Company Form 10-K for the year
     ended December 31, 1990, File No. 0-10533 (the "1990 Magma Form 10-
     K")).

10.83      Master Reimbursement Agreement dated as of October 1,  1990,
     by and among the California Pollution Control Financing Authority,
     Desert  Valley  Company and the Sanwa Bank, Limited,  Los  Angeles
     Branch,   relating  to  the  $4,000,000  Monofill  Bond  Financing
     (incorporated by reference to Exhibit 10.93 to the 1990 Magma Form
     10-K).

10.84      Sale  and  Purchase Agreement between Union Oil  Company  of
     California  and Magma Power Company effective as of  December  31,
     1992  (incorporated  by reference to Exhibit 10.97  to  the  Magma
     Power Company Form 8 dated June 2, 1993).

10.85     Contract for the Purchase and Sale of Electric Power (Unit I)
     from   the  Salton  Sea  Geothermal  Generating  Facility  between
     Southern  California Edison Company and Earth Energy, Inc.,  dated
     May  8,  1987,  including Amendment No. 1 to such contract,  dated
     March 30, 1993 (incorporated by reference to Exhibit 10.101 to the
     Magma  Power  Company Form 10-K for the year  ended  December  31,
     1993, File No. 0-10533, (the "1993 Magma Form 10-K")).

10.86      Power  Purchase  Contract (Unit II) by and between  Southern
     California  Edison Company and Westmoreland Geothermal Associates,
     dated  April 16, 1985, including Amendment No. 1 to such contract,
     dated  December  18,  1987 (incorporated by reference  to  Exhibit
     10.102 to the 1993 Magma Form 10-K).

10.87       Power   Purchase  Contract  (Unit  III)  between   Southern
     California  Edison Company and Union Oil Company Salton  Sea  III,
     dated  April 16, 1985 (incorporated by reference to the 1993 Magma
     Form 10-K).

10.88      Consolidated, Amended and Restated Power Purchase  Agreement
     (Unit IV) between Southern California Edison Company and Fish Lake
     Power  Company and Salton Sea Power Generation, L.P. (incorporated
     by reference to Exhibit 10.9 to the Registration Statement on Form
     S-4  dated  August 9, 1995 of Salton Sea Funding  Corporation  33-
     95538 (the "Funding Corporation S-4").

10.89      125  MW  Power  Plant - Upper Mahiao Agreement  (the  "Upper
     Mahiao   ECA")   dated  September  6,  1993  between   PNOC-Energy
     Development Corporation ("PNOC-EDC") and Ormat, Inc. as amended by
     the  First  Amendment to 125 MW Power Plant Upper Mahiao Agreement
     dated  as of January 28, 1994, the Letter Agreement dated February
     10,  1994,  the Letter Agreement dated February 18, 1994  and  the
     Fourth  Amendment  to 125 MW Power Plant - Upper Mahiao  Agreement
     dated  as  of March 7, 1994 (incorporated by reference to  Exhibit
     10.95 to the Company's 1994 Form 10-K).

10.90     Credit Agreement dated April 8, 1994 among CE Cebu Geothermal
     Power  Company,  Inc.,  the Banks thereto, Credit  Size  as  Agent
     (incorporated by reference to Exhibit 10.96 to the Company's  1994
     Form 10-K).

10.91      Credit  Agreement dated as of April 8, 1994 between CE  Cebu
     Geothermal  Power Company, Inc., Export-Import Bank of the  United
     States  (incorporated  by  reference  to  Exhibit  10.97  to   the
     Company's 1994 Form 10-K).

10.92      Pledge Agreement among CE Philippines Ltd, Ormat-Cebu  Ltd.,
     Credit  Suisse  as  Collateral Agent and CE Cebu Geothermal  Power
     Company, Inc. dated as of April 8, 1994 (incorporated by reference
     to Exhibit 10.98 to the Company's 1994 Form 10-K).

10.93     Overseas Private Investment Corporation Contract of Insurance
     dated  April  8,  1994  between  the Overseas  Private  Investment
     Corporation  ("OPIC") and the Company through its subsidiaries  CE
     International  Ltd.,  CE  Philippines Ltd.,  and  Ormat-Cebu  Ltd.
     (incorporated by reference to Exhibit  10.99 to the Company's 1994
     Form 10-K).

10.94      180  MW  Power  Plant - Mahanagdong Agreement  ("Mahanagdong
     ECA") dated September 18, 1993 between PNOC-EDC and CE Philippines
     Ltd.  and  the  Company,  as amended by  the  First  Amendment  to
     Mahanagdong  ECA  dated June 22, 1994, the Letter Agreement  dated
     July  12, 1994, the Letter Agreement dated July 29, 1994, and  the
     Fourth   Amendment  to  Mahanagdong  ECA  dated  March   3,   1995
     (incorporated by reference to Exhibit 10.100 to the Company's 1994
     Form 10-K).

10.95      Credit  Agreement dated as of June 30, 1994 among  CE  Luzon
     Geothermal Power Company, Inc., American Pacific Finance  Company,
     the  Lenders party thereto, and Bank of America National Trust and
     Savings  Association  as  Administrative  Agent  (incorporated  by
     reference to Exhibit 10.101 to the Company's 1994 Form 10-K).

10.96      Credit Agreement dated as of June 30, 1994 between CE  Luzon
     Geothermal  Power  Company,  Inc. and Export-Import  Bank  of  the
     United States (incorporated by reference to Exhibit 10.102 to  the
     Company's 1994 Form 10-K).

10.97      Finance Agreement dated as of June 30, 1994 between CE Luzon
     Geothermal  Power  Company, Inc. and Overseas  Private  Investment
     Corporation  (incorporated by reference to Exhibit 10.103  to  the
     Company's 1994 Form 10-K).

10.98      Pledge  Agreement  dated  as  of  June  30,  1994  among  CE
     Mahanagdong Ltd., Kiewit Energy International (Bermuda) Ltd., Bank
     of  America  National Trust and Savings Association as  Collateral
     Agent and CE Luzon Geothermal Power Company, Inc. (incorporated by
     reference to Exhibit 10.104 to the Company's 1994 Form 10-K).

10.99     Overseas Private Investment Corporation Contract of Insurance
     dated July 29, 1994 between OPIC and the Company, CE International
     Ltd., CE Mahanagdong Ltd. and American Pacific Finance Company and
     Amendment No. 1 dated August 3, 1994 (incorporated by reference to
     Exhibit 10.105 to the Company's 1994 Form 10-K).

10.100     231  MW  Power  Plant - Malitbog Agreement ("Malitbog  ECA")
     dated  September 10, 1993 between PNOC-EDC and Magma Power Company
     and the First and Second Amendments thereto dated December 8, 1993
     and  March  10, 1994, respectively (incorporated by  reference  to
     Exhibit 10.106 to the Company's 1994 Form 10-K).

10.101     Credit Agreement dated as of November 10, 1994 among Visayas
     Power  Capital Corporation, the Banks parties thereto  and  Credit
     Suisse Bank Agent (incorporated by reference to Exhibit 10.107  to
     the Company's 1994 Form 10-K).

10.102     Finance  Agreement  dated as of November  10,  1994  between
     Visayas  Geothermal Power Company and Overseas Private  Investment
     Corporation  (incorporated by reference to Exhibit 10.108  to  the
     Company's 1994 Form 10-K).

10.103     Pledge and Security Agreement dated as of November 10,  1994
     among  Broad Street Contract Services, Inc., Magma Power  Company,
     Magma   Netherlands  B.V.  and  Credit  Suisse   as   Bank   Agent
     (incorporated by reference to Exhibit 10.109 to the Company's 1994
     Form 10-K).

10.104    Overseas Private Investment Corporation Contract of Insurance
     dated  December 21, 1994 between OPIC and Magma Netherlands,  B.V.
     (incorporated by reference to Exhibit 10.110 to the Company's 1994
     Form 10-K).

10.105     Agreement  as to Certain Common Representations, Warranties,
     Covenants and Other Terms, dated November 10, 1994 between Visayas
     Geothermal  Power  Company,  Visayas  Power  Capital  Corporation,
     Credit  Suisse,  as Bank Agent, OPIC and the Banks  named  therein
     (incorporated by reference to Exhibit 10.111 to the Company's 1994
     Form 10-K).

10.106     Indenture  dated  as  of July 21, 1995  between  Salton  Sea
     Funding  Corporation ("Funding Corporation")  and  Chemical  Trust
     Company of California (incorporated by reference to Exhibit 4.1(a)
     to the Funding Corporation Form S-4).

10.107     First  Supplemental Indenture dated as of October  18,  1995
     between   Funding  Corporation  and  Chemical  Trust  Company   of
     California  (incorporated by reference to Exhibit  4.1(b)  to  the
     Funding Corporation Form S-4).

10.108    Indenture dated July 1995 between the Company and The Bank of
     New York (incorporated by reference to the Company's Amendment No.
     1 to Registration Statement on Form S-3 dated May 17, 1995).

10.109     Trust Indenture dated as of November 27, 1995 between the CE
     Casecnan  Water  and  Energy Company,  Inc.  ("CE  Casecnan")  and
     Chemical Trust Company of California (incorporated by reference to
     Exhibit  4.1 to CE Casecnan's Registration Statement on  Form  S-4
     dated January 25, 1996 ("Casecnan S-4")).

10.110     Modification to Contract No. P00019 dated  August  1,  1995,
     Modification  to  Contract  No.  P00020  dated  August  1,   1995,
     Modification  to Contract No. P00034 dated February  8,  1995  and
     Modification  to  Contract  No. P00035  dated  February  8,  1995,
     amending  the Navy Contract (incorporated by reference to  Exhibit
     10.110 to the Company's 1996 Form 10-K).

10.111      Plant  Connection  Agreement  between  Imperial  Irrigation
     District and Salton Sea Power Generation L.P. and Fish Lake  Power
     Company  dated July 14, 1995 (incorporated by reference to Exhibit
     10.15 to the Funding Corporation S-4).

10.112     Transmission Services Agreement between Imperial  Irrigation
     District and Salton Sea Power Generation L.P. and Fish Lake  Power
     Company  dated July 14, 1995 (incorporated by reference to Exhibit
     10.17 to the Funding Corporation S-4).

10.113    Second Amended and Restated Administrative Services Agreement
     among  CalEnergy  Operation Company, Salton Sea  Brine  Processing
     L.P., Salton Sea Power Generation L.P. and Fish Lake Power Company
     dated July 15, 1995 (incorporated by reference to Exhibit 10.20 to
     the Funding Corporation S-4).

10.114      Second  Amended  and  Restated  Operating  and  Maintenance
     Agreement  among Magma Power Company, Salton Sea Brine  Processing
     L.P.,  Salton  Sea  Power Generation L.P.,  and  Fish  Lake  Power
     Company  dated July 15, 1995 (incorporated by reference to Exhibit
     10.21 to the Funding Corporation S-4).

10.115     Amended and Restated Casecnan Project Agreement between  the
     National  Irrigation  Administration and  CE  Casecnan  Water  and
     Energy Company Inc. dated June 26, 1995 (incorporated by reference
     to Exhibit 10.1 to the Casecnan Form S-4).

10.116     Stock Purchase Agreement, dated as of July 3, 1996,  by  and
     among  CE/FS  Holding  Company, Inc., David H.  Dewhurst  and  all
     remaining  owners  of capital stock of Falcon Seaboard  Resources,
     Inc.  (incorporated by reference to Exhibit 99.1 to the  Company's
     Form 8-K, dated July 8, 1996, File No. 1-9874).

10.117     Indenture  for  the  6 1/4% Convertible Junior  Subordinated
     Debentures,  dated  as of April 1, 1996, among CalEnergy  Company,
     Inc.,   as   Issuer,  and  the  Bank  of  New  York,  as   Trustee
     (incorporated by reference to Exhibit 4.3 to Amendment  1  to  the
     Company's Registration Statement on Form S-3, Registration No. 333-
     08315).

10.118     Indenture,  dated  as  of September 20,  1996,  between  the
     Company  and  IBJ  Schroder  Bank &  Trust  Company,  as  trustee,
     relating  to $225,000,000 principal amount of 9 1/4% Senior  Notes
     due  2006  (incorporated  by  reference  to  Exhibit  4.1  to  the
     Company's Registration Statement on Form S-3, Registration No. 333-
     15591).

10.119     Second  Supplemental Indenture, dated as of June  20,  1996,
     between   Chemical  Trust  Company  of  California   and   Funding
     Corporation  (incorporated  by  reference  to  Exhibit  4.1(c)  to
     Amendment   No.  1  to  the  Funding  Corporation's   Registration
     Statement on Form S-4, Registration No. 333-07527 ("Funding  Corp.
     II S-4").

10.120     Third Supplemental Indenture, between Chemical Trust Company
     of   California  and  the  Funding  Corporation  (incorporated  by
     reference to Exhibit 4.1(d) to the Funding Corp. II S-4).

10.121     Indenture  for  the  6 1/4% Convertible Junior  Subordinated
     Debentures  due 2012, dated as of February 26, 1997,  between  the
     Company,  as  issuer,  and  the  Bank  of  New  York,  as  Trustee
     (incorporated by reference to Exhibit 10.129 to the Company's 1996
     Form 10-K).

10.122     Term  Loan  and Revolving Facility Agreement,  dated  as  of
     October  28,  1996, among CE Electric UK Holdings, CE Electric  UK
     plc and Credit Suisse (incorporated by reference to Exhibit 10.130
     to the Company's 1996 Form 10-K).

10.123     Public Electricity Supply License (incorporated by reference
     to Exhibit 10.131 to the Company's 1996 Form 10-K)

10.124    Second Tier Supply Licenses to Supply Electricity for England
     &  Wales and Scotland (incorporated by reference to Exhibit 10.132
     to the Company's 1996 Form 10-K).

10.125    Pooling and Settlement Agreement for the Electricity Industry
     in  England and Wales dated 30th March, 1990 (as amended  at  17th
     October,   1996),  among  The  Generators  (named  therein),   the
     Suppliers  (named  therein),  Energy Settlements  and  Information
     Services Limited (as Settlement System Administrator), Energy Pool
     Funds   Administration  Limited  (as  Pool  Funds  Administrator),
     Scottish  Power  plc, Electricite deFrance, Service  National  and
     Others  (incorporated  by  reference  to  Exhibit  10.133  to  the
     Company's 1996 Form 10-K).

10.126    Master Connection and User System Agreement with The National
     Grid  Company plc (incorporated by reference to Exhibit 10.134  to
     the Company's 1996 Form 10-K).

10.127     Gas  Suppliers License dated February 21, 1996 (incorporated
     by reference to Exhibit 10.135 to the Company's 1996 Form 10-K).

10.128     First Supplemental Trust Indenture dates as of February  18,
     1997   between  Coso  Funding  Corp.  and  First  Bank,   National
     Association (successor to Bank of America Nation Trust and Savings
     Association) (incorporated by reference to Exhibit 10.136  to  the
     Company's 1996 Form 10-K).

10.129      Form   First  Amendment  to  Amended  and  Restated  Credit
     Agreement,  dated February 18, 1997, between First Bank,  National
     Association  (as  successor to Coso Funding Corp.)  and  the  Coso
     Joint Ventures (incorporated by reference to Exhibit 10.137 to the
     Company's 1996 Form 10-K).

10.130     Omnibus Acknowledgment and Agreement dated February 18, 1997
     between  Coso Funding Corp., the Coso Joint Ventures, First  Bank,
     National  Association  and others (incorporated  by  reference  to
     Exhibit 10.138 to the Company's 1996 Form 10-K).

10.131     Registration Rights Agreement, dated August 12, 1997, by and
     among CalEnergy Capital Trust III, CalEnergy Company, Inc., Credit
     Suisse   First  Boston  Corporation  and  Lehman  Brothers,   Inc.
     (incorporated   by  reference  Exhibit  10.1  to   the   Company's
     Registration Statement and on Form S-3, No. 333-45615).

10.132     Acquisition Agreement by and between CalEnergy Company, Inc.
     and  Kiewit Diversified Group Inc. dated as of September 10,  1997
     (incorporated  by reference to Exhibit 2 to the Company's  Current
     Report on Form 8-K dated September 11, 1997).

10.133     Indenture, dated as of October 15, 1997, among  the  Company
     and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by
     reference to Exhibit 4.1 to the Company's Current Report on Form 8-
     K dated October 23, 1997).

10.134    Form of First Supplemental Indenture, dated as of October 28,
     1997, among the Company and IBJ Schroder Bank & Trust Company,  as
     Trustee (incorporated by reference to Exhibit 4.2 to the Company's
     Current Report on Form 8-K dated October 23, 1997).

13.0 The  Company's  1997  Annual  Report (only  the  portions  thereof
     specifically  incorporated herein by reference  are  deemed  filed
     herewith).

21.0 Subsidiaries of Registrant.

23.0 Consent of Independent Auditors.

24.0 Power of Attorney.

27.1 Financial Data Schedule.

27.2 Restated Financial Data Schedule - fiscal year ended December  31,
     1995 and 1996 and the three, six, and nine months ended March  31,
     1996, June 30, 1996 and September 30, 1996, respectively.

27.3 Restated  Financial  Data Schedule - three, six  and  nine  months
     ended  March  31,  1997,  June 30, 1997 and  September  30,  1997,
     respectively.