SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

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

                  For     the quarterly  period ended March 31, 2000  Commission
                          File No. 33-95538

                         SALTON SEA FUNDING CORPORATION
             (Exact name of registrant as specified in its charter)

                                   47-0790493

                        (IRS Employer Identification No.)

         Salton Sea Brine Processing L.P.      California         33-0601721
         Salton Sea Power Generation L.P.      California         33-0567411
         Fish Lake Power LLC                   Delaware           33-0453364
         Vulcan Power Company                  Nevada             95-3992087
         CalEnergy Operating Corporation       Delaware           33-0268085
         Salton Sea Royalty LLC                Delaware           47-0790492
         VPC Geothermal LLC                    Delaware           91-1244270
         San Felipe Energy Company             California         33-0315787
         Conejo Energy Company                 California         33-0268500
         Niguel Energy Company                 California         33-0268502
         Vulcan/BN Geothermal Power Company    Nevada             33-3992087
         Leathers, L.P.                        California         33-0305342
         Del Ranch, L.P.                       California         33-0278290
         Elmore, L.P.                          California         33-0278294
         Salton Sea Power L.L.C.               Delaware           47-0810713
         CalEnergy Minerals LLC                Delaware           47-0810718
         CE Turbo LLC                          Delaware           47-0812159
         CE Salton Sea Inc.                    Delaware           47-0810711
         Salton Sea Minerals Corp.             Delaware           47-0811261
 (Exact name of Registrants                (State or other    (I.R.S. Employer
as specified in their charters)           jurisdiction of    Identification No.)
                                   incorporation or organization)

302 S. 36th Street, Suite 400-A, Omaha, NE 68131 (Address of principal executive
offices and Zip Code of Salton Sea Funding Corporation)

Salton Sea Funding  Corporation's  telephone number,  including area code: (402)
231-1641

     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

     All common stock of Salton Sea Funding  Corporation  is indirectly  held by
Magma Power  Company.  100 shares of Common Stock were  outstanding on March 31,
2000.

<PAGE>

                         SALTON SEA FUNDING CORPORATION

                                    Form 10-Q

                                 March 31, 2000

                                  -------------

                                 C O N T E N T S


                          PART I: FINANCIAL INFORMATION

Item 1.          Financial Statements                                       Page

SALTON SEA FUNDING CORPORATION

Independent Accountants' Report                                               4

Balance Sheets, March 31, 2000 and December 31, 1999                          5

Statements of Operations for the Three Months Ended

    March 31, 2000 and 1999                                                   6

Statements of Cash Flows for the Three Months Ended
    March 31, 2000 and 1999                                                   7

Notes to Financial Statements                                                 8

SALTON SEA GUARANTORS

Independent Accountants' Report                                               9

Combined Balance Sheets, March 31, 2000 and December 31, 1999                10

Combined Statements of Operations for the Three Months Ended
    March 31, 2000 and 1999                                                  11

Combined Statements of Cash Flows for the Three Months Ended
    March 31, 2000 and 1999                                                  12

Notes to Combined Financial Statements                                       13
<PAGE>

PARTNERSHIP GUARANTORS

Independent Accountants' Report                                              14

Combined Balance Sheets, March 31, 2000 and December 31, 1999                15

Combined Statements of Operations for the Three Months Ended
    March 31, 2000 and 1999                                                  16

Combined Statements of Cash Flows for the Three Months Ended
    March 31, 2000 and 1999                                                  17

Notes to Combined Financial Statements                                       18

SALTON SEA ROYALTY LLC

Independent Accountants' Report                                              19

Balance Sheets, March 31, 2000 and December 31, 1999                         20

Statements of Operations for the Three Months Ended

    March 31, 2000 and 1999                                                  21

Statements of Cash Flows for the Three Months Ended
    March 31, 2000 and 1999                                                  22

Notes to Financial Statements                                                23

Item 2.          Management's Discussion and Analysis of

                 Financial Condition and Results of Operations               24


                           PART II: OTHER INFORMATION

Item 1.          Legal Proceedings                                           32
Item 2.          Changes in Securities                                       32
Item 3.          Defaults on Senior Securities                               32
Item 4.          Submission of Matters to a Vote of
                 Security Holders                                            32
Item 5.          Other Information                                           32
Item 6.          Exhibits and Reports on Form 8-K                            32

Signatures                                                                   33

Exhibit Index                                                                34

<PAGE>

INDEPENDENT ACCOUNTANTS' REPORT

Board of Directors and Stockholder
Salton Sea Funding Corporation
Omaha, Nebraska

We have  reviewed  the  accompanying  balance  sheet of the Salton  Sea  Funding
Corporation as of March 31, 2000,  and the related  statements of operations and
cash flows for the three month  periods  ended  March 31,  2000 and 1999.  These
financial statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to such financial statements for them to be in conformity with generally
accepted  accounting  principles  generally  accepted  in the  United  States of
America.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the balance sheet of Salton Sea Funding  Corporation  as of December
31, 1999, and the related  statements of operations,  stockholder's  equity, and
cash  flows for the year then ended (not  presented  herein);  and in our report
dated January 25, 2000, we expressed an unqualified  opinion on those  financial
statements.  In our  opinion,  the  information  set  forth in the  accompanying
balance  sheet  as of  December  31,  1999 is  fairly  stated,  in all  material
respects, in relation to the balance sheet from which it has been derived.

DELOITTE & TOUCHE LLP
Omaha, Nebraska
April 21, 2000

<PAGE>

                         SALTON SEA FUNDING CORPORATION

                                 BALANCE SHEETS
                (Dollars in Thousands, Except per Share Amounts)



                                                 March 31,          December 31,
                                                   2000                 1999
                                                -----------          ----------
                                                (unaudited)
ASSETS

Cash                                              $  10,720          $   2,086
Prepaid expenses and other assets                    14,494              3,617
Due from affiliates                                     ---              2,118
Current portion secured project notes
  from Guarantors                                    25,072             25,072
Total current assets                                 50,286             32,893

Secured project notes from Guarantors               543,908            543,908
Investment in 1% of net assets of
    Guarantors                                        8,805              8,847
                                                 ----------         ----------
                                                  $ 602,999          $ 585,648
                                                 ==========         ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Accrued liabilities                               $  14,389          $   3,607
Due to affiliates                                     6,628                ---
Current portion long term debt                       25,072             25,072
Total current liabilities                            46,089             28,679

Senior secured notes and bonds                      543,908            543,908
                                                 ----------         ----------
    Total liabilities                               589,997            572,587

Stockholder's equity:
Common stock--authorized 1,000
    shares, par value $.01 per share;
    issued and outstanding 100 shares                   ---                ---
Additional paid-in capital                            5,366              5,366
Retained earnings                                     7,636              7,695
                                                 ----------         ----------
    Total stockholder's equity                       13,002             13,061
                                                 ----------         ----------
                                                  $ 602,999          $ 585,648
                                                 ==========         ==========

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

<PAGE>

                         SALTON SEA FUNDING CORPORATION

                            STATEMENTS OF OPERATIONS

                             (Dollars in Thousands)

                                   (Unaudited)

                                                         Three Months Ended
                                                            March 31,
                                                        2000            1999
Revenues:

Interest income                                 $      10,963         $  12,129
Equity in earnings (loss) of Guarantors                   (42)              116
                                                    -    ----          --------
Total revenues                                         10,921            12,245
                                                    ---------          --------

Expenses:

General and administrative expenses                       259               215
Interest expense                                       10,763            11,737
                                                    ---------          --------
Total expenses                                         11,022            11,952
                                                    ---------          --------
Income (loss) before income taxes                        (101)              293
Provision for income taxes expense (benefit)              (42)              121
                                                    ---------          --------
Net income (loss)                               $         (59)         $    172
                                                    =========         =========

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

<PAGE>

                         SALTON SEA FUNDING CORPORATION

                            STATEMENTS OF CASH FLOWS

                             (Dollars in Thousands)

                                   (Unaudited)

                                                         Three Months Ended
                                                             March 31,
                                                        2000          1999

Cash flows from operating activities:

  Net income (loss)                                $      (59)       $     172
  Adjustments to reconcile net income (loss) to net
      cash flow from operating activities:
  Equity in (earnings) loss of guarantors                  42             (116)
  Changes in assets and liabilities:
      Prepaid expenses and other assets               (10,877)         (10,361)
      Accrued liabilities                              10,782           11,737
                                                   ----------        ---------
  Net cash flows from operating activities               (112)           1,432
                                                   ----------        ---------
Cash flows from financing activities:

  Increase in due to affiliates                         8,746           22,929
                                                   ----------        ---------
  Net cash flows from financing activities              8,746           22,929
                                                   ----------        ---------
Net change in cash                                      8,634           24,361
Cash at the beginning of period                         2,086           17,629
                                                   ----------        ---------
Cash at the end of period                          $   10,720         $ 41,990
                                                   ==========        =========
Supplemental disclosures:
  Interest paid                                    $      ---         $    ---
                                                   ==========        =========

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

<PAGE>

                         SALTON SEA FUNDING CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

                                 (in thousands)
                              ---------------------


1.  General:

In the opinion of management of the Salton Sea Funding Corporation (the "Funding
Corporation"),  the  accompanying  unaudited  financial  statements  contain all
adjustments  (consisting only of normal recurring accruals) necessary to present
fairly the financial position as of March 31, 2000 and the results of operations
for the three  months ended March 31, 2000 and 1999 and cash flows for the three
months ended March 31, 2000 and 1999.  The results of  operations  for the three
months  ended  March 31,  2000 and 1999 are not  necessarily  indicative  of the
results to be expected for the full year.

The  unaudited  financial  statements  should  be read in  conjunction  with the
financial statements included in the Funding Corporation's annual report on Form
10-K for the year ended December 31, 1999.

The  Funding  Corporation  was formed on June 20,  1995 for the sole  purpose of
acting as issuer of senior secured notes and bonds.

<PAGE>

INDEPENDENT ACCOUNTANTS' REPORT

Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

We have  reviewed  the  accompanying  combined  balance  sheet of the Salton Sea
Guarantors  as of  March  31,  2000,  and the  related  combined  statements  of
operations  and cash flows for the three month  period  ended March 31, 2000 and
1999.  These  financial  statements  are the  responsibility  of the  Salton Sea
Guarantors' management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to such combined financial  statements for them to be in conformity with
generally accepted accounting principles generally accepted in the United States
of America.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the  combined  balance  sheet of the  Salton  Sea  Guarantors  as of
December  31,  1999,  and  the  related   combined   statements  of  operations,
Guarantors'  equity,  and cash  flows for the year  then  ended  (not  presented
herein);  and in our report dated January 25, 2000, we expressed an  unqualified
opinion on those combined financial statements.  In our opinion, the information
set forth in the accompanying  combined balance sheet as of December 31, 1999 is
fairly stated,  in all material  respects,  in relation to the combined  balance
sheet from which it has been derived.

DELOITTE & TOUCHE LLP
Omaha, Nebraska
April 21, 2000

<PAGE>

                              SALTON SEA GUARANTORS

                             COMBINED BALANCE SHEETS

                             (Dollars in Thousands)

                                                   March 31,      December 31,
                                                      2000            1999
                                                  ----------       ---------
                                                  (unaudited)
ASSETS

Accounts receivable                               $    3,408       $  11,537
Prepaid expenses and other assets                     12,806          11,695
Total current assets                                  16,214          23,232

Restricted cash                                        7,907          10,001
Property, plant, contracts and equipment, net        556,112         552,903
Excess of cost over fair value of net assets
   acquired, net                                      46,552          46,878
                                                  ----------       ---------
                                                  $  626,785       $ 633,014
                                                   =========       =========

LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                                  $      198       $      33
Accrued liabilities                                   13,932           7,862
Current portion of long term debt                      9,737           9,737
Total current liabilities                             23,867          17,632

Due to affiliates                                     18,878          27,993
Senior secured project note                          284,217         284,217
                                                  ----------       ---------
    Total liabilities                                326,962         329,842

Total Guarantors' equity                             299,823         303,172
                                                  ----------       ---------
                                                  $  626,785       $ 633,014
                                                  ==========       =========

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

<PAGE>

                              SALTON SEA GUARANTORS

                        COMBINED STATEMENTS OF OPERATIONS

                             (Dollars in Thousands)

                                   (Unaudited)

                                              Three Months Ended
                                                    March 31
                                             ------------------------
                                               2000            1999
                                             --------       - -------
Revenues:

Sales of electricity                  $        8,893    $      18,272
Interest and other income                        127              792
                                          ---------     -        ----
     Total revenues                            9,020           19,064
                                          ----------             ----
Expenses:

Operating, general and

   administration                              5,758            7,308
Depreciation and amortization                  4,094            4,022
Interest expense                               5,840            6,076
Less capitalized interest                     (3,323)          (1,704)
                                          ----------             ----
     Total expenses                           12,369           15,702
                                          ----------             ----
Net income (loss)                     $       (3,349)   $       3,362
                                          ==========    =============

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

<PAGE>

                              SALTON SEA GUARANTORS

                        COMBINED STATEMENTS OF CASH FLOWS

                             (Dollars in Thousands)

                                   (Unaudited)

                                                       Three Months Ended
                                                             March 31,
                                                      --------------------
                                                      2000             1999

Cash flows from operating activities:

Net income (loss)                              $    (3,349)   $       3,362
Adjustments to reconcile net income (loss)
 to net cash flows from operating activities:
   Depreciation and amortization                     4,094            4,022
   Changes in assets and liabilities:
     Accounts receivable                             8,129            5,688
     Prepaid expenses and other assets              (1,111)           1,211
     Accounts payable and accrued
      liabilities                                    6,235            5,177
                                               ---------       ------------
Net cash flows from operating activities            13,998           19,460
                                               --------        ------------
Cash flows from investing activities:

Capital expenditures                                (6,977)          (9,792)
Decrease in restricted cash                          2,094            7,760
                                               --------        ------------
Net cash flows from investing activities            (4,883)          (2,032)

Cash flows from financing activities:

 Decrease in due to affiliates                      (9,115)         (17,428)
                                               --------        ------------
Net cash flows from financing activities            (9,115)         (17,428)
                                               -----------          -------
Net change in cash                                     ---              ---
Cash at beginning of period                            ---              ---
                                               -----------    -      ------
Cash at end of period                          $       ---    $         ---
                                               ===========    =============


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

<PAGE>

                              SALTON SEA GUARANTORS

                     NOTES TO COMBINED FINANCIAL STATEMENTS

                                 (in thousands)
                              --------------------


1.  General:

In the opinion of management of the Salton Sea  Guarantors  (the  "Guarantors"),
the  accompanying   unaudited  financial   statements  contain  all  adjustments
(consisting only of normal recurring  accruals)  necessary to present fairly the
financial  position as of March 31, 2000 and the results of  operations  for the
three  months  ended March 31, 2000 and 1999 and cash flows for the three months
ended March 31, 2000 and 1999.  The results of  operations  for the three months
ended March 31, 2000 and 1999 are not  necessarily  indicative of the results to
be expected for the full year.

The  unaudited  financial  statements  shall  be read in  conjunction  with  the
financial statements included in the Funding Corporation's annual report on Form
10-K for the year ended December 31, 1999.

The combined  financial  statements  include the accounts of the partnerships in
which the Guarantors have a 100% interest.

<PAGE>

INDEPENDENT ACCOUNTANTS' REPORT

Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

We have reviewed the  accompanying  combined  balance  sheet of the  Partnership
Guarantors  as of  March  31,  2000,  and the  related  combined  statements  of
operations  and cash flows for the three month  periods ended March 31, 2000 and
1999.  These  financial  statements are the  responsibility  of the  Partnership
Guarantors' management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to such combined financial  statements for them to be in conformity with
generally accepted accounting principles generally accepted in the United States
of America.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the  combined  balance  sheet of the  Partnership  Guarantors  as of
December  31,  1999,  and  the  related   combined   statements  of  operations,
Guarantors'  equity  and cash  flows  for the year  then  ended  (not  presented
herein);  and in our report dated January 25, 2000, we expressed an  unqualified
opinion on those combined financial statements.  In our opinion, the information
set forth in the accompanying  combined balance sheet as of December 31, 1999 is
fairly stated,  in all material  respects,  in relation to the combined  balance
sheet from which it has been derived.

DELOITTE & TOUCHE LLP
Omaha, Nebraska
April 21, 2000

<PAGE>

                             PARTNERSHIP GUARANTORS

                             COMBINED BALANCE SHEETS

                             (Dollars in Thousands)

                                                     March 31,     December 31,
                                                        2000             1999
                                                    (unaudited)
ASSETS

Accounts receivable                                $   8,959         $   16,295
Prepaid expenses and other assets                     23,522             18,959
Total current liabilities                             32,481             35,254

Restricted cash                                       26,470             60,454
Due from affiliates                                   66,487             75,274
Property, plant, contracts and equipment, net        589,226            531,427
Management fee                                        70,589             71,489
Excess of cost over fair value of net assets
  acquired, net                                      127,103            127,994
                                                   ---------          ---------
                                                   $ 912,356          $ 901,892
                                                   =========          =========


LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                                   $   3,422          $   3,925
Accrued liabilities                                   26,255             13,534
Current portion of long term debt                     10,562             10,562
Total current liabilities                             40,239             28,021

Senior secured project notes                         250,650            250,650
Deferred income taxes                                 98,328             98,907
                                                   ---------          ---------
Total liabilities                                    389,217            377,578

Guarantors' equity:
Common stock                                               3                  3
Additional paid-in capital                           387,663            387,663
Retained earnings                                    135,473            136,648
                                                   ---------          ---------
Total Guarantors' equity                             523,139            524,314
                                                   ---------          ---------
                                                   $ 912,356          $ 901,892
                                                   =========          =========



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

<PAGE>

                             PARTNERSHIP GUARANTORS

                        COMBINED STATEMENTS OF OPERATIONS

                             (Dollars in Thousands)

                                   (Unaudited)

                                                       Three Months Ended
                                                             March 31,
                                                      2000             1999
                                                   ---------         ---------
Revenues:

Sales of electricity                           $      10,389     $      22,030
Interest and other income                                476             2,319
                                               -------------          --------
Total revenues                                        10,865            24,349
                                               -------------     -------------
Expenses:

Operating, general and

   administration                                      7,790            11,207
Depreciation and amortization                          4,645             6,218
Interest expense                                       5,095             5,694
Less capitalized interest                             (4,911)           (2,433)
                                               -------------     -------------

Total expenses                                        12,619            20,686
                                               -------------     -------------

Income (loss) before income taxes                     (1,754)            3,663
Provision for income taxes expense (benefit)            (579)            1,117
                                               -------------     -------------

Net income (loss)                              $      (1,175)    $       2,546
                                               =============     =============


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

<PAGE>

                             PARTNERSHIP GUARANTORS

                        COMBINED STATEMENTS OF CASH FLOWS

                             (Dollars in Thousands)

                                   (Unaudited)

                                                   Three Months Ended
                                                         March 31,
                                                   2000               1999
                                                 ---------        ---------
Cash flows from operating activities:

Net income (loss)                            $    (1,175)    $       2,546
Adjustments to reconcile net income (loss)
to net cash flow from operating activities:
    Depreciation and amortization                  4,645             6,218
    Deferred income taxes                           (579)            1,117
Changes in assets and liabilities:
       Accounts receivable                         7,336            12,159
       Prepaid expenses and other assets          (4,563)              190
       Accounts payable and accrued
        liabilities                               12,218             5,611
                                             -----------     --------
Net cash flows from operating activities          17,882            27,841
                                             -----------     --------
Cash flows from investing activities:

Capital expenditures                             (60,850)          (17,568)
Decrease in restricted cash                       33,984            10,580
Management fee                                       197              (384)
                                             -----------     --------
Net cash flows from investing activities         (26,669)           (7,372)
                                             -----------     --------
Cash flows from financing activities:

Increase (decrease) in due from affiliates         8,787           (20,469)
                                             -----------     --------
Net cash flows from financing activities           8,787           (20,469)
                                             -----------     --------
Net change in cash                                   ---               ---
Cash at beginning of period                          ---               ---
                                             -----------     -------     -
Cash at end of period                        $       ---     $         ---
                                             ===========     =============

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

<PAGE>

                             PARTNERSHIP GUARANTORS

                     NOTES TO COMBINED FINANCIAL STATEMENTS

                                 (in thousands)
                              --------------------

1.  General:

In the opinion of management of the Partnership  Guarantors (the  "Guarantors"),
the accompanying unaudited combined financial statements contain all adjustments
(consisting only of normal recurring  accruals)  necessary to present fairly the
financial  position as of March 31, 2000 and the results of  operations  for the
three  months  ended March 31, 2000 and 1999 and cash flows for the three months
ended March 31, 2000 and 1999.  The results of  operations  for the three months
ended March 31, 2000 and 1999 are not  necessarily  indicative of the results to
be expected for the full year.

The  unaudited  financial  statements  shall  be read in  conjunction  with  the
financial statements included in the Funding Corporation's annual report on Form
10-K for the year ended December 31, 1999.

The  combined  financial  statements  include  the  proportionate  share  of the
accounts of the partnerships in which the Guarantors have an interest.

<PAGE>

INDEPENDENT ACCOUNTANTS' REPORT

Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

We have reviewed the accompanying balance sheet of the Salton Sea Royalty LLC as
of March 31, 2000,  and the related  statements of operations and cash flows for
the  three  month  periods  ended  March  31,  2000 and  1999.  These  financial
statements are the responsibility of the Salton Sea Royalty LLC's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to such financial statements for them to be in conformity with generally
accepted  accounting  principles  generally  accepted  in the  United  States of
America.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the balance  sheet of the Salton Sea Royalty LLC as of December  31,
1999, and the related  statements of operations,  equity, and cash flows for the
year then ended (not  presented  herein);  and in our report  dated  January 25,
2000, we expressed an unqualified opinion on those financial statements.  In our
opinion,  the  information  set forth in the  accompanying  balance  sheet as of
December 31, 1999 is fairly stated, in all material respects, in relation to the
balance sheet from which it has been derived.

As discussed in Note 1 to the financial  statements,  the Company converted to a
limited  liability  company during 1999 and as such the statements of operations
and cash  flows  for the three  months  ended  March  31,  2000 and 1999 are not
comparable due to the change in reporting entity which results in no tax expense
in fiscal 2000.

DELOITTE & TOUCHE LLP
Omaha, Nebraska
April 21, 2000

<PAGE>

                             SALTON SEA ROYALTY LLC

                                 BALANCE SHEETS
                (Dollars in Thousands, Except per Share Amounts)


                                                  March 31,        December 31,
                                                    2000               1999
                                                -----------         -----------
                                                 (unaudited)
ASSETS

Prepaid expenses and other assets             $          197     $          235
Total current assets                                     197                235

Royalty stream, net                                   16,512             16,776
Excess of cost over fair value of net assets
  acquired, net                                       32,053             32,280
Due from affiliates                                   22,969             21,825

                                              $       71,731     $       71,116
                                              ==============     ==============


LIABILITIES AND EQUITY
Liabilities:
Accrued liabilities                           $          327     $           82
Current portion of long term debt                      4,773              4,773
Total current liabilities                              5,100              4,855

Senior secured project note                            9,041              9,041
                                              --------------     --------------
    Total liabilities                                 14,141             13,896

Equity:
Common stock, par value $.01 per share; 100
  share authorized, issued and outstanding                 -                  -
Additional paid-in capital                             1,561              1,561
Retained earnings                                     56,029             55,659
                                              --------------     --------------
Total equity                                          57,590             57,220
                                              --------------     --------------
                                              $       71,731     $       71,116
                                              ==============     ==============

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

<PAGE>

                             SALTON SEA ROYALTY LLC

                            STATEMENTS OF OPERATIONS

                             (Dollars in Thousands)

                                   (Unaudited)

                                                    Three Months Ended
                                                         March 31,
                                                    2000            1999
                                                  -------          -------
Revenues:
Royalty income                               $       1,560     $      13,459

Expenses:
Operating, general and

     administrative expenses                           415             1,108
Amortization of royalty stream
   and goodwill                                        491             2,449
Interest expense                                       284               468
                                             -------------     -------------
Total expenses                                       1,190             4,025
                                             -------------     -------------

Income before income taxes                             370             9,434
Provision for income taxes                             ---             3,790
                                             -------------     -------------

Net income                                   $         370     $       5,644
                                             =============     =============

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

<PAGE>

                             SALTON SEA ROYALTY LLC

                            STATEMENTS OF CASH FLOWS

                             (Dollars in Thousands)

                                   (Unaudited)

                                                        Three Months Ended
                                                              March 31,
                                                       ---------------------
                                                       2000             1999
                                                    ---------         --------
Cash flows from operating activities:

Net income                                         $      370    $       5,644
Adjustments to reconcile net income to net
 cash flow from operating activities:
    Amortization of royalty stream and goodwill           491            2,449
    Changes in assets and liabilities:
    Prepaid expenses and other assets                      38               70
Accrued liabilities and deferred income taxes             245           (5,130)
Net cash flows from operating activities                1,144            3,033

Net cash flows from financing activities:

Increase in due from affiliates                        (1,144)          (3,033)
                                                   ----------    ------     --
Net cash flows from financing activities               (1,144)          (3,033)

Net change in cash                                        ---              ---
Cash at beginning of period                               ---              ---
                                                   ----------    -     -------
Cash at end of period                              $      ---    $         ---
                                                   ==========    =============

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

<PAGE>

                             SALTON SEA ROYALTY LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 (in thousands)
                              --------------------

1.  General:

In the opinion of management of the Salton Sea Royalty LLC (the "Company"),  the
accompanying unaudited financial statements contain all adjustments  (consisting
only of normal  recurring  accruals)  necessary to present  fairly the financial
position as of March 31, 2000 and the results of operations for the three months
ended  March 31, 2000 and 1999 and cash flows for the three  months  ended March
31, 2000 and 1999.  The results of  operations  for the three months ended March
31, 2000 and 1999 are not  necessarily  indicative of the results to be expected
for the full year.  The Company was  converted  to a limited  liability  company
during  1999 and as such the  statements  of  operations  and cash flows for the
three months ended March 31, 2000 and 1999 are not  comparable due to the change
in reporting entity which results in no tax expense in fiscal 2000. Income taxes
are now the  responsibility of the partners and the Company has no obligation to
provide funds to the partners for payment of any tax  liabilities.  Accordingly,
the Company has no tax obligations.

The  unaudited  financial  statements  shall  be read in  conjunction  with  the
financial statements included in the Funding Corporation's annual report on Form
10-K for the year ended December 31, 1999.

<PAGE>

                       THE SALTON SEA FUNDING CORPORATION

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       (in thousands, except per kwh data)
                        ---------------------------------

Results of Operations:

The following is  management's  discussion  and analysis of certain  significant
factors which have affected the Salton Sea Funding  Corporation's  (the "Funding
Corporation") and the Salton Sea Guarantors,  the Partnership Guarantors and the
Salton Sea Royalty LLC's  (collectively,  the "Guarantors")  financial condition
and  results of  operations  during the  periods  included  in the  accompanying
statements of operations.

Funding  Corporation  was  organized for the sole purpose of acting as issuer of
senior  secured notes and bonds (the  "Securities").  The Securities are payable
from the  proceeds  of payments  made of  principal  and  interest on the senior
secured  project  notes  by the  Guarantors  to  the  Funding  Corporation.  The
Securities  are guaranteed on a joint and several basis by the  Guarantors.  The
guarantees of the Partnership  Guarantors and Salton Sea Royalty LLC are limited
to available cash flow. The Funding  Corporation does not conduct any operations
apart from the Securities.

The  Vulcan,  Leathers,  Del Ranch and Elmore  partnerships  (collectively,  the
"Partnership  Projects") sell all electricity generated by the respective plants
pursuant to four  long-term  SO4  Agreements  between the  projects and Southern
California Edison Company ("Edison").  These SO4 Agreements provide for capacity
payments, capacity bonus payments and energy payments. Edison makes fixed annual
capacity  payments to the  projects  and, to the extent  that  capacity  factors
exceed  certain  benchmarks,  is required to make capacity bonus  payments.  The
price for capacity and capacity  bonus payments is fixed for the life of the SO4
Agreements and the capacity payments are  significantly  higher in the months of
June through September.

The scheduled  energy price periods of the  Partnership  Project SO4  Agreements
extended until February 1996 for the Vulcan  Partnership,  December 1998 for the
Hoch (Del Ranch) and Elmore  Partnerships,  and  December  1999 for the Leathers
Partnership.

For 2000, the Partnership Projects are receiving Edison's avoided cost of energy
pursuant to their respective SO4 Agreements.

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 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
5.4 cents per kWh during the three months  ended March 31,  2000.  As the Salton
Sea I PPA is not an SO4 Agreement, the energy payments do not revert to Edison's
avoided cost of energy.

<PAGE>

                       THE SALTON SEA FUNDING CORPORATION

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       (in thousands, except per kwh data)
                        ---------------------------------

Results of Operations:  (continued)

The  Salton  Sea II and  Salton  Sea III  Projects  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  expires
April 4, 2000 for Salton Sea II and expired on February  13, 1999 for Salton Sea
III, are levelized at a time period  weighted  average of 10.6 cents per kWh and
9.8  cents  per  kWh  for  Salton  Sea  II and  Salton  Sea  III,  respectively.
Thereafter,  the monthly  energy  payments  will be at Edison's  avoided cost of
energy. For Salton Sea II only, Edison is entitled to receive, at no cost, 5% of
all energy  delivered in excess of 80% of contract  capacity  through  March 31,
2004.

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 Power Purchase  Agreement  ("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 three  months  ended March 31, 2000,  Edison's  average  avoided cost of
energy was 3.2 cents per kWh.  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 such Agreements will
likely decline  significantly  after the expiration of the respective  scheduled
payment periods.

<PAGE>

                       THE SALTON SEA FUNDING CORPORATION

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       (in thousands, except per kwh data)
                        ---------------------------------

Results of Operations:  (continued)


The following data includes the aggregate capacity and electricity production of
Salton Sea Units I, II, III and IV:

                                              Three Months Ended
                                                  March 31,
                                            ----------------------
                                            2000              1999
                                          --------           -------
Overall capacity factor                      45.2%             83.8%
Capacity (NMW) (average)                     119.4             119.4
kWh produced (in thousands)                117,900           216,000

The overall capacity factor for the Salton Sea Projects  decreased for the three
months ended March 31, 2000 compared to the same period in 1999 primarily due to
scheduled overhauls in 2000 which were more extensive compared to 1999.

The following data includes the aggregate capacity and electricity production of
the Partnership Projects:

                                            Three Months Ended
                                                  March 31,
                                            ---------------------
                                           2000               1999
                                          --------         ---------
Overall capacity factor                      81.9%            106.8%
Capacity (NMW) (average)                       148               148
kWh produced (in thousands)                264,600           341,500

The overall capacity factor for the Partnership Projects decreased for the three
months ended March 31, 2000 compared to the same period in 1999 due to scheduled
overhauls at all plants in 2000 and none in 1999.

Revenues:

The Salton Sea  Guarantors'  sales of  electricity  decreased  to $8,893 for the
three  months  ended March 31, 2000 from  $18,272 for the same period in 1999, a
51.3% decrease.  This decrease was primarily due to scheduled  overhauls in 2000
which were more  extensive  compared  to 1999 and the Unit III  scheduled  price
period ended in February, 1999.

<PAGE>

                       THE SALTON SEA FUNDING CORPORATION

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       (in thousands, except per kwh data)
                        ---------------------------------

Results of Operations:  (continued)


The Partnership  Guarantors'  sales of electricity  decreased to $10,389 for the
three  months  ended March 31, 2000 from  $22,030 for the same period in 1999, a
52.8%  decrease.  This decrease was primarily due to the expiration of the fixed
price period at Leathers on December 31, 1999.

The Royalty  Guarantor  revenue  decreased  to $1,560 for the three months ended
March  31,  2000  from  $13,459  for the same  period  last  year.  This was due
primarily to a decrease in East Mesa payments related to a settlement  agreement
in 1998.

Operating Expenses:

The Salton Sea Guarantors' operating expenses, which include royalty, operating,
and general and  administrative  expenses,  decreased  to $5,758,  for the three
months  ended  March  31,  2000 from  $7,308  for the same  period in 1999.  The
decrease was due to a reduction in royalty expenses due to the lower revenues.

The  Partnership   Guarantors'   operating  expenses,   which  include  royalty,
operating, and general and administrative expenses,  decreased to $7,790 for the
three months ended March 31, 2000 from $11,207 for the same period in 1999.  The
decrease was due to a reduction in royalty expenses due to the lower revenues.

The  Royalty  Guarantors'  operating  expenses  decreased  to $415 for the three
months  ended March 31,  2000 from  $1,108 for the same period in 1999,  a 62.5%
decrease.  This  decrease was due to lower  royalty  costs due to the end of the
scheduled price period at Leathers.

Depreciation and Amortization:

The Salton Sea Guarantors' depreciation and amortization increased to $4,094 for
the three  months  ended March 31, 2000 from $4,022 for the same period of 1999,
an 1.8% increase.

The Partnership  Guarantors'  depreciation and amortization  decreased to $4,645
for the three  months  ended  March 31,  2000 from $6,218 for the same period in
1999. The decrease was due primarily to lower step up depreciation  amortization
after the end of the scheduled price period at Leathers.

The Royalty  Guarantors'  amortization was $491 for the three months ended March
31, 2000 compared to $2,449 for the same period of 1999. The decrease was due to
lower  amortization  after  the  end  of  the  scheduled  price  period  at  the
partnership plants.

<PAGE>

                       THE SALTON SEA FUNDING CORPORATION

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       (in thousands, except per kwh data)
                        ---------------------------------

Results of Operations:  (continued)

Interest Expense:

The  Salton  Sea  Guarantors'  interest  expense,  net of  capitalized  amounts,
decreased  to $2,517 for the three  months  ended March 31, 2000 from $4,372 for
the same  period in 1999,  a 42.4%  decrease.  The  decrease  was due to reduced
indebtedness and higher capitalized interest on Unit V construction.

The  Partnership  Guarantors'  interest  expense,  net of  capitalized  amounts,
decreased  to $184 for the three months ended March 31, 2000 from $3,261 for the
same period in 1999.  The  decrease was due to reduced  indebtedness  and higher
capitalized interest on zinc construction.

The Royalty Guarantors'  interest expense decreased to $284 for the three months
ended March 31, 2000 from $468 from the same period in 1999.  The  decrease  was
due to reduced indebtedness.

Income Tax Provision:

The Salton Sea  Guarantors are comprised of  partnerships.  Income taxes are the
responsibility  of the partners and Salton Sea Guarantors  have no obligation to
provide funds to the partners for payment of any tax  liabilities.  Accordingly,
the Salton Sea Guarantors have no tax obligations.

The Partnership Guarantors income tax provision decreased to a benefit of $(579)
for the three months ended March 31, 2000 from an expense of $1,117 for the same
period in 1999.  This  decrease was  primarily  due to a lower  pre-tax  income.
Income taxes will be paid by the parent of the Guarantors from  distributions to
the parent company by the Guarantors  which occur after  operating  expenses and
debt service.

The Royalty  Guarantor's  income tax provision was $0 for the three months ended
March 31, 2000  compared to $3,790 for the same period in 1999.  The decrease in
the provision is due to the change in the Royalty  Guarantor  from a corporation
to a  limited  liability  company  which  is not  taxed.  Income  taxes  are the
responsibility  of the  partners  and Royalty  Guarantor  has no  obligation  to
provide funds to the partners for payment of any tax  liabilities.  Accordingly,
the Royalty Guarantor has no tax obligations.

<PAGE>

                       THE SALTON SEA FUNDING CORPORATION

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       (in thousands, except per kwh data)
                        ---------------------------------

Results of Operations:  (continued)

Net Income:

The Salton Sea  Funding  Corporation's  net income  (loss) for the three  months
ended March 31, 2000 was $(59) compared to $172 for the same period in 1999. The
net income primarily  represents interest income and expense,  net of applicable
tax,  and the Salton Sea  Funding  Corporation's  1% equity in  earnings  of the
Guarantors.

The Salton Sea Guarantors' net income (loss) decreased to $(3,349) for the three
months ended March 31, 2000 compared to $3,362 for the same period of 1999.

The  Partnership  Guarantors'  net income  (loss)  decreased to $(1,175) for the
three  months  ended  March 31,  2000  compared to $2,546 for the same period of
1999.

The Royalty  Guarantors' net income decreased to $370 for the three months ended
March 31, 2000 compared to $5,644 for the same period of 1999.

Liquidity and Capital Resources:

Salton Sea Minerals LLC, a Partnership Guarantor ("Minerals LLC"), developed and
owns the  rights  to  proprietary  processes  for the  extraction  of zinc  from
elements in solution in the geothermal brine and fluids utilized at its Imperial
Valley plants (the "Zinc  Recovery  Project") as well as the production of power
to be used in the extraction  process.  A pilot plant has successfully  produced
commercial quality zinc at the Company's Imperial Valley Project.

Minerals LLC is constructing  the Zinc Recovery  Project which will recover zinc
from the geothermal brine (the "Zinc Recovery Project"). Four facilities will be
installed near Imperial Valley Project sites to extract a zinc chloride solution
from  the  brine  through  an  ion  exchange  process.  This  solution  will  be
transported  to a central  processing  plant  where zinc ingots will be produced
through  solvent  extraction,  electrowinning  and casting  processes.  The Zinc
Recovery Project is designed to have a capacity of  approximately  30,000 metric
tonnes per year and is scheduled to commence commercial operation in mid-2000.In
September  1999,  Minerals LLC entered into a sales  agreement  whereby all zinc
produced by the Zinc Recovery Project will be sold to Cominco,  Ltd. The initial
term of the agreement expires in December 2005.

The  Zinc  Recovery   Project  is  being   constructed  by  Kvaerner  U.S.  Inc.
("Kvaerner")  pursuant  to a date  certain,  fixed-price,  turnkey  engineering,
procurement  and   construction   contract  (the  "Zinc  Recovery   Project  EPC
Contract").  Total project costs of the Zinc Recovery Project are expected to be
approximately  $200,900. The Company has incurred $134,113 of such costs through
March 31, 2000.

<PAGE>

                       THE SALTON SEA FUNDING CORPORATION

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       (in thousands, except per kwh data)
                        ---------------------------------

Liquidity and Capital Resources: (continued)

Salton  Sea Power LLC, a Salton Sea  Guarantor,  is  constructing  Salton Sea V.
Salton Sea V is a 49 net MW geothermal power plant which will sell approximately
one-third of its net output to the Zinc Recovery Project.  The remainder will be
sold  through  the  California   Power  Exchange   ("PX")  or  in  other  market
transactions.

Salton Sea V is being  constructed  pursuant  to a date  certain,  fixed  price,
turn-key  engineering,  procurement and construction contract (the "Salton Sea V
EPC Contract") by Stone & Webster Engineering Corporation ("SWEC"). Salton Sea V
is scheduled to commence commercial  operation in mid-2000.  Total project costs
of Salton Sea V are expected to be approximately $119,100.

CE Turbo LLC, a Partnership Guarantor, is constructing the CE Turbo Project. The
CE Turbo  Project  will have a  capacity  of 10 net MW. The net output of the CE
Turbo Project will be sold to the Zinc  Recovery  Project or sold through the PX
or in other market transactions.

The  Partnership   Projects  have  upgraded  the  geothermal   brine  processing
facilities  at the  Vulcan  and Del  Ranch  Projects  with  the  Region  2 Brine
Facilities  Construction.  In  addition  to  incorporating  the pH  modification
process,  which has reduced operating costs at the Salton Sea Projects, the new,
more  efficient   facilities  will  achieve  economies  through  improved  brine
processing systems and the utilization of more modern equipment. The Partnership
Projects expect these improvements will reduce brine-handling operating costs at
the Vulcan Project and the Del Ranch Project.

The CE Turbo Project is being and the Region 2 Brine Facilities Construction has
been  constructed  by SWEC  pursuant to a date  certain,  fixed  price,  turnkey
engineering,  procurement and  construction  contract (the "Region 2 Upgrade EPC
Contract").  The CE Turbo Project is scheduled to commence initial operations in
mid-2000 and the Region 2 Brine Facilities  Construction is in operation.  Total
project  costs for both the CE Turbo  Project and the Region 2 Brine  Facilities
Construction are expected to be approximately $63,700.

Total  equity  funding  for  these  projects  is  expected  to be  approximately
$122,500.

The  EPC  contractor's  parent,  Stone &  Webster,  Incorporated,  has  recently
announced  that it is having  current  liquidity  problems  and  intends to sell
substantially  all of its assets to Jacobs  Engineering  Group, Inc. in exchange
for an immediate $50 million secured  revolving credit  facility,  assumption of
substantially  all of Stone &  Webster's  balance  sheet  liabilities,  and $150
million in cash and stock,  and  subsequently  intends to seek bankruptcy  court
approval of the asset sale and credit agreement. As the work on the construction
projects are expected to be completed this summer,  the Company does not believe
there  will be any  material  adverse  effect on the final  completion  of those
projects or the Company.

<PAGE>

                       THE SALTON SEA FUNDING CORPORATION

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       (in thousands, except per kwh data)
                        ---------------------------------

Liquidity and Capital Resources: (continued)

The operating Salton Sea Guarantors' only source of revenue is payments received
pursuant to long term power sales  agreements  with Edison,  other than interest
earned on funds on deposit. The operating Partnership Guarantors' primary source
of revenue is payments  received  pursuant  to long term power sales  agreements
with  Edison.  The  Royalty  Guarantor's  only  source of revenue  is  Royalties
received  pursuant to resource lease  agreements with the Partnership  Projects.
These  payments,  for each of the  Guarantors,  are expected to be sufficient to
fund operating and maintenance  expenses,  payments of interest and principal on
the Securities,  projected  capital  expenditures  and debt service reserve fund
requirements.

Inflation has not had a significant impact on the Guarantors'  operating revenue
and costs.

Certain information included in this report contains forward-looking  statements
made pursuant to the Private  Securities  Litigation Reform Act of 1995 ("Reform
Act"). Such statements are based on current expectations and involve a number of
known and unknown risks and  uncertainties  that could cause the actual  results
and  performance of the Company to differ  materially  from any expected  future
results or performance, expressed or implied, by the forward-looking statements.
In connection with the safe harbor provisions of the Reform Act, the Company has
identified   important  factors  that  could  cause  actual  results  to  differ
materially  from  such  expectations,  including  development  and  construction
uncertainty,  operating  uncertainty,  acquisition  uncertainty,   uncertainties
relating to doing business outside of the United States,  uncertainties relating
to geothermal  resources,  uncertainties  relating to domestic and international
economic and  political  conditions  and  uncertainties  regarding the impact of
regulations,   changes  in  government   policy,   industry   deregulation   and
competition. Reference is made to all of the Company's SEC filings, incorporated
herein by reference,  for a description of such factors.  The Company assumes no
responsibility to update forward-looking information contained herein.

<PAGE>

                         SALTON SEA FUNDING CORPORATION

                           PART II - OTHER INFORMATION

Item 1 - Legal proceedings.

     Neither the Salton Sea Funding  Corporation  nor the Guarantors are parties
to any material legal matters.

Item 2 - Changes in Securities.

         Not applicable.

Item 3 - Default on Senior Securities.

         Not applicable.

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

         Not applicable.

Item 5 - Other Information.

         Not applicable.

Item 6 - Exhibits and Reports on Form 8-K.

         (a)  Exhibits:

                  Exhibit 27 - Financial Data Schedule

         (b)  Report on Form 8-K:

                 Not applicable.
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934 the  registrant  has duly  caused  this  report  to be signed on its
behalf by the undersigned thereunto duly authorized, in the City of Omaha, State
of Nebraska, on this 12th day of May, 2000.

                                            SALTON SEA FUNDING CORPORATION


Date:  May 12, 2000                       /s/    Joseph M. Lillo*
                                          By:    Joseph M. Lillo
                                                 Vice President and Controller

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

<PAGE>

                                  EXHIBIT INDEX

Exhibit                                                            Page
  No.                                                               No.

  27             Financial Data Schedule                            35