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 September 30, 1998
          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 Company           Delaware     33-0453364
Vulcan Power Company              Nevada       95-3992087
CalEnergy Operating Company       Delaware     33-0268085
Salton Sea Royalty Company        Delaware     47-0790492
BN Geothermal Inc.                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
(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 September 30, 1998.
<PAGE>
                 SALTON SEA FUNDING CORPORATION

                           Form 10-Q

                       September 30, 1998
                         _____________

                        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, September 30, 1998
 and December 31, 1997                                                      5

Statements of Operations for the Three and
 Nine Months Ended September 30, 1998 and 1997                              6

Statements of Cash Flows for the
 Nine Months Ended September 30, 1998 and 1997                              7

Notes to Financial Statements                                               8

SALTON SEA GUARANTORS

Independent Accountants' Report                                             9

Combined Balance Sheets, September 30, 1998
 and December 31, 1997                                                      10

Combined Statements of Operations for the Three
 and Nine Months Ended September 30, 1998 and 1997                          11

Combined Statements of Cash Flows for the
 Nine Months Ended September 30, 1998 and 1997                              12

Notes to Combined Financial Statements                                      13
<PAGE>
PARTNERSHIP GUARANTORS

Independent Accountants' Report                                             14

Combined Balance Sheets, September 30, 1998
 and December 31, 1997                                                      15

Combined Statements of Operations for the Three
 and Nine Months Ended September 30, 1998 and 1997                          16

Combined Statements of Cash Flows for the
 Nine Months Ended September 30, 1998 and 1997                              17

Notes to Combined Financial Statements                                      18

SALTON SEA ROYALTY COMPANY

Independent Accountants' Report                                             19

Balance Sheets, September 30, 1998
 and December 31, 1997                                                      20

Statements of Operations for the Three and
 Nine Months Ended September 30, 1998 and 1997                              21

Statements of Cash Flows for the
 Nine Months Ended September 30, 1998 and 1997                              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                                                  35
Item 2.  Changes in Securities                                              35
Item 3.  Defaults on Senior Securities                                      35
Item 4.  Submission of Matters to a Vote of
         Security Holders                                                   35
Item 5.  Other Information                                                  35
Item 6.  Exhibits and Reports on Form 8-K                                   35

Signatures                                                                  36

Exhibit Index                                                               37


<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 September 30, 1998,  and  the  related
statements  of  operations for the three and nine  month  periods
ended  September 30, 1998 and 1997 and cash flows  for  the  nine
month periods ended September 30, 1998 and 1997.  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.

We have previously audited, in accordance with generally accepted
auditing  standards,  the balance sheet  of  Salton  Sea  Funding
Corporation  as of December 31, 1997, 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
February  12, 1998, 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,  1997  is
fairly  stated,  in  all material respects, in  relation  to  the
balance sheet from which it has been derived.


DELOITTE & TOUCHE LLP
Omaha, Nebraska
November 12, 1998
<PAGE>
                SALTON SEA FUNDING CORPORATION

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



                                    September 30,   December 31,
                                         1998           1997
                                     ___________      __________
                                     (unaudited)
ASSETS
Cash                                   $  64,502      $  15,568
Prepaid expenses and other assets         10,232          2,823
Secured project notes from Guarantors    395,285        448,754
Investment in 1% of net assets of
  Guarantors                               7,924          7,144
                                      __________     __________
                                       $ 477,943      $ 474,289
                                      ==========     ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Accrued liabilities                    $   9,964      $   2,782
Due to affiliates                         61,365         12,598
Senior secured notes and bonds           395,285        448,754
                                      __________     __________
  Total liabilities                      466,614        464,134

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                          5,963          4,789
                                      __________     __________
  Total stockholder's equity              11,329         10,155
                                      __________     __________
                                       $ 477,943      $ 474,289
                                      ==========     ==========

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  Nine Months Ended
                             September 30        September 30
                          1998        1997      1998     1997
Revenues:

Interest income           $ 8,663  $  9,567  $ 26,372 $  30,314
Equity in earnings 
 of Guarantors                383       340       780       681
                        _________  ________  ________  ________
Total revenues              9,046     9,907    27,152    30,995
                        _________  ________  ________  ________

Expenses:

General and administrative 
 expenses                     336       233       809       692
Interest expense            8,074     9,047    24,353    28,538
                        _________  ________  ________  ________
Total expenses              8,410     9,280    25,162    29,230
                        _________  ________  ________  ________
Income before income taxes    636       627     1,990     1,765
Provision for income taxes    261       257       816       724
                        _________  ________  ________  ________
Net income               $    375 $     370  $  1,174  $  1,041
                        ========= =========  ======== =========

The accompanying notes are an integral part of these financial  statements.
<PAGE>
                SALTON SEA FUNDING CORPORATION
                   STATEMENTS OF CASH FLOWS
                     (Dollars in Thousands)
                          (Unaudited)

                                            Nine Months Ended
                                              September 30,
                                               1998      1997

Cash flows from operating activities:
  Net income                              $   1,174  $  1,041
  Adjustments to reconcile net income to net
     cash flow from operating activities:
  Equity in earnings of guarantors             (780)     (681)
  Changes in assets and liabilities:
     Prepaid expenses and other assets       (7,409)   (8,938)
     Accrued liabilities                      7,182     8,729
                                          __________ _________  
Net cash flows from operating activities        167       151
                                          __________ _________
Cash flows from investing activities:
  Decrease in restricted cash                    ---   14,044
  Principal repayments of secured project notes
  from Guarantors                             53,469    45,114
                                          __________ _________
  Net cash flows from investing activities    53,469   59,158
                                          __________ _________
Cash flows from financing activities:
  Increase in due to affiliates               48,767   36,176
  Repayment of senior secured notes and bonds(53,469) (45,114)
                                          __________ _________
  Net cash flows from financing activities   (4,702)   (8,938)
                                          __________ _________
Net change in cash                            48,934   50,371
Cash at the beginning of period               15,568   13,218
                                          __________ _________
Cash at the end of period                 $   64,502 $ 63,589
                                          ========== =========
Supplemental disclosures:
  Interest paid                          $    16,570 $ 19,777
                                          ========== =========

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 September  30,  1998
and the results of operations for the three and nine months ended
September  30, 1998 and 1997 and cash flows for the  nine  months
ended September 30, 1998 and 1997.  The results of operations for
the  three and nine months ended September 30, 1998 and 1997  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, 1997.

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

2. Accounting Pronouncement:

In  April  1998,  the  Accounting Standards  Executive  Committee
("AcSEC")   issued  Statement  of  Position  ("SOP")  No.   98-5,
"Reporting  on the Costs of Start-Up Activities", which  requires
that  costs  of  start-up activities and  organization  costs  be
expensed  as  incurred.   The  SOP  is  effective  for  financial
statements  for fiscal years beginning after December  15,  1998.
The Funding Corporation has not yet determined the impact of this
accounting  pronouncement, however, any impact  will  not  affect
cash flows.

3. Subsequent Event:

On  October 13, 1998 the Funding Corporation completed a sale  to
institutional  investors of $285,000 aggregate amount  of  7.475%
Senior  Secured  Series  F  Bonds due  November  30,  2018.   The
proceeds  from  the  offering will  be  used  to  partially  fund
construction  of two new geothermal projects at the  Salton  Sea,
the  costs of construction of the Zinc Recovery Project and other
capital improvements at existing Salton Sea projects.



<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 September 30, 1998, and the  related
combined  statements of operations for the three and  nine  month
periods ended September 30, 1998 and 1997 and cash flows for  the
nine  month  periods ended September 30, 1998  and  1997.   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.

We have previously audited, in accordance with generally accepted
auditing standards, the combined balance sheet of the Salton  Sea
Guarantors  as  of  December 31, 1997, 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  February 12, 1998, 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,  1997  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
November 12, 1998
<PAGE>
                     SALTON SEA GUARANTORS

                    COMBINED BALANCE SHEETS
                     (Dollars in Thousands)

                                    September 30,   December 31,
                                         1998          1997
                                      __________      _________
                                     (unaudited)
ASSETS
Accounts receivable                    $  22,756     $  15,823
Prepaid expenses and other assets         11,701        13,043
Property, plant, contracts and 
 equipment, net                          473,037       478,001
Excess of cost over fair value of 
 net assets acquired, net                 48,508        49,486
                                       _________      _________
                                       $ 556,002     $ 556,353
                                        ========       ========


LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                    $     1,610     $     390
Accrued liabilities                      12,019         7,826
Due to affiliates                        24,537        47,741
Senior secured project note             246,483       266,208
                                       _________      _________
  Total liabilities                     284,649       322,165

Total Guarantors' equity                271,353       234,188
                                       _________      _________
                                      $ 556,002     $ 556,353
                                       =========      =========

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  Nine Months Ended
                             September 30       September 30
                        _____________________   _____________________
                           1998      1997      1998      1997
                         ________  ________  ________  ________
Revenues:

Sales of electricity     $ 34,359  $ 33,884  $ 82,156 $ 82,307
Interest and other income       8         7        30      168
                          _______   _______   _______   _______
  Total revenues           34,367    33,891    82,186   82,475
                          _______   _______   _______   _______
Expenses:

Operating, general and
   administration           7,963     8,218    22,510   21,328
Depreciation and 
 amortization               3,724     4,149    11,164   12,333
Interest expense            5,013     5,701    15,472   17,398
Less capitalized interest  (1,513)   (1,173)   (4,125)  (3,617)
                          _______   _______   _______   _______
  Total expenses           15,187    16,895    45,021   47,442
                          _______   _______   _______   _______
Net income               $ 19,180  $ 16,996  $ 37,165 $ 35,033
                          =======   =======   =======   =======

The accompanying notes are an integral part of these financial  statements.
<PAGE>
                     SALTON SEA GUARANTORS

               COMBINED STATEMENTS OF CASH FLOWS
                     (Dollars in Thousands)
                          (Unaudited)
                                            Nine Months Ended
                                               September 30,
                                           ____________________
                                                1998    1997 
                                            _________ _________
Cash flows from operating activities:
Net income                                  $  37,165 $ 35,033
Adjustments to reconcile net income to net
  cash flows from operating activities:
   Depreciation and amortization               11,164   12,333
   Changes in assets and liabilities:
    Accounts receivable                        (6,933)  (6,809)
    Prepaid expenses and other assets           1,342    1,317
    Accounts payable and accrued
     liabilities                                5,413    3,188
                                            _________ _________
Net cash flows from operating activities       48,151   45,062
                                            _________ _________
Cash flows from investing activities:
Capital expenditures                          (5,222)   (5,784)
                                            _________ _________
Cash flows from financing activities:
 Decrease in due to affiliates               (23,204)  (22,462)
 Repayments of senior secured project note   (19,725)  (16,816)
                                            ___________________
Net cash flows from financing activities     (42,929)  (39,278)
                                            _________ _________
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 September 30, 1998 and the results of operations for the three
and  nine months ended September 30, 1998 and 1997 and cash flows
for  the  nine  months ended September 30, 1998  and  1997.   The
results  of  operations  for  the three  and  nine  months  ended
September 30, 1998 and 1997 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 Salton Sea Funding
Corporation's  annual  report on Form 10-K  for  the  year  ended
December 31, 1997.

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

2. Accounting Pronouncement:

In  April  1998,  the  Accounting Standards  Executive  Committee
("AcSEC")   issued  Statement  of  Position  ("SOP")  No.   98-5,
"Reporting  on the Costs of Start-Up Activities", which  requires
that  costs  of  start-up activities and  organization  costs  be
expensed  as  incurred.   The  SOP  is  effective  for  financial
statements  for fiscal years beginning after December  15,  1998.
The  Guarantors  have  not  yet determined  the  impact  of  this
accounting  pronouncement, however, any impact  will  not  affect
cash flows.


<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 September 30, 1998, and the  related
combined  statements of operations for the three and  nine  month
periods ended September 30, 1998 and 1997 and cash flows for  the
nine  month  periods ended September 30, 1998  and  1997.   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.

We have previously audited, in accordance with generally accepted
auditing standards, the combined balance sheet of the Partnership
Guarantors  as  of  December 31, 1997, 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  February 12, 1998, 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,  1997  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
November 12, 1998
<PAGE>
                     PARTNERSHIP GUARANTORS

                    COMBINED BALANCE SHEETS
                     (Dollars in Thousands)

                                    September 30,     December 31,
                                         1998            1997
                                     (unaudited)
ASSETS
Accounts receivable                    $  42,432      $  23,481
Prepaid expenses and other assets         17,858         13,121
Due from affiliates                      122,464        124,311
Property, plant, contracts 
 and equipment, net                      371,143        370,666
Management fee from affiliates            71,364         70,082
Excess of cost over fair value of 
 net assets acquired, net                132,449        135,122
                                       _________      _________
                                       $ 757,710      $ 736,783
                                       =========      =========


LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                       $   2,606      $   1,338
Accrued liabilities                       24,396         23,285
Senior secured project notes             117,729        143,610
Deferred income taxes                    124,131        106,851
                                       _________      _________
Total liabilities                        268,862        275,084

Guarantors' equity:
Common stock                                   3              3
Additional paid-in capital               387,663        387,663
Retained earnings                        101,182         74,033
                                       _________      _________
Total Guarantors' equity                 488,848        461,699
                                       _________      _________
                                       $ 757,710      $ 736,783
                                       =========      =========

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   Nine Months Ended
                           September 30         September 30
                          1998        1997    1998       1997
                        _________ _________ _________ _________
Revenues:

Sales of electricity     $ 51,060  $ 49,547$  124,731 $ 122,458
Interest and other income   1,743     1,896     3,775     3,463
                        _________ _________ _________ _________
Total  revenues            52,803    51,443   128,506   125,921
                        _________ _________ _________ _________
Expenses:

Operating, general and
   administration          16,937    16,471    46,721    48,119
Depreciation and 
 amortization              12,146     9,657    36,312    28,987
Interest expense            2,435     3,332     8,188    10,531
Less capitalized interest  (2,257)   (2,360)   (7,144)   (6,908)
                        _________ _________ _________ _________

Total expenses             29,261    27,100    84,077    80,729
                        _________ _________ _________ _________

Income before income taxes 23,542    24,343    44,429    45,192
Provision for income taxes  9,122     9,424    17,280    17,533
                        _________ _________ _________ _________

Net income              $  14,420 $  14,919  $ 27,149  $ 27,659
                        ========= ========= ========= =========

The accompanying notes are an integral part of these financial  statements.
<PAGE>
                    PARTNERSHIP GUARANTORS
               COMBINED STATEMENTS OF CASH FLOWS
                     (Dollars in Thousands)
                          (Unaudited)
                                             Nine Months Ended
                                                September 30,
                                               1998       1997
                                            _________ _________
Cash flows from operating activities:
Net income                                  $  27,149 $  27,659
Adjustments to reconcile net income to net
  cash flow from operating activities:
   Depreciation and amortization               36,312    28,987
   Deferred income taxes                       17,280    17,533
   Changes in assets and liabilities:
      Accounts receivable                     (18,951)  (10,127)
     Prepaid expenses and other assets         (4,737)    2,824
     Accounts payable and accrued
      liabilities                               2,378     2,543
                                            _________ _________
Net cash flows from operating activities       59,431    69,419
                                            _________ _________
Cash flows from investing activities:
Capital expenditures                          (32,156)  (25,556)
Management fee                                 (3,242)   (3,348)
                                            _________ _________
Net cash flows from investing activities      (35,398)  (28,904)
                                            _________ _________
Cash flows from financing activities:
Repayments of senior secured project notes    (25,881)  (19,297)
Decrease (increase) in due from affiliates      1,848   (21,218)
                                            _________ _________
Net cash flows from financing activities      (24,033)  (40,515)
                                            _________ _________
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 September 30, 1998 and the results of  operations
for  the three and nine months ended September 30, 1998 and  1997
and  cash flows for the nine months ended September 30, 1998  and
1997.   The  results of operations for the three and nine  months
ended  September 30, 1998 and 1997 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 Salton Sea Funding
Corporation's  annual  report on Form 10-K  for  the  year  ended
December 31, 1997.

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

2. Contingencies:

On  February 26, 1998, Del Ranch and Elmore initiated  an  action
against Edison in Imperial County Superior Court for payment  for
energy  delivered  to  Edison pursuant to long  term  power  sale
agreements at the escalated rate of 14.6 cents for 1998.  For the
Elmore  and  Del  Ranch partnerships, Edison  has  asserted  that
prices  should not be escalated for 1998 and is currently  making
payments  for  energy  deliveries at 13.6 cents  per  kWh.   That
action  is  in the early discovery stages and the Del  Ranch  and
Elmore  partnerships intend to vigorously prosecute all available
claims.

<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  Company  as  of  September 30,  1998,  and  the  related
statements  of  operations for the three and nine  month  periods
ended  September 30, 1998 and 1997 and cash flows  for  the  nine
month periods ended September 30, 1998 and 1997.  These financial
statements  are  the  responsibility of the  Salton  Sea  Royalty
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.

We have previously audited, in accordance with generally accepted
auditing  standards, the balance sheet of the Salton Sea  Royalty
Company  as  of December 31, 1997, and the related statements  of
operations, equity, and cash flows for the year then  ended  (not
presented herein); and in our report dated February 12, 1998,  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, 1997 is fairly stated,  in  all
material respects, in relation to the balance sheet from which it
has been derived.



DELOITTE & TOUCHE LLP
Omaha, Nebraska
November 12, 1998
<PAGE>
                   SALTON SEA ROYALTY COMPANY

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



                                    September 30,  December 31,
                                          1998         1997
                                     ___________   ___________
                                      (unaudited)
ASSETS
Due from affiliates                     $  49,872    $  19,114
Royalty stream, net                        25,153       31,818
Excess of cost over fair value of net assets
  acquired, net                            33,415       34,096
Prepaid expenses and other assets             630          981
                                       __________    __________
                                       $  109,070    $  86,009
                                       ==========    ==========


LIABILITIES AND EQUITY
Liabilities:
Accrued liabilities                     $  41,199    $  21,306
Senior secured project note                31,071       38,934
Deferred income taxes                       4,635        7,268
                                       __________    __________
  Total liabilities                        76,905       67,508

Equity:
Common stock, par value $.01 per share; 100
  share authorized, issued and outstanding      -            -
Additional paid-in capital                  1,561        1,561
Retained earnings                          30,604       16,940
                                       __________    __________
Total equity                               32,165       18,501
                                       __________    __________
                                       $  109,070    $  86,009
                                       ==========    ==========

The accompanying notes are an integral part of these financial  statements.
<PAGE>
                   SALTON SEA ROYALTY COMPANY

                   STATEMENTS OF OPERATIONS
                     (Dollars in Thousands)
                          (Unaudited)



                         Three Months Ended   Nine Months Ended
                           September 30          September 30
                       _____________________ ____________________
                           1998       1997     1998       1997
                          _______   _______  ________  ________
Revenues:
Royalty income          $  12,846   $ 8,628 $  37,526  $ 24,411

Expenses:
Operating, general and
  administrative expenses   2,204     2,096     6,095     5,928
Amortization of royalty stream
   and goodwill             2,449     2,449     7,346     7,346
Interest expense              657     1,002     2,172     3,228
                        _______________________________________
Total expenses              5,310     5,547    15,613    16,502
                        _______________________________________

Income before income taxes  7,536     3,081    21,913     7,909
Provision for income taxes  2,833       981     8,249     2,466
                        _______________________________________

Net income                $ 4,703   $ 2,100  $ 13,664   $ 5,443
                        =======================================

The accompanying notes are an integral part of these financial  statements.
<PAGE>
                   SALTON SEA ROYALTY COMPANY

                   STATEMENTS OF CASH FLOWS
                    (Dollars in Thousands)
                          (Unaudited)


                                             Nine Months Ended
                                               September 30,
                                           _____________________
                                               1998      1997
                                            _________  ________
Cash flows from operating activities:
Net income                                  $  13,664  $  5,443
Adjustments to reconcile net income to net
  cash flow from operating activities:
   Amortization of royalty stream and goodwill  7,346     7,346
   Deferred income taxes                       (2,633)   (1,755)
   Changes in assets and liabilities:
   Prepaid expenses and other assets              351       531
   Accrued liabilities                         19,893     4,582
Net cash flows from operating activities       38,621    16,147

Net cash flows from financing activities:
Increase in due from affiliates               (30,758)   (7,146)
Repayment of senior secured project note       (7,863)   (9,001)
                                            _________ _________
Net cash flows from financing activities      (38,621)  (16,147)

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 COMPANY

                 NOTES TO FINANCIAL STATEMENTS
                         (in thousands)
                      ____________________

1. General:

In  the  opinion of management of the Salton Sea Royalty  Company
(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 September 30, 1998 and the results of operations for the three
and  nine months ended September 30, 1998 and 1997 and cash flows
for  the  nine  months ended September 30, 1998  and  1997.   The
results  of  operations  for  the three  and  nine  months  ended
September 30, 1998 and 1997 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 Salton Sea Funding
Corporation's  annual  report on Form 10-K  for  the  year  ended
December 31, 1997.

<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
Company'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
Company   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.   Energy  is  sold  at
increasing scheduled rates for the first ten years of each plants
operations 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 Hoch (Del  Ranch),  Elmore  and
Leathers Partnerships, respectively.

Excluding  Vulcan, which is receiving Edison's  Avoided  Cost  of
Energy,  the  Companys SO4 Agreements provide  for  energy  rates
ranging from 14.6 cents per kWh in 1997 to 15.6 cents per kWh  in
1999.  Edison has been paying Del Ranch and Elmore for energy  at
a rate of 13.6 cents per kWh for 1998 and those partnerships have
filed  a  complaint against Edison seeking payment at 14.6  cents
per kWh.
<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 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 nine months  ended
September  30,  1998.  As the Salton Sea I  PPA  is  not  an  SO4
Agreement, the energy payments do not revert to Edison's  Avoided
Cost of Energy.

The Salton Sea II 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 2000 for Salton Sea II and February 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
September 30, 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  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  nine months ended September 30, 1998, Edison's  average
Avoided   Cost  of  Energy  was  3.0  cents  per  kWh  which   is
substantially  below the contract energy prices  earned  for  the
nine  months  ended  September 30, 1998.  Estimates  of  Edison's
future  Avoided Cost of Energy vary substantially  from  year  to
year.
<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  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 could decline significantly after the expiration
of the respective scheduled payment periods.

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

                          Three Months Ended   Nine Months Ended
                            September 30,         September 30,
                          ______________________________________
                            1998       1997      1998     1997
                          ________  _________ __________________
Overall capacity factor      98.7%      95.7%     93.1%    94.6%
Capacity (NMW) (average)     119.4      119.4     119.4   119.4
kWh produced (in thousands)260,200    252,300   728,100 740,200

The overall capacity factor for the Salton Sea Projects increased
for  the  three months ended September 30, 1998 compared  to  the
same  period in 1997 due to operating efficiencies resulting from
equipment  upgrades.  The overall capacity factor for the  Salton
Sea  Projects  decreased for the nine months ended September  30,
1998  compared to the same period in 1997 due to longer  downtime
during the 1998 overhauls.

The   following   data  includes  the  aggregate   capacity   and
electricity production of Vulcan, Del Ranch, Elmore and Leathers:

                         Three Months Ended   Nine Months Ended
                           September 30,         September 30,
                        _________________________________________
                            1998       1997      1998     1997
                          ________  _________ __________________
Overall capacity factor     105.5%     105.6%     99.2%   101.9%
Capacity NMW (average)         148        148       148      148
kWh produced (in thousands)344,900    345,000   961,500  987,700
<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)

Revenues:

The Salton Sea Funding Corporation's revenues decreased to $8,663
for the three months ended September 30, 1998 from $9,567 for the
same  period in 1997, a 9.4% decrease.  For the nine months ended
September 30, 1998, revenues decreased to $26,372 from $30,314 in
1997,  a  13.0%  decrease.   These decreases  are  due  to  lower
interest  income due to lower cash balances which  resulted  from
additional   capital  expenditures  from  the  Salton   Sea   and
Partnership Projects and debt repayment.

The  Salton  Sea  Guarantors' sales of electricity  increased  to
$34,359  for  the  three  months ended September  30,  1998  from
$33,884  for  the  same  period of 1997,  a  1.4%  increase.  The
increase was primarily due to increased electric production.  For
the  nine  month  period  ended  September  30,  1998,  sales  of
electricity  decreased to $82,156 from $82,307 in  1997,  a  0.2%
decrease.

The  Partnership  Guarantors' sales of electricity  increased  to
$51,060  for  the  three  months ended September  30,  1998  from
$49,547  for the same period in 1997, a 3.1% increase.   For  the
nine  month period ended September 30, 1998, sales of electricity
increased  to  $124,731 from $122,458 in 1997, a  1.9%  increase.
These  increases were primarily due to a scheduled price increase
at  Leathers,  Elmore and Del Ranch offset partially  by  turbine
overhauls at Elmore and Leathers.

The  Royalty Guarantor revenue increased to $12,846 for the three
months  ended September 30, 1998 from $8,628 for the same  period
last  year,  a  48.9% increase. For the nine month  period  ended
September 30, 1998, revenue increased to $37,526 from $24,411  in
1997, a 53.7% increase.  These increases were due primarily to an
increase  in  East  Mesa  royalty income  related  to  a  royalty
settlement agreement.

Operating Expenses:

The  Salton  Sea  Guarantors' operating expenses,  which  include
royalty,  operating,  and  general and  administrative  expenses,
decreased  to  $7,963, for the three months ended  September  30,
1998  from  $8,218 for the same period in 1997, a 3.1%  decrease.
For  the  nine  month period ended September 30, 1998,  operating
expenses increased to $22,510 from $21,328 in 1997.
<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' operating expenses,  which  include
royalty,  operating,  and  general and  administrative  expenses,
increased  to  $16,937 for the three months ended  September  30,
1998 from $16,471 for the same period in 1997. For the nine month
period ended September 30, 1998, operating expenses decreased  to
$46,721  from $48,119 in 1997, a 2.9% decrease.  The decrease  in
the  nine  months  was  due  to  a  reduction  in  operating  and
maintenance costs.

The  Royalty Guarantors' operating expenses increased  to  $2,204
for the three months ended September 30, 1998 from $2,096 for the
same  period in 1997, a 5.2% increase.  For the nine month period
ended  September 30, 1998, operating expenses increased to $6,095
from  $5,928 in 1997, a 2.8% increase.  These increases were  due
to  a  scheduled increase in third party lessor royalties related
to   the   increase  in  the  Partnership  Projects'   sales   of
electricity.

Depreciation and Amortization:

The   Salton   Sea  Guarantors'  depreciation  and   amortization
decreased to $3,724 for the three months ended September 30, 1998
from  $4,149 for the same period of 1997, a 10.2% decrease.   For
the  nine month period ended September 30, 1998, depreciation and
amortization decreased to $11,164 from $12,333 in 1997.

The   Partnership   Guarantors'  depreciation  and   amortization
increased  to  $12,146 for the three months ended  September  30,
1998  from  $9,657 for the same period in 1997, a 25.8% increase.
For  the nine month period ended September 30, 1998, depreciation
and  amortization increased to $36,312 from $28,987  in  1997,  a
25.3%  increase.   These  increases  were  due  primarily  to  an
acceleration  in  the  step  up  depreciation  related   to   the
acquisition of Magma.

The  Royalty  Guarantors' amortization was $2,449 for  the  three
months  ended September 30, 1998 compared to $2,449 for the  same
period  of  1997. For the nine month period ended June 30,  1998,
depreciation  and amortization was $7,346 compared to  $7,346  in
1997.

Interest Expense:

The  Salton Sea Funding Corporation's interest expense  decreased
to  $8,074  for  the three months ended September 30,  1998  from
$9,047  for the same period in 1997, a 10.8% decrease.   For  the
nine  month  period  ended September 30, 1998,  interest  expense
decreased  to  $24,353 from $28,538 in 1997,  a  14.7%  decrease.
These decreases were due to reduced indebtedness.
<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 Guarantors' interest expense, net of capitalized
amounts, decreased to $3,500 for the three months ended September
30,  1998  from  $4,528  for the same period  in  1997,  a  22.7%
decrease.   For the nine month period ended September  30,  1998,
interest  expense,  net  of  capitalized  amounts,  decreased  to
$11,347  from $13,781 in 1997, a 17.7% decrease.  These decreases
were due primarily to reduced indebtedness.

The  Partnership Guarantors' interest expense, net of capitalized
amounts,  decreased to $178 for the three months ended  September
30,  1998  from $972 for the same period in 1997.  For  the  nine
month  period ended September 30, 1998, interest expense, net  of
capitalized  amounts, decreased to $1,044 from  $3,623  in  1997.
These decreases were a result of reduced indebtedness.

The  Royalty Guarantors' interest expense decreased to  $657  for
the  three months ended September 30, 1998 from $1,002  from  the
same  period in 1997.  For the nine month period ended  September
30,  1998,  interest expense decreased to $2,172 from  $3,228  in
1997.  These decreases were a result of 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
$9,122  for the three months ended September 30, 1998 from $9,424
for  the same period in 1997, a 3.2% decrease.  The decrease  was
primarily due to lower pre-tax income.  For the nine month period
ended   September  30,  1998,  the  provision  for  income  taxes
decreased  marginally to $17,280 from $17,533  in  1997.   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 $2,833 for  the
three  months ended September 30, 1998 compared to $981  for  the
same  period in 1997.  For the nine month period ended  September
30,  1998, the income tax provision was $8,249 compared to $2,466
for  the  same  period in 1997.  The increases are  a  result  of
<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)

higher  pre-tax income.  Tax obligations of the Royalty Guarantor
will be remitted to the parent company only to the extent of cash
flows available after operating expenses and debt service.

Net Income:

The  Salton  Sea Funding Corporation's net income for  the  three
months ended September 30, 1998 was $375 compared to $370 for the
same  period in 1997.  For the nine month period ended  September
30,  1998  net income increased to $1,174 compared to  $1,041  in
1997.

The  Salton  Sea Guarantors' net income increased to $19,180  for
the three months ended September 30, 1998 compared to $16,996 for
the  same  period  of  1997.  For the  nine  month  period  ended
September  30, 1998, net income increased to $37,165 compared  to
$35,033 in 1997.

The  Partnership Guarantors' net income decreased to $14,420  for
the three months ended September 30, 1998 compared to $14,919 for
the  same  period  of  1997.  For the  nine  month  period  ended
September  30, 1998, net income decreased to $27,149 compared  to
$27,659 in 1997.

The  Royalty Guarantors' net income increased to $4,703  for  the
three months ended September 30, 1998 compared to $2,100 for  the
same  period of 1997.  For the nine month period ended  September
30, 1998, net increased to $13,664 compared to $5,443 in 1997.
<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:

The  Funding  Corporation  and  the  Guarantors  (the  "Company")
developed  and  own the rights to a proprietary process  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.   A
pilot plant has successfully produced commercial quality zinc  at
the  Company's Imperial Valley Project.  The Company  intends  to
sequentially  develop  manganese,  silver,  gold,  lead,   boron,
lithium  and other products as it further develops the extraction
technology.   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.  If successfully  developed,  the
mineral   extraction  process  will  provide  an  environmentally
responsible and low cost minerals recovery methodology.

Minerals LLC, an indirect wholly-owned subsidiary of the  Company
is constructing the Zinc Recovery Project which will recover zinc
from the geothermal brine that has been extracted from the ground
for  use  in  the  Imperial Valley Projects (the  "Zinc  Recovery
Project").   The  Zinc Recovery Project will  utilize  geothermal
brine  after  the  brine  has been used by  the  Imperial  Valley
Projects  but  before the brine is re-injected into  the  ground.
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.  The zinc produced  by
the  Zinc  Recovery Project is expected to be sold  primarily  to
U.S.  West Coast customers such as steel companies, alloyers  and
galvanizers.

The  Zinc  Recovery Project will be 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").  Kvaerner  is  a  wholly-
owned  indirect  subsidiary of Kvaerner ASA,  an  internationally
recognized engineering and construction firm experienced  in  the
metals, mining and processing industries.  Total project costs of
the  Zinc  Recovery  Project  are expected  to  be  approximately
$200,925.


<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):

Power  LLC,  an indirect wholly owned subsidiary of the  Company,
proposes  to  expand the generating capacity of  the  Salton  Sea
Project  by  constructing Salton Sea Unit V.  Salton Sea  Unit  V
will  be  a  49 net MW geothermal power plant which will  extract
unutilized  geothermal  energy from  geothermal  brine  that  has
previously   passed  through  the  other  Salton  Sea   Projects.
Approximately one-third of the net output of Salton  Sea  Unit  V
will be sold to the Zinc Recovery Project.  The remainder will be
sold through the California Power Exchange ("PX").

Salton Sea Unit V will be constructed pursuant to a date certain,
fixed  price,  turnkey engineering, procurement and  construction
contract  (the  "Salton  Sea Unit V EPC  Contract")  by  Stone  &
Webster  Engineering Corporation ("SWEC").  SWEC is  one  of  the
world's  leading  engineering  and  construction  firms  for  the
construction  of  electric  power  plants  and,  in   particular,
geothermal power plants.  SWEC provided the engineering  for  the
construction   of   Salton  Sea  Unit  III  and   has   completed
engineering, procurement, construction or other related  work  on
twenty-seven  other geothermal power plants over  the  past  five
years.   Salton  Sea  Unit V is scheduled to commence  commercial
operation in mid-2000.  Total project costs of Salton Sea Unit  V
are expected to be approximately $119,067.

Turbo  LLC,  an indirect wholly-owned subsidiary of the  Company,
proposes   to   construct   the   TurboExpander   Project.    The
TurboExpander  Project is designed to generate  electricity  from
excess geothermal energy produced from the wells in the region of
the  wellfield  currently  supplying the  Vulcan  and  Del  Ranch
Projects.  The TurboExpander Project will have a capacity  of  10
net   MW.   Because  the  TurboExpander  Project  will  rely   on
geothermal  energy  that is already available, the  TurboExpander
Project  will  not  require additional geothermal  production  or
injection wells. The net output of the TurboExpander Project will
be sold to the Zinc Recovery Project or sold through the PX.

The  Partnership Projects propose to upgrade 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  of  scale  through
improved  brine  processing systems and the utilization  of  more
modern   equipment.   The  Partnership  Projects   expect   these
improvements  to  reduce brine-handling operating  costs  at  the
Vulcan Project and the Del Ranch Project.
<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  TurboExpander  Project  and the Region  2  Brine  Facilities
Construction  will  be constructed by SWEC  pursuant  to  a  date
certain,  fixed  price,  turnkey  engineering,  procurement   and
construction contract (the "Region 2 Upgrade EPC Contract").  The
obligations  of  SWEC  will be guaranteed  by  Stone  &  Webster,
Incorporated.  The TurboExpander Project is scheduled to commence
initial  operations in mid-2000 and the Region 2 Brine Facilities
Construction  is scheduled to be completed in early-2000.   Total
project  costs  for the TurboExpander Project and  the  Region  2
Brine  Facilities  Construction are expected to be  approximately
$63,747.

On  October 13, 1998 the Funding Corporation completed a sale  to
institutional  investors of $285,000 aggregate amount  of  7.475%
Senior Secured Series F Bonds due November 30, 2018. The proceeds
from  the offering will be used to fund construction of the  Zinc
Recovery  Project, Salton Sea Unit V, the TurboExpander  Project,
the  Region  2 Brine Facilities Construction, additional  capital
improvements and financing costs.  Total equity funding for these
projects is expected to be approximately $122,513.

The  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
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 and the East Mesa Project.  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.

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

<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   Y2K  problem  creates  uncertainty  for  the  Company  from
potential  problems in its own computer systems  and  from  third
parties  with  whom the Company deals on transactions  worldwide.
The  Company's operations utilize systems and equipment  provided
by  other  organizations. As a result,  year  2000  readiness  of
suppliers,  vendors, service providers or customers could  impact
the  Company's operations. The Company is assessing the readiness
of  such  constituent entities and the impacts on those  entities
that  rely upon the Company's services. The Company is unable  to
determine  at this time whether the consequences of Y2K  failures
of  third  parties will have a material impact on  the  Company's
results of operations, liquidity or financial condition.

The Company has commenced, for all of its information systems,  a
Y2K  date  conversion  project  to  address  all  necessary  code
changes, testing and implementation in order to resolve  the  Y2K
problem.  This  project involves use of a worldwide  Y2K  project
team  to  identify,  assess and correct all  of  its  information
technology  (IT)  and non-IT systems, as well  as,  identify  and
assess  third  party  systems. The  Company  has  identified  and
assessed  substantially all of its IT and non-IT systems  and  is
currently  in  process  of repairing or replacing  those  systems
which  are  not  year  2000 compliant.   Through  September,  the
Company  is approximately 87% complete in repairing or  replacing
their  own  computer  systems.  The Company  expects  to  be  95%
complete  by  December 31, 1998 and 100% complete of  correcting,
testing, and compliance by April 1999.

Total  Y2K  expenditures, for both repairing  or  replacing  non-
compliant systems, are expected to total approximately $100.  The
Company  is not aware of any additional material costs needed  to
be  incurred to bring all of its systems into compliance however,
there is no assurance that additional costs will not be incurred.

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

                  PART II - OTHER INFORMATION


Item 1 -  Legal proceedings.

    The  Salton  Sea Funding Corporation is not a  party  to  any
    material  legal  matters except those described  in  Footnote
    #2.

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 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.


                              SALTON SEA FUNDING CORPORATION


Date:  November 13, 1998      /s/  Craig M. Hammett

                                 Craig M. Hammett
                                 Senior Vice President and
                                 Chief Financial Officer

                              /s/  Patrick J. Goodman

                                 Patrick J. Goodman
                                 Vice President, Chief Accounting
                                 Officer and Controller
                                
<PAGE>                                
                                
                          EXHIBIT INDEX

Exhibit                                                    Page
  No.                                                       No.

  27     Financial Data Schedule                            38