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, 1996
          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
(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, 1996.

                 SALTON SEA FUNDING CORPORATION

                            Form 10-Q

                       September 30, 1996
     -------------------------------------------------------
                                
                         C O N T E N T S
                                
                                
                 PART I:  FINANCIAL INFORMATION


Item 1.  Financial Statements                                            Page

SALTON SEA FUNDING CORPORATION

Independent Accountants Reports                                           4-5

Balance Sheets, September 30, 1996
 and December 31, 1995                                                      6

Statements  of  Operations for the Three and  Nine  Months  Ended
September 30, 1996  and from June 20, 1995 (Inception Date) through
September 30, 1995                                                          7

Statements of Cash Flows for the Nine Months Ended September  30,
1996 and from June 20, 1995 (Inception Date) through September  30,
1995                                                                        8

Notes to Financial Statements                                               9

SALTON SEA GUARANTORS

Independent Accountants Report                                             10

Combined Balance Sheets, September 30, 1996
 and December 31, 1995                                                     11

Combined Statements of Operations for the Three
 and Nine Months Ended September 30, 1996 and 1995                         12

Combined Statements of Cash Flows for the
 Nine Months Ended September 30, 1996 and 1995                             13

Notes to Combined Financial Statements                                     14

PARTNERSHIP GUARANTORS

Independent Accountants Report                                             16

Combined Balance Sheets, September 30, 1996
 and December 31, 1995                                                     17

Combined Statements of Operations for the Three
 and Nine Months Ended September 30, 1996 and 1995                         18

Combined Statements of Cash Flows for the
 Nine Months Ended September 30, 1996 and 1995                             19

Notes to Combined Financial Statements                                     20

SALTON SEA ROYALTY COMPANY

Independent Accountants Report                                             22

Balance Sheets, September 30, 1996
 and December 31, 1995                                                     23

Statements of Operations for the Three and
 Nine Months Ended September 30, 1996 and 1995                             24

Statements of Cash Flows for the
 Nine Months Ended September 30, 1996 and 1995                             25

Notes to Financial Statements                                              26

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations                     27


                  PART II:  OTHER INFORMATION

Item 1.  Legal Proceedings                                                 34
Item 2.  Changes in Securities                                             34
Item 3.  Defaults on Senior Securities                                     34
Item 4.  Submission of Matters to a Vote of Security Holders               34
Item 5.  Other Information                                                 34
Item 6.  Exhibits and Reports on Form 8-K                                  34

Signatures                                                                 35




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, 1996,  and  the  related
statements  of  operations for the three and nine  month  periods
ended September 30, 1996 and cash flows for the nine months ended
September   30,  1996.   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, 1995, and the related  statements
of  operations,  stockholders' equity, and  cash  flows  for  the
period  from June 20, 1995 (inception date) through December  31,
1995 (not presented herein); and in our report dated January  26,
1996,  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,  1995  is  fairly
stated,  in  all  material respects, in relation to  the  balance
sheet from which it has been derived.



DELOITTE & TOUCHE LLP

Omaha, Nebraska
October 22, 1996





INDEPENDENT ACCOUNTANTS' REPORT

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

We  have  audited the accompanying statements of  operations  and
cash flows of Salton Sea Funding Corporation (the "Company")  for
the  period from June 20, 1995 through September 30, 1995.  These
financial  statements  are the responsibility  of  the  Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We  conducted  our  audit in accordance with  generally  accepted
auditing  standards.  Those standards require that  we  plan  and
perform  the  audit to obtain reasonable assurance about  whether
the  financial statements are free of material misstatement.   An
audit  includes  examining, on a test basis, evidence  supporting
the  amounts  and  disclosures in the financial  statements.   An
audit also includes assessing the accounting principles used  and
significant  estimates made by management, as well as  evaluating
the  overall financial statement presentations.  We believe  that
our audit provides a reasonable basis for our opinion.

In  our opinion, such financial statements present fairly, in all
material  respects, the results of operations and cash  flows  of
Salton Sea Funding Corporation for the period from June 20,  1995
through  September 30, 1995 in conformity with generally accepted
accounting principles.



DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 4, 1996

                SALTON SEA FUNDING CORPORATION
                                
                         BALANCE SHEETS
                     (Dollars in Thousands)
     -------------------------------------------------------


                                   September 30,    December 31,
                                         1996            1995
                            -------------------------------------
-
                                    (unaudited)
ASSETS
Cash                                   $ 49,396     $     4,393
Restricted cash and short-term
  investments                            15,138          57,256
Prepaid expenses and other assets        13,164           3,070
Notes receivables from affiliates       563,035         452,088
Investment in 1% of net assets of
  Guarantors                              6,116           5,714
                                  -------------   -------------
                                       $646,849        $522,521
                                        =======         =======

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Accrued liabilities                   $  13,044      $    3,889
Due to affiliates                        62,597          59,594
Senior secured notes and bonds          563,035         452,088
                                  -------------   -------------
  Total liabilities                     638,676         515,571

Stockholder's equity:
Common stock--authorized 1,000
  shares, par value $.01 per share;
  issued and outstanding 100 shares           -               -
Additional paid-in capital                5,308           5,443
Retained earnings                         2,865           1,507
                                  -------------   -------------
  Total stockholder's equity              8,173           6,950
                                  -------------   -------------
                                       $646,849        $522,521
                                        =======         =======

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

                 SALTON SEA FUNDING CORPORATION
                                
                    STATEMENTS OF OPERATIONS
                     (Dollars in Thousands)
     -------------------------------------------------------


                       Three Months    Nine MonthsFrom June 20, 1995
                          Ended           Ended    (Inception Date)
                      September 30,   September 30,    through
                           1996            1996   September 30, 1995
             -------------------------------------------------------------------
                     (unaudited)    (unaudited)
Revenues:

Interest income          $10,844        $28,504         7,414
Equity in earnings
 of Guarantors             303            537             185
                     -----------    -----------     ---------
Total revenues            11,147         29,041         7,599
                     -----------    -----------     ---------
Expenses:

General and
administrative expenses     241            467              -
Interest expense          10,339         26,272         6,586
                     -----------    -----------     ---------
Total expenses            10,580         26,739         6,586
                     -----------    -----------     ---------
Income before income taxes   567          2,302         1,013
Provision for income taxes   232            944           339
                     -----------    -----------     ---------
  Net income            $    335       $  1,358       $   674
                          ======         ======         =====

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


                 SALTON SEA FUNDING CORPORATION
                                
                    STATEMENTS OF CASH FLOWS
                     (Dollars in Thousands)
     -------------------------------------------------------


                                                            From June 20, 1995
                                          Nine Months        (Inception Date)
                                             Ended               through
                                       September 30, 1996   September 30, 1995
                                       ------------------   ------------------
                                           (unaudited)
Cash flows from operating activities:
  Net income                                    $  1,358        $   674
  Adjustments to reconcile net income to net
   cash provided by operating activities:
  Equity in earnings of guarantors                 (537)           (185)
  Changes in assets and liabilities:
   Prepaid expenses and other assets            (10,094)         (6,793)
   Accrued liabilities                             9,155           6,925
                                              -----------     -----------
  Net cash flows from operating activities         (118)             621
                                              -----------     -----------
Cash flows from investing activities:
Decrease (increase) in restricted cash and
  short-term investments                          42,118        (73,522)
Secured project notes of Guarantors            (135,000)       (475,000)
Decrease in notes receivable from affiliates      24,053          -
                                             -----------     -----------
  Net cash flows from investing activities      (68,829)       (548,522)
                                             -----------     -----------
Cash flows from financing activities:
Due to affiliates                                  3,003          95,568
Proceeds from offering of senior
  project notes and bonds                        135,000         475,000
Repayment on loans payable                      (24,053)               -
                                             -----------     -----------
  Net cash flows from financing activities       113,950         570,568
                                             -----------     -----------
Net change in cash                                45,003          22,667
Cash at the beginning of period                    4,393               -
                                             -----------     -----------
Cash at the end of period                        $49,396        $ 22,667
                                                  ======         =======
Non-cash investing and financing activities:
  Adjustments resulting from capital transactions
   of Guarantors                                $   (135)      $   2,000
                                                   ======         =======

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


                 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,  1996
and the results of operations for the three and nine months ended
September  30,  1996  and  from June 20,  1995  (inception  date)
through  September 30, 1995 and cash flows for  the  nine  months
ended  September 30, 1996 and from June 20, 1995 (inception date)
through September 30, 1995.

The  results  of operations for the three and nine  months  ended
September 30, 1996 are not necessarily indicative of the  results
to be expected for the full year.

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

2. Other Footnote Information:

Reference  is  made  to the Funding Corporation's  most  recently
issued  annual  report  on  Form 10-K that  included  information
necessary   or  useful  to  the  understanding  of  the   Funding
Corporation's business and financial statement presentations.  In
particular,  the  significant accounting policies  and  practices
were  presented  as  Note 2 to the Funding Corporation  financial
statements included in that filing.

3. Debt Offering:

On  June  20,  1996, the Funding Corporation issued  $135,000  of
Senior  Secured  Notes and Bonds, consisting  of  $70,000,  7.02%
Senior  Secured  Series D Notes, due May 30, 2000,  and  $65,000,
8.30%  Senior  Secured Series E Bonds, due  May  30,  2011,  with
maturities  of  $25,850,  $32,000, $22,728,  $5,500,  $1,000  and
$47,922   for  1997,  1998,  1999,  2000,  2001  and  thereafter,
respectively.




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, 1996, and the  related
combined  statements of operations for the three and  nine  month
periods ended September 30, 1996 and 1995 and cash flows for  the
nine  months ended September 30, 1996 and 1995.  These  financial
statements are the responsibility of the 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, 1995, and the  related  combined
statements of operations, Guarantors' equity, and cash flows  for
the  year  then ended (not presented herein); and in  our  report
dated  January 26, 1996, 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,  1995  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
October 22, 1996


                      SALTON SEA GUARANTORS
                                
                     COMBINED BALANCE SHEETS
                     (Dollars in Thousands)
     -------------------------------------------------------


                                   September 30,   December 31,
                                         1996           1995
                                   -------------   ------------
                                    (unaudited)
ASSETS
Cash                                   $     65       $    454
Accounts receivable                      22,070         10,436
Prepaid expenses and other assets        18,978         20,129
Property, plant, contracts and
  equipment, net                        470,059        417,287
Goodwill, net                            51,116         52,094
                                  -------------   -------------
                                       $562,288       $500,400
                                        =======         =======


LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                       $    177      $     939
Accrued liabilities                      13,523          4,043
Due to affiliates                        40,046          4,319
Senior secured project note             310,670        321,500
                                  -------------   -------------
  Total liabilities                     364,416        330,801

Total Guarantors' equity                197,872        169,599
                                  -------------   -------------
                                       $562,288       $500,400
                                        =======         =======

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


                      SALTON SEA GUARANTORS
                                
                COMBINED STATEMENTS OF OPERATIONS
                     (Dollars in Thousands)
                           (Unaudited)
     -------------------------------------------------------


                          Three Months Ended  Nine Months Ended
                              September 30,     September 30,
                          ------------------  -------------------
                              1996      1995      1996     1995
                         ----------   ------  ---------   -------
Revenues:

Sales of electricity         $33,413  $23,724   $68,646   $55,807
Interest and other income          3      186       131       595
                         ---------------------------------------------
  Total revenues              33,416   23,910    68,777    56,402
                         --------------------------------------------
Expenses:

Operating, general and
   administration              7,576     8,055    19,302     21,038
Depreciation and amortization  3,973    1,553     9,859     7,953
Interest expense               6,205    6,449    18,724    19,139
Less capitalized interest    (1,174)  (3,061)   (7,381)   (6,480)
                         --------------------------------------------
  Total expenses              16,580   12,996    40,504    41,650
                         --------------------------------------------

Income before minority
   interest                   16,836   10,914    28,273    14,752
Minority interest                  -        -         -     1,393
                         --------------------------------------------
Net income                   $16,836 $ 10,914   $28,273  $ 13,359
                              ======    ======    ======   ======

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


                      SALTON SEA GUARANTORS
                                
                COMBINED STATEMENTS OF CASH FLOWS
                     (Dollars in Thousands)
                           (Unaudited)
     -------------------------------------------------------

                                             Nine Months Ended
                                                September 30,
                                          -----------------------
                                              1996      1995
                                          -----------------------
Cash flows from operating activities:
 Net income                                    $28,273 $  13,359
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Minority interest                                -     1,393
   Depreciation and amortization                9,859     7,953
   Changes in assets and liabilities:
    Accounts receivable                       (11,634)   (5,203)
    Prepaid expenses and other assets            1,151   (3,664)
    Due to (from) affiliates                   35,727  (32,734)
    Accounts payable and accrued
     liabilities                                8,718     4,225
                                           -------------------------
Net cash flows from operating activities       72,094   (14,671)
                                           -------------------------
Cash flows from investing activities:
 Purchase of Guarantors by CalEnergy,
  net of cash                                       -  (171,964)
 Capital expenditures                         (61,653)  (48,221)
 Net decrease in marketable securities              -     4,988
 Decrease in restricted cash                        -     3,400
                                           -------------------------
Net cash flows from investing activities      (61,653) (211,797)
                                           -------------------------
Cash flows from financing activities:
 Repayments on loans payable                  (10,830) (298,672)
 Loan proceeds                                      -   509,364
 Contributions from parent                          -     29,176
 Deferred financing costs                            -  (8,400)
 Distributions to parent                            -    (5,000)
                                           -------------------------
Net cash flows from financing activities      (10,830)  226,468
                                           -------------------------
Net change in cash                               (389)        -
Cash at beginning of period                       454         -
                                           ------------------------
Cash at end of period                         $    65   $     -
                                                =======   =======

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


                      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, 1996 and the results of operations for the three
and  nine months ended September 30, 1996 and 1995 and cash flows
for the nine months ended September 30, 1996 and 1995.

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

The  results  of operations for the three and nine  months  ended
September 30, 1996 and 1995 are not necessarily indicative of the
results to be expected for the full year.

2. Other Footnote Information:

Reference  is  made to the Salton Sea Funding Corporation's  most
recently   issued  annual  report  on  Form  10-K  that  included
information  necessary  or  useful to the  understanding  of  the
Guarantors'  business and financial statement presentations.   In
particular,  the Guarantors' significant accounting policies  and
practices  were  presented as Note 2 to the Guarantors'  combined
financial statements included in that filing.

3. Property, Plant, Contracts and Equipment:

Property,  plant,  contracts  and  equipment  consisted  of   the
following:

                                   September 30,    December 31,
                                       1996            1995
                                   -------------    -----------

Plant and equipment                   $339,042         $173,509
Salton Sea Unit 4 construction
   in progress                               -          108,632
Power sale agreements                   64,609           64,609
Mineral extraction                      63,990           60,577
Exploration and development costs       19,132           17,793
                                  -------------   -------------
                                       486,773          425,120
Less accumulated depreciation
  and amortization                    (16,714)          (7,833)
                                  -------------   -------------
                                      $470,059         $417,287
                                        =======         =======

                      SALTON SEA GUARANTORS
                                
             NOTES TO COMBINED FINANCIAL STATEMENTS
                         (in thousands)
     -------------------------------------------------------


4. Purchase of Magma Power Company:

On  January  10, 1995, CalEnergy Company, Inc. ("CECI")  acquired
approximately 51% of outstanding shares of common stock of  Magma
Power  Company (the "Magma Common Stock") through a  cash  tender
offer and completed the Magma acquisition on February 24, 1995 by
acquiring  approximately 49% of the outstanding shares  of  Magma
Common Stock not owned by CECI through a merger.  The transaction
was accounted for as a purchase business combination.

Unaudited  pro  forma  combined revenue and  net  income  of  the
Guarantors on a purchase, push down basis of accounting, for  the
nine  months ended September 30, 1995, as if the acquisition  had
occurred  at the beginning of the period after giving  effect  to
certain  pro  forma adjustments related to the  acquisition  were
$56,402 and $13,869, respectively.




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, 1996, and the  related
combined  statements of operations for the three and  nine  month
periods ended September 30, 1996 and 1995 and cash flows for  the
nine  months ended September 30, 1996 and 1995.  These  financial
statements are the responsibility of the 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, 1995, and the  related  combined
statements of operations, Guarantors' equity, and cash flows  for
the  year  then ended (not presented herein); and in  our  report
dated  January 26, 1996, 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,  1995  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
October 22, 1996


                     PARTNERSHIP GUARANTORS
                                
                     COMBINED BALANCE SHEETS
                     (Dollars in Thousands)
     -------------------------------------------------------


                                   September 30,    December 31,
                                      1996              1995
                                   -------------    ------------
                                     (unaudited)
ASSETS
Cash                                    $      -       $ 11,146
Restricted cash and short-term
   investments                                 -          9,859
Accounts receivable                        30,586        11,841
Due from affiliates                        91,309        54,949
Prepaid expenses and other assets          24,588         9,651
Property, plant, contracts and 
  equipment, net                          369,646       298,956
Management fee                             66,768        63,520
Goodwill, net                             139,577       142,250
                                         --------      --------
                                         $722,474      $602,172
                                          =======       =======


LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                        $   4,542     $   3,566
Accrued liabilities                        22,675        19,995
Loans payable                                   -        43,766
Senior secured project notes              189,955        62,706
Deferred income taxes                     105,799        98,407
                                     ------------ -------------
Total liabilities                         322,971       228,440

Guarantors' equity:
Common stock                                    3             3
Additional paid-in capital                362,737       359,092
Retained earnings                          36,763        14,637
                                    ------------- -------------
Total Guarantors' equity                  399,503       373,732
                                    ------------- -------------
                                         $722,474      $602,172
                                          =======       =======

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


                     PARTNERSHIP GUARANTORS
                                
                COMBINED STATEMENTS OF OPERATIONS
                     (Dollars in Thousands)
                           (Unaudited)
     -------------------------------------------------------


                          Three Months Ended    Nine Months Ended
                               September 30,      September  30,
                        ---------------------   ------------------
                              1996      1995    1996       1995
                        ----------------------  ------------------
Revenues:

Sales of electricity        $46,031   $23,205   $98,186  $59,294
Interest and other income     2,608     5,359     6,757    8,029
                         ---------------------------------------------
  Total revenues             48,639    28,564   104,943   67,323
                         ---------------------------------------------
Expenses:

Operating, general and
   administration            17,016     8,333    41,426   23,792
Depreciation and amortization 9,870     8,787    24,159   14,040
Interest expense              4,193     6,767     9,455   14,162
Less capitalized interest   (2,168)   (5,914)   (6,637)  (5,914)
                         --------------------------------------------
  Total expenses             28,911    17,973    68,403   46,080
                         --------------------------------------------
Income before income taxes   19,728    10,591    36,540   21,243
Provision for income taxes    7,702     3,885    14,414    8,125
                         --------------------------------------------
Income before minority
   interest                  12,026     6,706    22,126   13,118
Minority interest                 -         -         -    1,427
                         --------------------------------------------
Net income                  $12,026   $ 6,706  $22,126   $11,691
                              ======    ======    ======   ======

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

                     PARTNERSHIP GUARANTORS
                                
                COMBINED STATEMENTS OF CASH FLOWS
                     (Dollars in Thousands)
                           (Unaudited)
     -------------------------------------------------------


                                              Nine Months Ended
                                                September 30,
                                          -----------------------
                                                 1996      1995
                                          ------------------------

Cash flows from operating activities:
 Net income                                   $ 22,126  $ 11,691
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Minority interest                                 -     1,427
   Depreciation and amortization                24,159    14,040
   Changes in assets and liabilities:
     Accounts receivable                       (4,268)   (5,388)
     Due from affiliates                      (37,279)   (2,320)
     Prepaid expenses and other assets         (9,735)     1,340
     Accounts payable and accrued liabilities      503    11,070
     Deferred income taxes                       4,192         -
     Other, net                                      -   (7,005)
                                           -------------------------
Net cash flows from operating activities         (302)    24,855
                                           -------------------------
Cash flows from investing activities:
 Purchase of Guarantors by CalEnergy,
  net of cash                                        - (197,810)
 Capital expenditures                         (14,723)   (1,977)
 Net decrease in marketable securities               -     7,457
 Management fee                                      -  (29,423)
Decrease (increase) in restricted cash
   and short-term investments                  23,085    (1,134)
                                           -------------------------
Net cash flows from investing activities        8,362  (222,887)
                                           -------------------------
Cash flows from financing activities:
 Repayments on loans payable                  (99,809) (221,877)
 Deferred finance costs                              -   (9,714)
 Loan proceeds                                 135,000   288,185
 Distributions to parent                      (54,397)   143,505
                                           -------------------------
Net cash flows from financing activities      (19,206)   200,099
                                           -------------------------
Net change in cash                            (11,146)     2,067
Cash at beginning of period                     11,146         -
                                           -------------------------
Cash at end of period                       $        0   $ 2,067
                                                =======   =======

During  1996, CalEnergy Company, Inc. contributed $71,000 of  net
assets  acquired from Mission Edison, of which $12,956 was  cash,
to the Partnership Guarantors.

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


                     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, 1996 and the results of  operations
for  the three and nine months ended September 30, 1996 and  1995
and  cash flows for the nine months ended September 30, 1996  and
1995.

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

The  results  of operations for the three and nine  months  ended
September 30, 1996 and 1995 are not necessarily indicative of the
results to be expected for the full year.

2. Other Footnote Information:

Reference  is  made to the Salton Sea Funding Corporation's  most
recently   issued  annual  report  on  Form  10-K  that  included
information  necessary  or  useful to the  understanding  of  the
Guarantors'  business and financial statement presentations.   In
particular,  the Guarantors' significant accounting policies  and
practices  were  presented as Note 2 to the Guarantors'  combined
financial statements included in that filing.

3. Property, Plant, Contracts and Equipment:

Property,  plant,  contracts  and  equipment  consisted  of   the
following:

                                   September 30,    December 31,
                                          1996           1995
                                   -------------    -----------
Plant and equipment                   $  62,449        $ 58,532
Power sale agreements                   122,997          44,966
Process license                          46,290          46,290
Mineral extraction                      118,987         112,350
Exploration and development costs        56,673          53,449
                                    ------------  -------------
                                        407,396         315,587
Less accumulated depreciation
  and amortization                     (37,750)        (16,631)
                                    ------------  -------------
                                       $369,646        $298,956
                                         =======        =======


                     PARTNERSHIP GUARANTORS
                                
             NOTES TO COMBINED FINANCIAL STATEMENTS
                         (in thousands)
     -------------------------------------------------------


4.   Purchase of Magma Power Company

On  January  10, 1995, CalEnergy Company, Inc. ("CECI")  acquired
approximately  51% of the outstanding shares of common  stock  of
Magma  Power  Company (the "Magma Common Stock") through  a  cash
tender offer and completed the Magma acquisition on February  24,
1995 by acquiring approximately 49% of the outstanding shares  of
Magma  Common  Stock  not owned by CECI through  a  merger.   The
transaction was accounted for as a purchase business combination.

5. Purchase of Edison Mission Energy's Partnership Interests

On  April  17,  1996 CECI completed the indirect  acquisition  of
Edison Mission Energy's partnership interests in the Vulcan, Hoch
(Del Ranch), Leathers and Elmore geothermal operating facilities.
Magma Power Company, a wholly-owned subsidiary of CECI, currently
operates  these facilities and directly or indirectly  owns  100%
interest  in these facilities.  Magma's direct ownership interest
related to Del Ranch, Leathers, Elmore and Vulcan is assigned  to
the Partnership Guarantors.

Unaudited  proforma  combined  revenue  and  net  income  of  the
Guarantors on a purchase, push down basis of accounting, for  the
nine months ended September 30, 1996, as if both acquisitions had
occurred  at the beginning of the period after giving  effect  to
certain  pro  forma adjustments related to the acquisitions  were
$123,582 and $23,259, respectively compared with revenue and  net
income  of $137,953 and $24,245, respectively for the nine months
ended September 30, 1995.

6. Debt Offering

On  June  20,  1996,  the Guarantors issued  $135,000  of  Senior
Secured Project Notes consisting of $70,000, 7.02% Senior Secured
Notes,  due May 30, 2000 and $65,000, 8.30% Senior Secured Notes,
due  May  30, 2011, with maturities of $25,850, $32,000, $22,728,
$5,500, $1,000, and $47,922, for 1997, 1998, 1999, 2000, 2001 and
thereafter, respectively.

Proceeds  from these Senior Secured Project Notes  were  used  to
repay  approximately $96,000 in existing project level  loans  of
the Guarantors, provide approximately $15,000 to fund the Capital
Expenditures Fund and provide approximately $23,000 of  the  cost
of   the  acquisition  of  Edison  Mission  Energy's  partnership
interests described above.






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,  1996,  and  the  related
statements  of  operations for the three and nine  month  periods
ended  September 30, 1996 and 1995 and cash flows  for  the  nine
months  ended  September  30, 1996  and  1995.   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 the Salton Sea  Royalty
Company  as  of December 31, 1995, and the related statements  of
operations, equity, and cash flows for the year then  ended  (not
presented herein); and in our report dated January 26,  1996,  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, 1995 is fairly stated,  in  all
material respects, in relation to the balance sheet from which it
has been derived.



DELOITTE & TOUCHE LLP

Omaha, Nebraska
October 22, 1996


                   SALTON SEA ROYALTY COMPANY
                                
                         BALANCE SHEETS
                     (Dollars in Thousands)
     -------------------------------------------------------


                                    September 30,   December 31,
                                          1996           1995
                                    --------------  ------------
                                     (unaudited)
ASSETS
Due from affiliates                      $17,214      $  25,110
Royalty stream, net                       46,715         53,744
Goodwill, net                             35,231         35,912
Prepaid expenses and other assets          1,909          2,575
                                   -------------  -------------
                                        $101,069       $117,341
                                         =======        =======


LIABILITIES AND EQUITY
Liabilities:
Accrued liabilities                     $ 11,238      $   5,948
Senior secured project note               62,409         67,882
Deferred income taxes                     13,152         15,460
                                  --------------  -------------
Total liabilities                         86,799         89,290

Equity:
Common stock                                   -              -
Additional paid-in capital                 7,440         24,541
Retained earnings                          6,830          3,510
                                   -------------  -------------
Total equity                              14,270         28,051
                                   -------------  -------------
                                        $101,069       $117,341
                                         =======        =======

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


                   SALTON SEA ROYALTY COMPANY
                                
                    STATEMENTS OF OPERATIONS
                     (Dollars in Thousands)
                           (Unaudited)
     -------------------------------------------------------


                          Three Months Ended  Nine Months Ended
                             September 30,      September 30,
                        -------------------   -------------------
                              1996     1995      1996     1995
                        -------------------   -------------------
Revenues:
Royalty income              $ 7,784   $ 7,097   $22,422   $21,164

Expenses:
Operating, general and
   administrative expenses    1,894     1,756     5,446     5,069
Amortization of royalty
   stream and goodwill        2,570     5,047     7,710     8,163
Interest expense              1,290     (568)     3,989     3,168
                          ------------------------------------------
  Total expenses              5,754     6,235    17,145    16,400
                          ------------------------------------------

Income before income taxes    2,030       862     5,277     4,764
Provision for income taxes      592      (50)     1,957     1,210
                          ------------------------------------------
Income before minority
   interest                   1,438      912     3,320     3,554
Minority interest                 -        -         -     1,092
                          ------------------------------------------
Net income                  $ 1,438     $ 912   $ 3,320   $ 2,462
                              =====    ======    ======    ======

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


                   SALTON SEA ROYALTY COMPANY
                                
                    STATEMENTS OF CASH FLOWS
                     (Dollars in Thousands)
                           (Unaudited)
     -------------------------------------------------------


                                             Nine Months Ended
                                                September 30,
                                          ----------------------
                                                1996       1995
                                          ----------------------
Cash flows from operating activities:
 Net income                                    $3,320    $2,462
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Minority interest                                -     1,092
   Amortization of royalty stream and
    goodwill                                    7,710     8,163
   Changes in assets and liabilities:
   Prepaid expenses and other assets              666       481
   Accrued liabilities and deferred 
     income taxes                               2,982     2,250
                                           ----------------------
Net cash flows from operating activities       14,678    14,448
                                           ----------------------
Net cash flows from investing activities:
Purchase of Company by CECI, net of cash            -  (38,603)
                                           ----------------------
Net cash flows from investing activities            -  (38,603)
                                           ----------------------
Net cash flows from financing activities:
 Proceeds from issuance of debt                     -  115,446
 Deferred financing costs                           -   (3,499)
 Capital contributions                              -    1,647
 Decrease (increase) in due from affiliates     7,896  (32,898)
 Payment of debt                              (5,473)  (40,446)
 Distribution to parent                      (17,101)  (16,095)
                                           ----------------------
Net cash flows from financing activities     (14,678)   24,155
                                           ----------------------
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.


                   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, 1996 and the results of operations for the three
and  nine months ended September 30, 1996 and 1995 and cash flows
for the nine months ended September 30, 1996 and 1995.

The  results  of operations for the three and nine  months  ended
September 30, 1996 and 1995 are not necessarily indicative of the
results to be expected for the full year.

2. Other Footnote Information:

Reference  is  made to the Salton Sea Funding Corporation's  most
recently   issued  annual  report  on  Form  10-K  that  included
information  necessary  or  useful to the  understanding  of  the
Guarantor's  business and financial statement presentations.   In
particular,  the Guarantor's significant accounting policies  and
practices  were  presented in Note 2 to the  Company's  financial
statements included in that report.

3.   Purchase of Magma Power Company

On  January  10, 1995, CalEnergy Company, Inc. ("CECI")  acquired
approximately  51% of the outstanding shares of common  stock  of
Magma  Power  Company (the "Magma Common Stock") through  a  cash
tender offer and completed the Magma acquisition on February  24,
1995 by acquiring approximately 49% of the outstanding shares  of
Magma  Common  Stock  not owned by CECI through  a  merger.   The
transaction was accounted for as a purchase business combination.

Unaudited proforma combined revenue and net income of the Company
on a purchase, push down basis of accounting, for the nine months
ended  September 30, 1995, as if the acquisition had occurred  at
the  beginning of the period after giving effect to  certain  pro
forma  adjustments related to the acquisition  were  $21,164  and
$2,705, respectively.


               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 Funding Corporation's
and  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,   as  defined,  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  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 bonus 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  fixed rates for the first ten years of each  contract
and thereafter at Edison's Avoided Cost of Energy.

The  fixed  energy price periods of the Partnership  Project  SO4
Agreements  extend  until  December  1998,  December  1998,   and
December  1999  for  each  of the Hoch (Del  Ranch),  Elmore  and
Leathers Partnerships, respectively. The fixed energy rates range
from  12.7 cents per kWh in 1996 to 15.6 cents per kWh in 1999.  The  fixed
energy  price  period  on  the Vulcan Partnership  SO4  Agreement
expired in February 1996.

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 initial contract capacity and contract  nameplate
are  each 10 MW.  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
Unit  1  was 5.07 cents per kWh during the nine months ended September
30,  1996.  As the Salton Sea I PPA is not an SO4 Agreement,  the
energy payments do not revert to Edison's Avoided Cost of Energy.
The  Salton  Sea  IV  project also sells  electricity  to  Edison
pursuant  to a 30-year negotiated power purchase agreement.   The
Salton  Sea  Unit  IV  contract also  provides  for  fixed  price
capacity  payments  for the life of the contract.   Approximately
56%  of the kWhs are sold under the Salton Sea Unit IV PPA  at  a
fixed energy price, which is subject to quarterly adjustments  by
reference to various inflation-related indices, through June  20,
2017 (and at SCE's Avoided Cost of Energy thereafter), while  the
remaining  44% of the Salton Sea Unit IV kWhs are sold  according
to a 10-year fixed price schedule followed by payments based on a
modified Avoided Cost of Energy for the succeeding 5 years and at
SCE's Avoided cost of Energy thereafter.  The Salton Sea Unit  IV
project was operational on May 24, 1996.


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


Results of Operations:  (continued)

The Salton Sea II and Salton Sea III Projects sell electricity to
Edison pursuant to 30-year modified SO4 Agreements.  The contract
capacities and contract nameplates are 15 MW and 20 MW for Salton
Sea  II and 47.5 MW and 49.8 MW for Salton Sea III, respectively.
The  contracts require Edison to make capacity payments, capacity
bonus  payments  and  energy payments.  The  price  for  contract
capacity  and contract capacity bonus payments is fixed  for  the
life of the modified SO4 Agreements.  The energy payments for the
first  ten  year period, which period expires April 4,  2000  for
Salton  Sea  II  and February 13, 1999 for Salton  Sea  III,  are
levelized at a time period weighted average of 10.6 cents per kWh  and
9.8 cents  per kWh for Salton Sea II and Salton Sea III, respectively.
Thereafter,  the  monthly energy payments  will  be  at  Edison's
Avoided  Cost  of  Energy.  For  Salton Sea II  only,  Edison  is
entitled  to  receive, at no cost, 5% of all energy delivered  in
excess  of 80% of contract capacity for the period April 1,  1994
through March 31, 2004.

The Salton Sea IV Project sells electricity to Edison pursuant to
a  modified  SO4  agreement which provides for contract  capacity
payments on 34 MW of capacity at two different rates based on the
respective  contract  capacities  deemed  attributable   to   the
original  Salton Sea PPA option (20 MW) and to the original  Fish
Lake  PPA  (14  MW).  The capacity payment price for  the  20  MW
portion  adjusts quarterly based upon specified indicies 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, 1996, Edison's  average
Avoided   Cost  of  Energy  was  2.3  cents  per  kWh  which   is
substantially  below the contract energy prices  earned  for  the
nine  months  ended  September 30, 1996.  Estimates  of  Edison's
future  Avoided Cost of Energy vary substantially  from  year  to
year.   The  Company cannot predict the likely level  of  Avoided
Cost  of  Energy prices under the SO4 Agreements and the modified
SO4  Agreements  at  the  expiration  of  the  scheduled  payment
periods.   The energy revenues generated by each of the  projects
operating under such Agreements could decline significantly after
the expiration of the respective scheduled payment periods.


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


Results of Operations:  (continued)

The  following  data  includes  the combined  Operating  Capacity
Factors and electricity production of Salton Sea Units I, II, III
and IV:

                         Three Months Ended   Nine Months Ended
                             September 30        September 30
                       -----------------------------------------
                              1996      1995      1996     1995
                       ------------------------------------------
--
Operating Capacity Factor      97.9%     93.8%     89.6%    86.3%
Contract Capacity (NMW)
  (weighted average)*        119.4       79.8      97.4    79.8
kWh Produced
  (in thousands)           258,000    165,400   573,900 451,400

*  Weighted  average for the commencement of  operations  at  the
Salton Sea Unit IV.

The  following data includes combined Operating Capacity  Factors
and  electricity  production of Vulcan,  Del  Ranch,  Elmore  and
Leathers:

                          Three Months Ended  Nine Months Ended
                              September 30       September 30
                       ------------------------------------------
                              1996      1995      1996     1995
                       ------------------------------------------

Operating Capacity Factor  106.4%      108.0%    106.5%     106.0%
Contract Capacity (NMW)    148.0       148.0     148.0      148.0
Produced (in thousands)  347,700     353,000 1,016,300  1,027,600

The  Salton  Sea  Guarantors' sales of electricity  increased  to
$33,413  for  the  three  months ended September  30,  1996  from
$23,724  for the same period of 1995, a 40.8% increase.  For  the
nine  month period ended September 30, 1996, sales of electricity
increased  to  $68,646 from $55,807 in 1995,  a  23.0%  increase.
These  increases  were primarily due to the addition  of  Unit  4
production  on June 1, 1996 and increased electric production  at
the other plants.

The  Partnership  Guarantors' sales of electricity  increased  to
$46,031  for  the  three  months ended September  30,  1996  from
$23,205  for the same period in 1995, a 98.4% increase.  For  the
nine  month period ended September 30, 1996, sales of electricity
increased  to  $98,186 from $59,294 in 1995,  a  65.6%  increase.
These  increases  were primarily due to the  purchase  of  Edison
Mission  Energy's 50% partnership interest in the four geothermal
operating facilities in April 1996.  This was partially offset by
a  decreased price per kWh for the Vulcan project as a result  of
the expiration of the scheduled price period.


               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  Royalty Guarantor revenue increased to $7,784 for the  three
months  ended September 30, 1996 from $7,097 for the same  period
last  year.  For the nine month period ended September 30,  1996,
revenue  increased  to  $22,422 from  $21,164  in  1995,  a  5.9%
increase.   These increases were due primarily to  higher  energy
sales  at  Del Ranch, Elmore and Leathers compared  to  the  same
periods of 1995.

The  Salton  Sea  Guarantors' operating expenses,  which  include
royalty,  operating,  and  general and  administrative  expenses,
decreased  to  $7,576, for the three months ended  September  30,
1996 from $8,055 for the same period in 1995.  For the nine month
period ended September 30, 1996, operating expenses decreased  to
$19,302 from $21,038 in 1995.  These decreases were primarily due
to  higher  plant maintenance expenditures in 1995 and continuing
work force efficiencies as a result of CECI's acquisition of  the
facilities, which were partially offset by the start  up  of  the
Salton Sea Unit IV plants operations in June 1996.

The  Partnership  Guarantors' operating expenses,  which  include
royalty,  operating,  and  general and  administrative  expenses,
increased  to  $17,016 for the three months ended  September  30,
1996 from $8,333 for the same period in 1995.  For the nine month
period ended September 30, 1996, operating expenses increased  to
$41,426 from $23,792 in 1995.  These increases were primarily due
to the Edison Mission Energy acquisition.

The  Royalty Guarantors' operating expenses increased  to  $1,894
for the three months ended September 30, 1996 from $1,756 for the
same  period in 1995, a 7.9% increase.  For the nine month period
ended  September 30, 1996, operating expenses increased to $5,446
from  $5,069 in 1995, a 7.4% 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.

The   Salton   Sea  Guarantors'  depreciation  and   amortization
increased to $3,973 for the three months ended September 30, 1996
from $1,553 for the same period of 1995, a 155.8% increase.   For
the  nine month period ended September 30, 1996, depreciation and
amortization  increased to $9,859 from  $7,953  in  1995.   These
increases were due primarily to the final push down allocation of
purchase accounting adjustments related to the first quarter 1995
acquisition of Magma.

The   Partnership   Guarantors'  depreciation  and   amortization
increased to $9,870 for the three months ended September 30, 1996
from  $8,787 for the same period in 1995, a 12.3% increase.   For
the  nine month period ended September 30, 1996, depreciation and
amortization increased to $24,159 from $14,040 in 1995,  a  72.1%
increase.   These increases were due primarily to the final  push
down allocation of purchase accounting adjustments related to the
first  quarter  1995 acquisition of Magma and the Edison  Mission
Energy Partnership Interest Acquisition.

The  Royalty Guarantors' amortization decreased to $2,570 for the
three  months ended September 30, 1996 from $5,047 for  the  same
period  of  1995,  a 49.1% decrease.  For the nine  month  period
ended  September 30, 1996, amortization decreased to $7,710  from
$8,163 in 1995.  These decreases were due primarily to the  final
push  down allocation of purchase accounting adjustments  related
to the first quarter 1995 acquisition of Magma.

               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, increased to $5,031 for the three months ended September
30,  1996  from  $3,388  for the same period  in  1995,  a  48.5%
increase.   For the nine month period ended September  30,  1996,
interest  expense,  net  of  capitalized  amounts,  decreased  to
$11,343  from $12,659 in 1995.  These changes were due  primarily
to  the capitalization of interest related to the Salton Sea Unit
IV expansion, during the construction period, the mineral reserve
project  and  the timing of current year debt payments  partially
offset  by increased indebtedness from the issuance of the senior
secured project notes in July of 1995.

The  Partnership Guarantors' interest expense, net of capitalized
amounts, increased to $2,025 for the three months ended September
30,  1996 from $853 for the same period in 1995 as the result  of
additional  indebtedness.   For  the  nine  month  period   ended
September 30, 1996, interest expense, net of capitalized amounts,
decreased  to  $2,818 from $8,248 in 1995. This increase  were  a
result of lower indebtedness for the period and capitalization of
interest to the mineral reserve project.

The  Royalty Guarantors' interest expense increased to $1,290 for
the  three months ended September 30, 1996 from ($568)  from  the
same  period in 1995.  For the nine month period ended  September
30,  1996,  interest expense increased to $3,989 from  $3,168  in
1995.   The increase was the result of an adjustment in 1995  due
to a reallocation of debt from the purchase accounting.

The  Salton Sea Guarantors are comprised of partnerships and  one
company which has a partial interest in the Salton Sea expansion.
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  increased  to
$7,702  for the three months ended September 30, 1996 from $3,885
for  the  same  period in 1995, a 98.2% increase.  For  the  nine
month  period ended September 30, 1996, the provision for  income
taxes increased to $14,414 from $8,125 in 1995, a 77.4% increase.
These  increases  were  primarily due to an  increase  in  income
before  income  taxes  resulting from the Edison  Mission  Energy
acquisition.   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 $592  for  the
three  months ended September 30, 1996 compared to ($50) for  the
same  period in 1995.  For the nine month period ended  September
30,  1996, the income tax provision was $1,957 compared to $1,210
for  the same period in 1995.  These increases were due primarily
to  increased  earnings in the current year.  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.  The increase was the result of an adjustment
in  1995  due  to  a  reallocation  of  debt  from  the  purchase
accounting.

               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 Funding Corporation's net income for  the  three
months ended September 30, 1996 was $335 and $1,358 for the  nine
month   period   ended  September  30,  1996,   which   primarily
represented  interest income and expense, net of applicable  tax,
and the Salton Sea Funding Corporation's 1% equity in earnings of
the  Guarantors. The Funding Corporation was formed on  June  20,
1995  for the sole purpose of acting as issuer of senior  secured
notes  and bonds.  Net income from June 20, 1995 (inception date)
through September 30, 1995 was $674.

The  Salton  Sea Guarantors' net income increased to $16,836  for
the three months ended September 30, 1996 compared to $10,914 for
the  same  period  of  1995.  For the  nine  month  period  ended
September  30, 1996, net income increased to $28,273 compared  to
$13,359 in 1995.

The  Partnership Guarantors' net income increased to $12,026  for
the  three months ended September 30, 1996 compared to $6,706 for
the  same  period  of  1995.  For the  nine  month  period  ended
September  30, 1996, net income increased to $22,126 compared  to
$11,691 in 1995.

The  Royalty Guarantors' net income decreased to $1,438  for  the
three  months ended September 30, 1996 compared to $912  for  the
same  period of 1995.  For the nine month period ended  September
30,  1996,  net income decreased to $3,320 compared to $2,462  in
1995.

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  Partnership  Guarantors'  also  receive  a  special
distribution.  The Royalty Guarantor receives royalties  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.

On April 17, 1996 CalEnergy Company, Inc., ("CECI") completed the
acquisition  of Edison Mission Energy's partnership interests  in
four  geothermal operating facilities in California  for  a  cash
purchase price of $70,000. The acquisition has been accounted for
as  a  purchase.   The four projects, Vulcan, Hoch  (Del  Ranch),
Leathers  and  Elmore,  are located in  the  Imperial  Valley  of
California.   CECI  operates the facilities and  sells  power  to
Southern   California  Edison  ("Edison")  under  long-term   SO4
contracts.  Prior to this transaction, CECI indirectly owned  50%
of  these facilities.  The acquisition of Edison Mission Energy's
50%  interest results in CECI owning an additional 74 net  MW  of
generating capacity.


               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)

On June 20, 1996 the Salton Sea Funding Corporation, completed  a
sale  to institutional investors of $135,000 aggregate amount  of
Senior  Secured Series D Notes and Series E Bonds.   The  Funding
Corporation Series D Notes and Series E Bonds which mature in May
2000  and  May 2011 respectively, bear an interest rate of  7.02%
and  8.30% respectively.  The proceeds of the offering were  used
to  refinance $96,584 of existing project level indebtedness,  to
fund a portion of the purchase price of the Edison Mission Energy
acquisition and for certain capital improvements at the  Imperial
Valley Project.
                 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.
                           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

                              /s/Gregory E. Abel
Date:  November 14, 1996         Gregory E. Abel
                                 Executive Vice President and
                                 Chief Accounting Officer


                              /s/John G. Sylvia
                                 John G. Sylvia
                                 Senior Vice President and
                                 Chief Financial Officer


                          EXHIBIT INDEX

Exhibit                                               Page
  No.                                                  No.

  27           Financial Data Schedule                 37