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 June 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 June 30, 1998.
<PAGE>
                 SALTON SEA FUNDING CORPORATION

                           Form 10-Q

                         June 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, June 30, 1998
 and December 31, 1997                                        5

Statements of Operations for the Three and
 Six Months Ended June 30, 1998 and 1997                      6

Statements of Cash Flows for the
 Six Months Ended June 30, 1998 and 1997                      7

Notes to Financial Statements                                 8

SALTON SEA GUARANTORS

Independent Accountants' Report                               9

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

Combined Statements of Operations for the Three
 and Six Months Ended June 30, 1998 and 1997                 11

Combined Statements of Cash Flows for the
 Six Months Ended June 30, 1998 and 1997                     12

Notes to Combined Financial Statements                       13
<PAGE>
PARTNERSHIP GUARANTORS

Independent Accountants' Report                              14

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

Combined Statements of Operations for the Three
 and Six Months Ended June 30, 1998 and 1997                 16

Combined Statements of Cash Flows for the
 Six Months Ended June 30, 1998 and 1997                     17

Notes to Combined Financial Statements                       18

SALTON SEA ROYALTY COMPANY

Independent Accountants' Report                              19

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

Statements of Operations for the Three and
 Six Months Ended June 30, 1998 and 1997                     21

Statements of Cash Flows for the
 Six Months Ended June 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                                   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  June  30,  1998,  and  the  related
statements  of  operations for the three and  six  month  periods
ended  June  30, 1998 and 1997 and cash flows for the  six  month
periods ended June 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
July 23, 1998
<PAGE>
                SALTON SEA FUNDING CORPORATION

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



                                       June 30,     December 31,
                                         1998           1997
                                     ___________      __________
                                     (unaudited)
ASSETS
Cash                                    $  5,984      $  15,568
Prepaid expenses and other assets          2,527          2,823
Secured project notes from Guarantors    395,285        448,754
Investment in 1% of net assets of
  Guarantors                               7,541          7,144
                                      __________     __________
                                       $ 411,337      $ 474,289
                                      ==========     ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Accrued liabilities                    $   2,407      $   2,782
Due to affiliates                          2,691         12,598
Senior secured notes and bonds           395,285        448,754
                                      __________     __________
  Total liabilities                      400,383        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                          5,588          4,789
                                      __________     __________
  Total stockholder's equity              10,954         10,155
                                      __________     __________
                                       $ 411,337      $ 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   Six Months Ended
                                      June 30            June 30
                                   1998      1997      1998      1997
Revenues:

Interest income                  $ 8,719 $  10,342  $ 17,709 $  20,747
Equity in earnings of Guarantors     236       198       397       341
                               _________  ________  ________  ________
Total revenues                     8,955    10,540    18,106    21,088
                               _________  ________  ________  ________

Expenses:

General and administrative 
  expenses                          235       219        473       459
Interest expense                  8,020     9,717     16,279    19,491
                               _________  ________  ________  ________
Total expenses                    8,255     9,936     16,752    19,950
                               _________  ________  ________  ________
Income before income taxes          700       604      1,354     1,138
Provision for income taxes          286       248        555       467
                              _________  _________  ________  ________
Net income                     $    414 $     356   $    799  $    671
                              =========  =========  ========  ========

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

                                                            Six Months Ended
                                                                 June 30,
                                                             1998        1997

Cash flows from operating activities:
  Net income                                              $    799   $     671
  Adjustments to reconcile net income to net
     cash flow from operating activities:
  Equity in earnings of guarantors                            (397)       (341)
  Changes in assets and liabilities:
     Prepaid expenses and other assets                         296         410
     Accrued liabilities                                      (375)       (286)
                                                        __________    _________
  Net cash flows from operating activities                     323         454
                                                        __________    _________
Cash flows from investing activities:
  Decrease in restricted cash                                  ---       7,773
  Principal repayments of secured project notes
  from Guarantors                                           53,469      45,114
                                                        __________    _________
  Net cash flows from investing activities                  53,469      52,887
                                                        __________    _________
Cash flows from financing activities:
  Decrease in due to affiliates                             (9,907)    (21,445)
  Repayment of senior secured notes and bonds              (53,469)    (45,114)
                                                        __________    _________
  Net cash flows from financing activities                 (63,376)    (66,559)
                                                        __________    _________
Net change in cash                                          (9,584)    (13,218)
Cash at the beginning of period                             15,568      13,218
                                                        __________    _________
Cash at the end of period                                $   5,984  $      ---
                                                        ==========    =========
Supplemental disclosures:
  Interest paid                                          $  16,570  $   19,777
                                                        ==========   ==========
Non-cash investing activities:
  Adjustments resulting from capital transactions
     of Guarantors                                      $     ---   $      (28)
                                                        ==========    =========

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 June 30, 1998 and the
results of operations for the three and six months ended June 30,
1998  and  1997 and cash flows for the six months ended June  30,
1998  and 1997.  The results of operations for the three and  six
months   ended  June  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.
<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 June 30,  1998,  and  the  related
combined  statements of operations for the three  and  six  month
periods  ended June 30, 1998 and 1997 and cash flows for the  six
month  periods  ended  June 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
July 23, 1998
<PAGE>
                     SALTON SEA GUARANTORS

                    COMBINED BALANCE SHEETS
                     (Dollars in Thousands)


                                              June 30,    December 31,
                                                1998          1997
                                             __________      _________
                                            (unaudited)
ASSETS
Accounts receivable                          $  19,612     $  15,823
Prepaid expenses and other assets               11,146        13,043
Property, plant, contracts and equipment, net  474,823       478,001
Excess of cost over fair value of net assets
   acquired, net                                48,834        49,486
                                             _________     _________
                                             $ 554,415     $ 556,353
                                              ========      ========


LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                            $     280     $     390
Accrued liabilities                             6,784         7,826
Due to affiliates                              48,695        47,741
Senior secured project note                   246,483       266,208
                                            _________     _________
  Total liabilities                           302,242       322,165

Total Guarantors' equity                      252,173       234,188
                                            _________     _________
                                            $ 554,415     $ 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        Six Months Ended
                                         June 30                    June 30
                                  _____________________    _____________________
                                    1998        1997         1998         1997
                                  ________    ________     ________     ________
Revenues:

Sales of electricity             $ 27,612     $ 25,169     $ 47,797   $ 48,423
Interest and other income               7          152           22        161
                                  _______      _______      _______    _______
  Total revenues                   27,619       25,321       47,819     48,584
                                  _______      _______      _______    _______
Expenses:

Operating, general and 
  administration                    7,800        6,844      14,547      14,005
Depreciation and amortization       3,726        3,647       7,440       7,289
Interest expense                    5,199        5,833      10,459      11,697
Less capitalized interest          (1,280)      (1,219)     (2,612)     (2,444)
                                  _______      _______     _______     _______
  Total expenses                   15,445       15,105      29,834      30,547
                                  _______      _______     _______     _______
Net income                       $ 12,174     $ 10,216    $ 17,985    $ 18,037
                                  =======      =======     =======     =======

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

               COMBINED STATEMENTS OF CASH FLOWS
                     (Dollars in Thousands)
                          (Unaudited)
                                                             Six Months Ended
                                                                  June 30,
                                                           ____________________
                                                             1998       1997
                                                          _________  _________
Cash flows from operating activities:
Net income                                               $  17,985    $ 18,037
Adjustments to reconcile net income to net
  cash flows from operating activities:
   Depreciation and amortization                             7,440       7,289
   Changes in assets and liabilities:
    Accounts receivable                                     (3,789)     (2,344)
    Prepaid expenses and other assets                        1,897       2,465
    Accounts payable and accrued
     liabilities                                            (1,152)     (2,655)
                                                          _________   _________
Net cash flows from operating activities                    22,381      22,792
                                                          _________   _________
Cash flows from investing activities:
Capital expenditures                                        (3,610)     (3,420)
                                                          _________   _________
Cash flows from financing activities:
 Increase (decrease) in due to affiliates                      954      (2,556)
 Repayments of senior secured project note                 (19,725)    (16,816)
                                                          _________   __________
Net cash flows from financing activities                   (18,771)    (19,372)
                                                          _________   _________
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  June 30, 1998 and the results of operations for the three and
six  months ended June 30, 1998 and 1997 and cash flows  for  the
six  months  ended  June  30, 1998  and  1997.   The  results  of
operations for the three and six months ended June 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 June 30,  1998,  and  the  related
combined  statements of operations for the three  and  six  month
periods  ended June 30, 1998 and 1997 and cash flows for the  six
month  periods  ended  June 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
July 23, 1998
<PAGE>
                     PARTNERSHIP GUARANTORS

                    COMBINED BALANCE SHEETS
                     (Dollars in Thousands)


                                      June  30,      December 31,
                                        1998             1997
                                     (unaudited)
ASSETS
Accounts receivable                    $  33,761      $  23,481
Prepaid expenses and other assets         16,318         13,121
Due from affiliates                      107,508        124,311
Property, plant, contracts 
  and equipment, net                     369,260        370,666
Management fee from affiliates            70,254         70,082
Excess of cost over fair value of 
  net assets acquired, net               133,340        135,122
                                       _________      _________
                                       $ 730,441      $ 736,783
                                       =========      =========


LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                       $   2,401      $   1,338
Accrued liabilities                       20,874         23,285
Senior secured project notes             117,729        143,610
Deferred income taxes                    115,009        106,851
                                       _________      _________
Total liabilities                        256,013        275,084

Guarantors' equity:
Common stock                                   3              3
Additional paid-in capital               387,663        387,663
Retained earnings                         86,762         74,033
                                       _________      _________
Total Guarantors' equity                 474,428        461,699
                                       _________      _________
                                       $ 730,441      $ 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    Six Months Ended
                              June 30              June 30
                          1998       1997      1998      1997
                        _________ _________ _________ _________
Revenues:

Sales of electricity     $ 39,574  $ 38,165 $  73,671  $ 72,911
Interest and other income   1,298     1,022     2,032    1,567
                        _________ _________ _________ _________
Total revenues             40,872    39,187    75,703   74,478
                        _________ _________ _________ _________
Expenses:

Operating, general and
   administration          15,694    15,366    29,784    31,648
Depreciation and 
   amortization            14,011     9,686    24,166    19,330
Interest expense            2,456     3,548     5,753     7,199
Less capitalized interest  (2,425)   (2,302)   (4,887)   (4,548)
                        _________ _________ _________ _________

Total expenses             29,736    26,298    54,816    53,629
                        _________ _________ _________ _________

Income before income taxes 11,136    12,889    20,887    20,849
Provision for income taxes  4,357     5,006     8,158     8,109
                        _________ _________ _________ _________

Net income               $  6,779  $  7,883  $ 12,729  $ 12,740
                        ========= ========= ========= =========

The accompanying notes are an integral part of these financial  statements.
<PAGE>
                    PARTNERSHIP GUARANTORS
               COMBINED STATEMENTS OF CASH FLOWS
                     (Dollars in Thousands)
                          (Unaudited)
                                               Six Months Ended
                                                    June 30,
                                                1998      1997
                                              __________________
Cash flows from operating activities:
Net income                                  $  12,729 $  12,740
Adjustments to reconcile net income to net
  cash flow from operating activities:
   Depreciation and amortization               24,166    19,330
   Deferred income taxes                        8,158     8,109
   Changes in assets and liabilities:
     Accounts receivable                      (10,280)   (5,242)
     Prepaid expenses and other assets         (3,197)    2,818
     Accounts payable and accrued
      liabilities                              (1,348)     (985)
                                            _________ _________
Net cash flows from operating activities       30,228    36,770
                                            _________ _________
Cash flows from investing activities:
Capital expenditures                          (19,671)  (19,383)
Management fee                                 (1,479)   (1,490)
                                            _________ _________
Net cash flows from investing activities      (21,150)  (20,873)
                                            _________ _________
Cash flows from financing activities:
Repayments of senior secured project notes    (25,881)  (19,297)
Decrease in due from affiliates                16,803     6,193
Distributions to parent                             -    (2,793)
                                            _________ _________
Net cash flows from financing activities       (9,078)  (15,897)
                                            _________ _________
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 June 30, 1998 and the results of operations  for
the  three and six months ended June 30, 1998 and 1997  and  cash
flows  for  the  six months ended June 30, 1998  and  1997.   The
results of operations for the three and six months ended June 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 June 30, 1998, and the related  statements
of  operations for the three and six month periods ended June 30,
1998 and 1997 and cash flows for the six month periods ended June
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
July 23, 1998
<PAGE>
                   SALTON SEA ROYALTY COMPANY

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



                                        June 30,    December 31,
                                          1998          1997
                                      ___________    ___________
                                      (unaudited)
ASSETS
Due from affiliates                     $  36,390     $  19,114
Royalty stream, net                        27,375        31,818
Excess of cost over fair value of net assets
  acquired, net                            33,642        34,096
Prepaid expenses and other assets             747           981
                                       __________    __________
                                        $  98,154     $  86,009
                                       ==========    ==========


LIABILITIES AND EQUITY
Liabilities:
Accrued liabilities                     $  34,108     $  21,306
Senior secured project note                31,071        38,934
Deferred income taxes                       5,513         7,268
                                       __________    __________
  Total liabilities                        70,692        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                          25,901        16,940
                                       __________    __________
Total equity                               27,462        18,501
                                       __________    __________
                                        $  98,154     $  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       Six Months Ended
                                           June 30                 June 30
                                    _____________________ ____________________
                                      1998        1997        1998         1997
                                    _______      _______    ________    ________
Revenues:
Royalty income                    $  12,642     $ 7,922   $  24,680   $ 15,783

Expenses:
Operating, general and
  administrative expenses             2,032       1,955       3,891      3,832
Amortization of royalty stream
   and goodwill                       2,448       2,448       4,897      4,897
Interest expense                        739       1,094       1,515      2,226
                                   ________      ______    ________    _______
Total expenses                        5,219       5,497      10,303     10,955
                                   ________      ______    ________    _______

Income before income taxes            7,423       2,425      14,377      4,828
Provision for income taxes            2,791         748       5,416      1,485
                                   ________      ______    ________    _______

Net income                          $ 4,632     $ 1,677     $ 8,961    $ 3,343
                                   ========     =======    ========    =======

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

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


                                                           Six Months Ended
                                                                June 30,
                                                         _____________________
                                                           1998         1997
                                                         _________    ________
Cash flows from operating activities:
Net income                                               $  8,961     $  3,343
Adjustments to reconcile net income to net
  cash flow from operating activities:
   Amortization of royalty stream and goodwill              4,897        4,897
   Deferred income taxes                                   (1,755)      (1,755)
   Changes in assets and liabilities:
   Prepaid expenses and other assets                          234          354
   Accrued liabilities                                     12,802        2,776
Net cash flows from operating activities                   25,139        9,615

Net cash flows from financing activities:
Increase in due from affiliates                           (17,276)        (614)
Repayment of senior secured project note                   (7,863)      (9,001)
                                                         _________    _________
Net cash flows from financing activities                  (25,139)      (9,615)

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  June 30, 1998 and the results of operations for the three and
six  months ended June 30, 1998 and 1997 and cash flows  for  the
six  months  ended  June  30, 1998  and  1997.   The  results  of
operations for the three and six months ended June 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
contract 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.

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
<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)

using  a  Base  Price  which is subject to quarterly  adjustments
based  on a basket of indices.  The time period weighted  average
energy payment for Salton Sea I was 5.3 cents per kWh during  the
six  months ended June 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 six months ended June 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 six months ended  June
30,  1998.   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
<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)

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      Six Months Ended
                                  June 30,               June 30,
                           _________________________________________
                              1998       1997      1998     1997
                           ________  _________ __________ ________
Overall capacity factor       98.9%      89.4%     90.2%    94.1%
Capacity (NMW) (average)      119.4      119.4     119.4    119.4
kWh produced (in thousands) 258,000    233,100   467,900  487,900

The overall capacity factor for the Salton Sea Projects increased
for  the  three months ended June 30, 1998 compared to  the  same
period  in 1997 due to the scheduled overhauls in May 1997.   The
overall capacity factor for the Salton Sea Projects decreased for
the six months ended June 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     Six Months Ended
                                June 30,             June 30,
                          _________________________________________
                             1998       1997      1998     1997
                          ________  _________ __________________
Overall capacity factor       93.5%      98.2%     95.9%   100.0%
Capacity NMW (average)          148        148       148      148
kWh produced (in thousands) 302,100    317,400   616,600  642,700

The  overall  capacity factor decreased for  the  three  and  six
months  ended June 30, 1998 compared to the same periods in  1997
due  to  turbine  overhauls  at  Elmore  and  Leathers  and  well
workovers at Elmore partially offset by 1997 overhauls at  Vulcan
and Del Ranch.
<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 $8,955
for  the  three months ended June 30, 1998 from $10,540  for  the
same  period in 1997, a 15.0% decrease.  For the six months ended
June  30,  1998,  revenues decreased to $18,106 from  $21,088  in
1997,  a  14.1%  decrease.   These decreases  are  due  to  lower
interest  income due to lower cash balances which  resulted  from
additional capital expenditures and debt repayment.

The  Salton  Sea  Guarantors' sales of electricity  increased  to
$27,612 for the three months ended June 30, 1998 from $25,169 for
the  same  period  of  1997, a 9.7% increase.  The  increase  was
primarily due to increased electric production. For the six month
period  ended  June 30, 1998, sales of electricity  decreased  to
$47,797 from $48,423 in 1997, a 1.3% decrease.

The  Partnership  Guarantors' sales of electricity  increased  to
$39,574 for the three months ended June 30, 1998 from $38,165 for
the  same  period in 1997, a 3.7% increase.  For  the  six  month
period  ended  June 30, 1998, sales of electricity  increased  to
$73,671  from $72,911 in 1997, a 1.0% 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 $12,642 for the three
months  ended June 30, 1998 from $7,922 for the same period  last
year, a 59.6% increase.  For the six month period ended June  30,
1998,  revenue increased to $24,680 from $15,783 in 1997, a 56.4%
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,
increased  to  $7,800, for the three months ended June  30,  1998
from  $6,844 for the same period in 1997, a 14.0% increase.  This
increase  is  primarily  due to higher  maintenance  expense  and
higher royalty expense from increased revenue. For the six  month
period  ended  June  30,  1998, operating expenses  increased  to
$14,547 from $14,005 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  $15,694 for the three months ended June  30,  1998
from  $15,366  for  the same period in 1997. For  the  six  month
period  ended  June  30,  1998, operating expenses  decreased  to
$29,784  from $31,648 in 1997, a 5.9% decrease.  The decrease  in
the  second  quarter  was  due to a reduction  in  operating  and
maintenance costs.

The  Royalty Guarantors' operating expenses increased  to  $2,032
for the three months ended June 30, 1998 from $1,955 for the same
period in 1997, a 3.9% increase.  For the six month period  ended
June 30, 1998, operating expenses increased to $3,891 from $3,832
in  1997,  a  1.5%  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
increased to $3,726 for the three months ended June 30, 1998 from
$3,647 for the same period of 1997, a 2.2% increase.  For the six
month  period  ended June 30, 1998, depreciation and amortization
increased to $7,440 from $7,289 in 1997.

The   Partnership   Guarantors'  depreciation  and   amortization
increased  to  $14,011 for the three months ended June  30,  1998
from  $9,686 for the same period in 1997, a 44.7% increase.   For
the  six  month  period  ended June 30,  1998,  depreciation  and
amortization increased to $24,166 from $19,330 in 1997,  a  25.0%
increase.   These increases were due primarily to an increase  in
the step up depreciation.

The  Royalty  Guarantors' amortization was $2,448 for  the  three
months ended June 30, 1998 compared to $2,448 for the same period
of   1997.  For  the  six  month  period  ended  June  30,  1998,
depreciation  and amortization was $4,897 compared to  $4,897  in
1997.

Interest Expense:

The  Salton Sea Funding Corporation's interest expense  decreased
to  $8,020  for the three months ended June 30, 1998 from  $9,717
for the same period in 1997, a 17.5% decrease.  For the six month
period ended June 30, 1998, interest expense decreased to $16,279
from $19,491 in 1997, a 16.5% 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 $3,919 for the three months ended June  30,
1998  from  $4,614 for the same period in 1997, a 15.1% decrease.
For  the  six month period ended June 30, 1998, interest expense,
net  of  capitalized amounts, decreased to $7,847 from $9,253  in
1997,  a  15.2% decrease.  These decreases were due primarily  to
reduced indebtedness.

The  Partnership Guarantors' interest expense, net of capitalized
amounts,  decreased to $30 for the three months  ended  June  30,
1998  from $1,246 for the same period in 1997.  For the six month
period  ended June 30, 1998, interest expense, net of capitalized
amounts,  decreased to $866 from $2,651 in 1997. These  decreases
were a result of reduced indebtedness.

The  Royalty Guarantors' interest expense decreased to  $739  for
the  three months ended June 30, 1998 from $1,094 from  the  same
period  in  1997.  For the six month period ended June 30,  1998,
interest expense decreased to $1,515 from $2,226 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
$4,357  for the three months ended June 30, 1998 from $5,006  for
the  same  period  in 1997, a 13.0% decrease.  The  decrease  was
primarily due to the increased step up depreciation.  For the six
month  period ended June 30, 1998, the provision for income taxes
increased marginally to $8,158 from $8,109 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 $2,791 for  the
three  months ended June 30, 1998 compared to $748 for  the  same
period  in  1997.  For the six month period ended June 30,  1998,
the  income tax provision was $5,416 compared to $1,485  for  the
same  period in 1997.  The increases are a result of 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.
<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 for  the  three
months ended June 30, 1998 was $414 compared to $356 for the same
period in 1997.  For the six month period ended June 30, 1998 net
income increased to $799 compared to $671 in 1997.

The  Salton  Sea Guarantors' net income increased to $12,174  for
the  three months ended June 30, 1998 compared to $10,216 for the
same  period  of 1997.  For the six month period ended  June  30,
1998,  net  income decreased to $17,985 compared  to  $18,037  in
1997.

The  Partnership Guarantors' net income decreased to  $6,779  for
the  three months ended June 30, 1998 compared to $7,883 for  the
same  period  of 1997.  For the six month period ended  June  30,
1998,  net  income decreased to $12,729 compared  to  $12,740  in
1997.

The  Royalty Guarantors' net income increased to $4,632  for  the
three months ended June 30, 1998 compared to $1,677 for the  same
period  of  1997.  For the six month period ended June 30,  1998,
net increased to $8,961 compared to $3,343 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  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.

The Funding Corporation and Guarantors have commenced, for all of
its  information systems, a year 2000 date conversion project  to
address  all  necessary code changes, testing and implementation.
The  "Year  2000 Computer Problem" creates risk for  the  Funding
Corporation  and the Guarantors from unforeseen problems  in  its
own computer systems and from third parties with whom the Funding
Corporation  and  the Guarantors deals on financial  transactions
worldwide.   Such  failures  of  the  Funding  Corporation's   or
Guarantors' and/or third parties' computer systems could  have  a
material  impact  on  the  Funding Corporation's  or  Guarantors'
ability  to  conduct its business, and especially to process  and
account  for  the  transfer of funds electronically.   Management
believes  that  it  will  substantially complete  the  year  2000
implementation before January 1, 2000 and that the related  costs
and  potential effect should not have a material financial impact
on the Funding Corporation and the Guarantors.
<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.

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.
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                           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:  August 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                            35
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