SECURITIES AND EXCHANGE COMMISSION

                     Washington, D.C. 20549

                           FORM 10-K

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

          For the fiscal year ended December 31, 1997
              Commission File No.    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 PowerGeneration, L.P.          California   33-0567411
    Fish Lake Power Company                   Delaware     33-0453364
    Vulcan Power Company                      Nevada       95-3992087
    CalEnergy  Operating Corporation          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

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

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

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

                  Yes    X                No

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

       All  common  stock  of Salton Sea Funding  Corporation  is
indirectly held by Magma Power Company.
       100  shares of Common Stock were outstanding on March  23,
1998.

      Documents incorporated by reference:     N/A


                        TABLE OF CONTENTS




PART I                                                          2
     ITEM 1.  Business                                          2
     The Projects                                               3
     Transaction Structure                                      4
          Salton Sea Projects                                   4
          Partnership Projects                                  5
          Royalty Projects                                      5
          Reliance on Single Utility Customer                   6
     Terms of the New Securities and the Old Securities         7
                  The Exchange Offer                            7
                  Structure of and Collateral for the
          Securities                                            7
          Priority of Payments                                 12
          Debt Service Reserve Fund                            12
          Optional Redemption                                  13
          Mandatory Redemption                                 13
          Distributions                                        13
          Ranking and Security for the Securities              14
          Recourse Only to the Funding Corporation and the
               Guarantors                                      14
          Incurrence of Additional Debt                        14
          Principal Covenants                                  15
          The Project Notes                                    15
          Principal Covenants                                  16
          Considerations Regarding Limitation on Remedies      16
          Uncertainties Relating to Exploration and
               Development of Geothermal Energy Resources      16
     Insurance                                                 17
     Regulatory and Environmental Matters                      17
     Employees                                                 18
     ITEM 2:  Properties                                       18
     ITEM 3:  Legal Proceedings                                18
     ITEM 4:  Submission of Matters to a Vote of Security
          Holders                                              18



PART II                                                        19
     ITEM 5:  Market for Registrant's Common Equity and
          Related Stockholder's Matters                        19
     ITEM 6:  Selected Financial Data                          19
     Salton Sea Funding Corporation                            19
     Salton Sea Guarantors                                     20
     Partnership Guarantors                                    21
     Royalty Guarantor                                         22
     ITEM 7:  Management's Discussion and Analysis of
          Financial Condition and Results
                of Operations                                  23
     Factors Affecting Results of Operations                   23
     Power Purchase Agreements                                 23
     Capacity Utilizations                                     24
     Results of Operations for the Years Ended December 31,
          1997, 1996 and 1995                                  25
          Revenues                                             25
          Operating Expenses                                   25
          Depreciation and Amortization                        25
          Interest Expense                                     26
          Income Tax Provision                                 26
          Net Income                                           26
          Capital Resources and Liquidity                      27
          Changing Prices and the Effect of Inflation          27
     ITEM 8:  Financial Statements and Supplementary Data      28
     Index to Financial Statements - Salton Sea Funding
          Corporation                                          28
     Index to Financial Statements - Salton Sea Guarantors     28
     Index to Financial Statements - Partnership Guarantors    29
     Index to Financial Statements - Salton Sea Royalty
          Company                                              29
     Item 9.  Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure               68


PART III                                                       69
     ITEM 10.  Directors and Executive Officers of the
          Registrant                                           69
     ITEM 11.  Executive Compensation                          70
     ITEM 12.  Security Ownership of Certain Beneficial
          Owners and Management                                70
          Description of Capital Stock                         70
          Principal Holders                                    70
     ITEM 13.  Certain Relationships and Related
          Transactions                                         70
                  Other Relationships and Related
          Transactions                                         70
                  Relationship of the Funding Corporation and
          the Guarantors to Magma and CalEnergy                70


PART IV   72
     ITEM 14.  Exhibits, Financial Statements Schedule and
          Reports on Form 8-K                                  72
     Signatures                                                73
     Index to Exhibits                                         88

PART 1

ITEM 1.   Business

   Salton  Sea Funding Corporation ("Funding Corporation")  is  a
special purpose Delaware corporation and an indirect wholly-owned
subsidiary  of CalEnergy Company, Inc. ("CalEnergy")  formed  for
the sole purpose of issuing securities in its individual capacity
as  principal and as agent acting on behalf of the Guarantors (as
defined  below).  The principal executive office of  the  Funding
Corporation  is  located at 302 South 36th Street,  Suite  400-A,
Omaha, Nebraska 68131 and its telephone number is (402) 231-1641.

   CalEnergy was founded in 1971 and through its subsidiaries  is
primarily engaged in the development, ownership and operation  of
environmentally   responsible   independent   power    production
facilities   worldwide   utilizing   geothermal,   natural   gas,
hydroelectric and other energy sources.  CalEnergy  owns  all  of
the  capital  stock of Magma Power Company ("Magma").   CalEnergy
has an aggregate net ownership interest of 2,961 MW of electrical
generating  capacity  in  power  plants  in  operation  or  under
construction  in the United States and overseas,  which  have  an
aggregate  net capacity of 5,109 MW (including its  interests  in
the  Salton Sea Projects and the Partnership Projects as  defined
below).   In  addition, CalEnergy is engaged in the  distribution
and  supply of electricity to approximately 1.5 million customers
primarily  in  northeast England as well as  the  generation  and
supply  of  electricity  (together with  other  related  business
activities)  throughout  England and Wales.   CalEnergy  is  also
active  in  supplying gas and has applications for  over  400,000
customers  in  those areas of England, Wales and  Scotland  where
retail  gas  competition has been introduced. As of December  31,
1997,  CalEnergy had over $7.4 billion in assets and  its  common
stock  is  publicly  traded on the New York, Pacific  and  London
Stock Exchanges under the symbol "CE".

   In  February 1995, CalEnergy completed the acquisition of  all
the  outstanding stock of Magma (the "Magma Acquisition").  Magma
had  previously  owned  or controlled substantially  all  of  the
assets  of the Salton Sea Guarantors, Partnership Guarantors  and
Salton  Sea  Royalty  Company  (collectively  the  "Guarantors"),
including the three Salton Sea Projects then in operation and 50%
partnership  interests in each of the four Partnership  Projects.
At  the  time of the Magma Acquisition, Magma's interests in  the
Guarantors generated substantially all of Magma's earnings.   The
purchase  price  for the Magma Acquisition was $958  million,  of
which  $458 million was funded by CalEnergy and $500 million  was
provided by an interim bank facility which was borrowed on a non-
recourse  basis by CalEnergy and secured by the stock  of  Magma.
The  Magma  Acquisition loan was subsequently refinanced  with  a
portion  of  the  proceeds  of  the offering  of  the  Securities
(defined  below) and other cash provided by CalEnergy and  Magma.
Since  the  Magma Acquisition, the operations of the  Salton  Sea
Projects   and   the  Partnership  Projects  acquired   in   such
acquisition  have  substantially improved, and  significant  cost
savings and efficiencies have been realized.

   On  April 17, 1996, a subsidiary of CalEnergy acquired all  of
the  stock of BN Geothermal, Inc. ("BNG"), Niguel Energy  Company
("Niguel"), San Felipe Energy Company ("San Felipe")  and  Conejo
Energy  Company ("Conejo") from Edison Mission Energy ("Mission")
for  $70 million.  Such acquired partnership companies owned  50%
partnership interests in each of the Partnership Projects.  As  a
result   of   such   acquisition   (the   "Partnership   Interest
Acquisition"),  CalEnergy obtained full operating  and  ownership
control of all of the Partnership Projects.

   Magma directly or indirectly owns all of the capital stock  of
or  partnership  interests  in the Funding  Corporation  and  the
Guarantors.    CalEnergy   Operating  Corporation   ("CEOC"),   a
subsidiary  in  which Magma owns a 99% interest and  the  Funding
Corporation  owns a 1% interest, currently operates each  of  the
Salton Sea Projects and the Partnership Projects.  Affiliates  of
Magma  control, through a variety of fee, leasehold, and  royalty
interests, rights to geothermal resources for power production in
the  Salton  Sea Known Geothermal Resource Area ("SSKGRA").   The
Funding   Corporation  believes  that  such  resources  will   be
sufficient to operate the Salton Sea Projects and the Partnership
Projects  at  contract  capacity  under  their  respective  power
purchase  agreements  through the  final  maturity  date  of  the
Securities.

   Each  of the Salton Sea Guarantors, the Partnership Guarantors
and  the Royalty Guarantor is an indirect wholly-owned subsidiary
of CalEnergy.  Salton Sea Brine Processing, L.P. ("SSBP"), Salton
Sea  Power Generation, L.P. ("SSPG") and Fish Lake Power  Company
("Fish  Lake")  (collectively, the "Salton Sea  Guarantors")  own
four   geothermal  power  plants  located  in  Imperial   Valley,
California known as Salton Sea I, Salton Sea II, Salton  Sea  III
and  Salton  Sea  IV (collectively, the "Salton  Sea  Projects").
Each  of  the  Vulcan/BN  Geothermal  Power  Company  ("Vulcan"),
Elmore,  L.P.  ("Elmore"), Leathers, L.P.  ("Leathers")  and  Del
Ranch,  L.P.  ("Del Ranch" and, collectively with Vulcan,  Elmore
and  Leathers,  the  "Partnership  Project  Companies")  owns   a
geothermal  power  plant located in Imperial  Valley,  California
known  as  the  Vulcan Project, the Elmore Project, the  Leathers
Project  and the Del Ranch Project, respectively (such  projects,
collectively,  the "Partnership Projects").   As  is  more  fully
described  below,  the other Partnership Guarantors  (as  defined
below)  collectively own or have the right to receive  cash  flow
from 100% of the equity in such Partnership Project Companies.

   Vulcan Power Company ("VPC") and BNG, collectively own 100% of
the partnership interests in Vulcan.  CEOC and Niguel, San Felipe
and Conejo, collectively own 90% partnership interests in each of
Elmore, Leathers and Del Ranch, respectively.  Magma owns all  of
the  remaining 10% interests in each of Elmore, Leathers and  Del
Ranch.   CEOC  is entitled to receive from Magma, as payment  for
certain  data  and  services  provided  by  CEOC,  all   of   the
partnership distributions Magma receives with respect to its  10%
ownership interests in each of the Elmore, Leathers and Del Ranch
Projects and Magma's special distributions equal to 4.5% of total
energy  revenues  from the Leathers Project.   BNG,  Niguel,  San
Felipe  and Conejo and their interest in the Partnership  Project
Companies     (collectively,    the    "Additional    Partnership
Guarantors"),  together  with CEOC and  VPC  and  their  original
interest  in the Partnership Project Companies (collectively  the
"Initial  Partnership Guarantors"), are collectively referred  to
as the "Partnership Guarantors".

   Salton Sea Royalty Company ("SSRC" or the "Royalty Guarantor")
received   an   assignment   of  certain   fees   and   royalties
("Royalties")   paid  by  three  Partnership  Projects,   Elmore,
Leathers  and  Del  Ranch.  In addition,  the  Royalty  Guarantor
received  an assignment of certain Royalties payable  by  certain
geothermal  power  plants located in Imperial Valley,  California
which  are  owned by an unaffiliated third party (the "East  Mesa
Project",  and  together with the Salton  Sea  Projects  and  the
Partnership Projects, the "Projects"). Such Royalties are subject
to  netting  and  reduction from time to time to reflect  various
operating costs, as reflected in the financial statements herein.

   The  principal executive offices of the Salton Sea  Guarantors
are  located  at  302  South  36th Street,  Suite  400-B,  Omaha,
Nebraska  68131.    The  principal  executive  offices   of   the
Partnership  Guarantors is 302 South 36th  Street,  Suite  400-C,
Omaha,  Nebraska  68131. The principal executive  office  of  the
Royalty  Guarantor is 302 South 36th Street, Suite 400-D,  Omaha,
Nebraska   68131.    The   Salton  Sea  Guarantors,   Partnership
Guarantors  and the Royalty Guarantor are sometimes  referred  to
collectively herein as the "Guarantors".

The Projects

   Set  forth below is a table describing certain characteristics
of  the Salton Sea Projects and the Partnership Projects, and the
Guarantors'  collective interests therein.  All  the  Salton  Sea
Projects  and  Partnership Projects are located in  the  Imperial
Valley,  California and sell power to Southern California  Edison
Company ("Edison").

                           FACILITY
                           CAPACITY
                           AND NET
PROJECT                   OWNERSHIP       DATE OF       CONTRACT     CONTRACT
                         INTEREST OF    COMMERCIAL     EXPIRATION      TYPE
                         GUARANTORS      OPERATION
                        (IN MW)(1)(2)

Salton Sea Projects

Salton Sea I                 10.0          7/1987        6/2017     Negotiated
Salton Sea II                20.0          4/1990        4/2020            SO4
Salton Sea III               49.8          2/1989        2/2019            SO4
Salton Sea IV                39.6          6/1996        5/2026     Negotiated

Subtotal                    119.4

Partnership Projects

Vulcan                       34.0          2/1986        2/2016            SO4
Elmore                       38.0          1/1989       12/2018            SO4
Leathers                     38.0          1/1990       12/2019            SO4
Del Ranch                    38.0          1/1989       12/2018            SO4

Subtotal                    148.0

Total                       267.4

(1)Facility  Capacity  does not necessarily  reflect  electric  output
   available for sale to Edison.
(2)CEOC  and  its  wholly-owned subsidiaries collectively  own  an
   aggregate 90% interest in, and CEOC is entitled to receive the additional
   10% equity  distribution payable to Magma by, each of Elmore, Leathers and
   Del Ranch. VPC and BNG collectively own Vulcan.

                     Transaction Structure

Salton Sea Projects

   The Salton Sea Guarantors collectively own the four Salton Sea
Projects   with   an   aggregate  net  generating   capacity   of
approximately  119.4  MW.  All of the Salton  Sea  Projects  have
executed long term power purchase agreements, providing  for  the
sale of capacity and energy to Edison.

   Salton  Sea II and Salton Sea III have modified SO4 Agreements
with  Edison.  These contracts provide for fixed  price  capacity
payments  for  the life of the contract, and fixed  price  energy
payments  for the first 10 years. Thereafter, the energy payments
paid  by Edison will be based on Edison's then-current, published
short-run  avoided cost of energy (the "Avoided Cost of Energy").
The  fixed  price  energy periods expire on  April  4,  2000  and
February  13,  1999  for  Salton  Sea  II  and  Salton  Sea  III,
respectively.

   Salton Sea I and Salton Sea IV have negotiated contracts  with
Edison. The Salton Sea I contract provides for a capacity payment
and  energy  payment for the life of the contract. Both  payments
are  based  upon  an initial value that is subject  to  quarterly
adjustment by reference to various inflation-related indices. The
Salton  Sea  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 IV PPA at  a  fixed  energy
price,  which is subject to quarterly adjustment by reference  to
various inflation-related indices, through June 20, 2017 (and  at
Edison's  Avoided Cost of Energy thereafter), while the remaining
44%  of  the Salton Sea 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 Edison's
Avoided Cost of Energy thereafter.

   The  Salton  Sea  Projects operated  at  a  combined  facility
capacity  factor  of 86.5% in 1995, 90.4% in 1996  and  95.6%  in
1997.

  In 1996, the Salton Sea Guarantors expanded the capacity of the
Salton  Sea  Projects through the construction of Salton  Sea  IV
adjacent  to  the  site  where Salton Sea III  is  located.  Such
construction and the installation of the pH modification  process
at  Salton Sea I and III is referred to herein as the "Salton Sea
Expansion". The pH Modification Process has been in use at Salton
Sea  II  for  over  5 years. The process lowers  the  pH  of  the
geothermal resource thereby significantly reducing the amount  of
solids in the geothermal fluid which precipitate out of solution.
This  is expected to result in significantly lower operation  and
maintenance costs.

Partnership Projects

   The Partnership Projects have an aggregate facility generating
capacity  of 148 MW. The Partnership Guarantors own 100%  of  the
Vulcan  Project  and  90% partnership interests  in  the  Elmore,
Leathers  and  Del Ranch Projects. Magma owns the  remaining  10%
interests in each of the Elmore, Leathers and Del Ranch  Projects
and  has  agreed to pay to CEOC the partnership distributions  it
receives  from such interests in exchange for certain proprietary
data  and  services  provided  by CEOC.  Magma  has  collaterally
assigned  to  CEOC,  Magma's  right to  such  payments  and  such
payments are collateral for the Securities.  The 50% interest  of
the  Partnership Projects previously owned by certain  affiliates
of Edison were acquired by a subsidiary of CalEnergy on April 17,
1996 and subsequently transferred to CEOC and VPC.

   All  of  the Partnership Projects have executed SO4 Agreements
for  the  sale  of capacity and energy to Edison which  contracts
provide  for  fixed price capacity payments for the life  of  the
contract  and  scheduled price energy payments for the  first  10
years.  Thereafter, the energy payments paid by  Edison  will  be
based  on  Edison's Avoided Cost of Energy.  The scheduled  price
energy period for the Vulcan Project expired on February 9,  1996
and will expire on December 31, 1998 for the Del Ranch and Elmore
Projects, and December 31, 1999 for the Leathers Project.

   The  Partnership  Projects operated  at  a  combined  facility
capacity  factor of 105.9% in 1995, 104.8% in 1996 and 102.2%  in
1997.

Royalty Projects

   The Royalty Guarantor has received an assignment from Magma of
certain  payments ("Royalties") received from the  Leathers,  Del
Ranch  and Elmore Projects and the East Mesa Project in  exchange
for  the provision to those projects of the rights to use certain
geothermal  resources,  as  well as the  assignment  of  a  power
purchase    agreement   and   a   settlement   related   thereto.
Substantially  all  of  the assigned Royalties  are  based  on  a
percentage  of  energy and capacity revenues  of  the  respective
projects.  Pursuant to the assignment, the Royalty  Guarantor  is
entitled  to receive the aggregate percentages of such  project's
energy  and capacity revenues as illustrated in the chart  below.
The Partnership Guarantors are also entitled to receive Royalties
from  the Partnership Projects as illustrated in the chart below.
Royalties are subject to netting and reduction from time to  time
to reflect various operating costs, as reflected in the financial
statements  herein.  All such Royalties (other than  the  various
operating  costs, as reflected in the financial  statements)  are
payable   from   revenues   which  will  constitute   Partnership
collateral.


                 ROYALTIES TO BE PAID TO    ROYALTIES TO BE PAID TO
                   ROYALTY GUARANTOR       PARTNERSHIP GUARANTORS(1)
PROJECT   FACILITY  % ENERGY   % CAPACITY   % ENERGY % CAPACITY
          CAPACITY  REVENUES    REVENUES    REVENUES   REVENUES
                                 (MW)
Del Ranch     38     23.33         1.00       5.67      3.00
Elmore        38     23.33         1.00       5.67      3.00
Leathers      38     21.50         0.00       7.50      3.00
Vulcan        34      0.00         0.00       4.17      0.00

  Total      148


(1)    CEOC  is  also entitled to receive Royalties as  described
  herein.    Such Royalties are payable from revenues  that  will
  constitute Partnership collateral.

The  East  Mesa Project royalties are paid from total electricity
revenues from a long term power sales agreement with Edison.  The
East  Mesa  Project participants have executed an agreement  with
Edison   to  terminate  the  long  term  power  sales  agreement.
Pursuant  to  a  Settlement Agreement, Magma  consented  to  such
termination.

Reliance on Single Utility Customer

   Each  of  the Projects relies on an agreement with  Edison  to
generate 100% of its operating revenues. The payments under these
agreements  have  constituted 100% of the operating  revenues  of
each Project since its inception, and are expected to continue to
do  so  for  the life of the Securities. Any material failure  of
Edison
to  fulfill its contractual obligations under the Power  Purchase
Agreements could have a material adverse effect on the ability of
the  Funding Corporation to pay principal of and interest on  the
Securities.

   The  power  purchase agreements pursuant to which all  of  the
Projects  (other  than  Salton Sea I  and  Salton  Sea  IV)  sell
electricity  to  Edison are SO4 Agreements.  The  SO4  Agreements
provide for both capacity payments and energy payments for a term
of 30 years. While the basis for the capacity payment of each SO4
Agreement  is  fixed for the entire 30-year term,  the  price  of
energy payments is fixed only for the first ten years of the term
(the  "Scheduled Price Period"). Thereafter, the required  energy
payment  converts  to Edison's Avoided Cost of Energy,  as  filed
with  the  California  Public Utility  Commission  ("CPUC").  The
Scheduled Price Period expired in 1996 for Vulcan and will expire
in  1998  for Del Ranch and Elmore;  in 1999 for Salton Sea  III,
Leathers and East Mesa and in 2000 for Salton Sea II.

   For  the  year ended December 1997 and 1996, Edison's  average
Avoided  Cost  of  Energy was 3.3 cents and 2.5  cents  per  kWh,
respectively,  which is substantially below the  contract  energy
prices earned for the year ended December 31, 1997.  Estimates of
Edison's  future  Avoided Cost of Energy vary substantially  from
year  to year. The Funding Corporation and the Guarantors  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  Price  Periods.   The   revenues
generated  by each of the Projects operating under SO4 Agreements
could  decline significantly after the expiration of the relevant
Scheduled Price Periods.

       Terms of the New Securities and the Old Securities

The Exchange Offer

   In  1996,  Funding  Corporation issued  $70,000,000  aggregate
principal  amount of the Old Series D Securities and  $65,000,000
aggregate  principal  amount  of the  Old  Series  E  Securities.
Subsequently,  the Funding Corporation exchanged (i)  $70,000,000
aggregate  principal  amount of Old Series D  Securities  for  an
equal   principal   amount  of  New  Series  D  Securities,   and
$65,000,000 aggregate principal amount of Old Series E Securities
for  an  equal amount of New Series E Securities.  In  1995,  the
Funding   Corporation   exchanged  (i)   $232,750,000   aggregate
principal  amount  of  Old  Series  A  Securities  for  an  equal
principal  amount  of New Series A Securities, (ii)  $133,000,000
aggregate  principal  amount of Old Series B  Securities  for  an
equal  principal  amount of New Series B  Securities,  and  (iii)
$109,250,000   aggregate  principal  amount  of  Old   Series   C
Securities  for  an  equal  principal  amount  of  New  Series  C
Securities.  The  Old  Series  A Securities,  the  Old  Series  B
Securities,  the  Old  Series  C Securities,  the  Old  Series  D
Securities and the Old Series E Securities are sometimes referred
to  herein  as  the  "Old  Securities",  and  the  New  Series  A
Securities, New Series B Securities, the New Series C Securities,
New Series D Securities and New Series E Securities are sometimes
referred  to herein as the "New Securities".  The exchange  offer
of New Securities for the Old Securities is sometimes referred to
herein   as  the  "Exchange  Offer".   The  New  Securities   are
obligations  of  the  Funding  Corporation  evidencing  the  same
indebtedness  as the Old Securities and will be entitled  to  the
benefits  of the Indenture, which governs both the Old Securities
and  the  New Securities. The form and terms (including principal
amount,   interest  rate,  maturity  and  ranking)  of  the   New
Securities  are  the  same  as the form  and  terms  of  the  Old
Securities,  except  that  (i)  the  New  Securities  have   been
registered  under the Securities Act and therefore  will  not  be
subject to certain restrictions on transfer applicable to the Old
Securities  and will not be entitled to registration rights,  and
(ii) the New Securities will not provide for any increase in  the
interest  rate thereon.  Capitalized terms not otherwise  defined
herein  shall  have  the meaning set forth in the  Indenture,  as
amended, between Chemical Trust Company of California and Funding
Corporation.

   The Funding Corporation received no proceeds from the exchange
pursuant to the Exchange Offers. The net proceeds received by the
Funding  Corporation from the issuance of the Old  Securities  to
the  Initial  Purchasers  in  the two separate  offerings  (after
deduction  of  certain transaction costs) was approximately  $604
million   and   was   used  for  the  following   purposes:   (a)
approximately   $253   million  to  repay  certain   non-recourse
indebtedness of CalEnergy incurred in connection with  the  Magma
Acquisition; (b) approximately $102 million to refinance existing
indebtedness  of the Salton Sea Projects; (c) approximately  $115
million  to  finance the Salton Sea Expansion, (d)  approximately
$96  million  to  refinance  all of  the  existing  project-level
indebtedness  under credit agreements of the Partnership  Project
Companies;  (e)  approximately $15 million to  fund  the  Capital
Expenditure  Fund to be used for certain capital improvements  to
the  Partnership  Projects and the Salton Sea Projects,  and  (f)
approximately $23 million to fund a portion of the purchase price
payable  by  the Initial Partnership Guarantors for the  Acquired
Partnership Companies.

   There is no existing trading market for the New Securities and
there  can  be  no assurance regarding the future development  of
such a market for the New Securities or the ability of holders of
the  New Securities to sell their New Securities or the price  at
which  such holders may be able to sell their New Securities.  If
such  a market were to develop, future trading prices will depend
on  many  factors,  including,  among  other  things,  prevailing
interest  rates, the operating results of the Funding Corporation
and  the  Guarantors, and the market for similar securities.  The
Funding  Corporation  does not intend to  apply  for  listing  or
quotation  of  the New Securities on any securities  exchange  or
stock market.

Structure of and Collateral for the Securities

   The  New  Securities  and  any  additional  securities  issued
pursuant to the Indenture (the "Securities") will be payable from
the  proceeds  of  payments  made in  respect  of  principal  and
interest  on  the Project Notes by the Guarantors to the  Funding
Corporation. The Securities are secured by the capital  stock  of
the  Funding  Corporation and guaranteed by the  Guarantors.  The
Guarantees  (which are unlimited in the case of  the  Salton  Sea
Guarantors and which are limited to Available Cash Flow,  in  the
case of the Partnership Guarantors and the Royalty Guarantor) are
secured:

(i) in  the  case of the Salton Sea Guarantee, by a senior  first
    priority  lien  on  substantially all of the  assets  of  the
    Salton  Sea  Guarantors and a pledge of the equity  interests
    in the Salton Sea Guarantors;

(ii)in  the case of the Partnership Guarantee, by a senior  first
    priority  Lien  on  substantially all of the  assets  of  the
    Partnership  Project Companies, a senior first priority  Lien
    on  the  Equity  Cash  Flows  and Royalties  of  the  Initial
    Partnership  Guarantors and a pledge  of  the  stock  and  of
    other equity interests in the Partnership Guarantors; and

(iii)     in the case of the Royalty Guarantee, by a senior first
    priority  lien on all Royalties paid to the Royalty Guarantor
    and a pledge of the capital stock of the Royalty Guarantor.

   CEOC,  VPC and the Royalty Guarantor receive various Royalties
and  Equity Cash Flows from the Partnership Project Companies and
an unaffiliated third party.  At the time of the initial offering
of  the Old Series A Securities, Old Series B Securities and  Old
Series  C  Securities, CEOC and VPC owned or  had  the  right  to
receive (among other things) equity distributions relating to 50%
of  the  Partnership Project Companies.  In connection with  such
initial  offering of the Old Series A Securities,  Old  Series  B
Securities and Old Series C Securities, CEOC, VPC and the Royalty
Guarantor  pledged all such Royalties and Equity  Cash  Flows  as
Collateral  for  their obligations under the  Project  Notes  and
Guarantees  (the "Existing Partnership Collateral").   Similarly,
in  connection  with such initial offering of the  Old  Series  A
Securities,  Old Series B Securities and Old Series C Securities,
CEOC,  VPC and the Royalty Guarantor agreed to deposit  all  such
Royalties  and  Equity  Cash  Flows  with  the  Depositary  Agent
pursuant  to  the  Depositary Agreement for purposes  of  paying,
inter  alia,  their  obligations under  the  Project  Notes  (the
"Existing Partnership Cash Flow Deposits").

   In connection with the offering of the Old Series D Securities
and  Old Series E Securities, CEOC and VPC acquired the remaining
50%  equity  interests in the Partnership Project  Companies  and
retired  existing  non-recourse debt of the  Partnership  Project
Companies.  As security for the Partnership Project Note and  the
Partnership Guarantee, the Partnership Project Companies  pledged
all  of  their  revenues  and  assets  as  Collateral  for  their
obligations   under  the  Partnership  Project   Note   and   the
Partnership  Guarantee (the "Additional Partnership  Collateral")
and  agreed  to deposit all of their revenues with the Depositary
Agent  pursuant  to  the  Depositary Agreement  for  purposes  of
paying,  inter  alia, their obligations under the  Project  Notes
(the  "Additional  Partnership Revenue Deposits").   The  Funding
Corporation believed that these changes benefit Security  holders
by  increasing the revenues available to pay the Securities, and,
by   refinancing   existing  Del  Ranch,  Elmore   and   Leathers
indebtedness,  removing  the  structural  subordination  of   the
Project  assets.   However, since the Royalties and  Equity  Cash
Flows  constituting  the Existing Partnership  Collateral  (other
than  the  East  Mesa Royalties) are payable solely  out  of  the
revenues   of  the  Partnership  Project  Companies  pledged   as
Additional  Partnership Collateral, the supplemental benefits  of
such  Existing  Partnership Collateral and  Existing  Partnership
Cash  Flow Deposits are, as a practical matter, largely  subsumed
and  included  within  the  grant of the  Additional  Partnership
Collateral   and   Additional   Partnership   Revenue   Deposits.
Accordingly, the Additional Partnership Collateral and Additional
Partnership  Revenue Deposits should be viewed as comprising  all
of   the   material  Partnership  Project  Note  and  Partnership
Guarantee.

   The  structure  has been designed to cross-collateralize  cash
flows  from each Guarantor without cross- collateralizing all  of
the Guarantor's assets. Therefore, if a Guarantor defaults on its
Credit Agreement, Project Notes or its Guarantee, without causing
a  payment default on the Securities, then the Trustee may direct
the  Collateral Agent to exercise remedies only with  respect  to
the  Collateral securing such Credit Agreement, Project Notes and
Guarantee. If, however, such default causes a payment default  on
the  Securities, then the Trustee may accelerate  the  Securities
and  direct the Collateral Agent to exercise remedies against all
such Collateral and, if different, the Collateral from the Salton
Sea Guarantors.

   The  Funding  Corporation  and the  Guarantors  are  initially
obligated to maintain a Debt Service Reserve Fund and/or  a  Debt
Service  Reserve  Fund Letter of Credit in an  aggregate  initial
amount  equal to the maximum remaining semiannual scheduled  debt
service  on  the  Securities. After January  1,  2000,  the  Debt
Service  Reserve  Fund  Required Balance  will  increase  to  the
maximum   remaining  annual  scheduled  debt   service   on   the
Securities.

  The Funding Corporation is a special purpose finance subsidiary
of  Magma. Its ability to make payments on the Securities will be
entirely  dependent  on  the  Guarantors'  performance  of  their
obligations  under  the Project Notes and the Guarantees.  As  is
common  in  non-recourse, project finance structures, the  assets
and cash flows of the Guarantors are the sole source of repayment
of   the  Project  Notes  and  the  Guarantees.  The  Salton  Sea
Guarantors conduct no other business and own no other significant
assets except those related to the ownership or operation of  the
Salton  Sea  Projects.  The  Partnership  Guarantors  conduct  no
business  other than owning their respective ownership  interests
in the Partnership Projects and providing operation, maintenance,
administrative and technical services for Magma, the  Salton  Sea
Projects and the Partnership Projects. The Royalty Guarantor  has
been  organized solely to receive Royalty payments  owed  by  the
Partnership  Projects and the East Mesa Project and  conducts  no
other  business  and owns no other assets.  In  the  event  of  a
default  by any Guarantor under a Project Note, Credit  Agreement
or Guarantee, there is no assurance that the exercise of remedies
under such Project Note, Credit Agreement or Guarantee, including
foreclosure  on  the  assets  of such  Guarantor,  would  provide
sufficient  funds  to pay such Guarantor's obligation  under  the
Project  Notes and the Guarantees. Moreover, unless such  default
causes  a  payment  default under the Indenture  (in  which  case
remedies may be exercised against the defaulting Guarantor's  and
the  Salton  Sea Guarantors' assets), remedies may  be  exercised
only  against  the  assets  of  the  defaulting  Guarantors.   No
shareholders,  partners or affiliates of the Funding  Corporation
(other  than  the  Guarantors)  and  no  directors,  officers  or
employees  of  the  Funding Corporation or  the  Guarantors  will
guarantee  or  be  in  any  way liable for  the  payment  of  the
Securities, the Project Notes or the Guarantees. In addition, the
obligations  of  the  Partnership  Guarantors  and  the   Royalty
Guarantor under the Guarantees are limited to the Available  Cash
Flows  of  such Guarantors. As a result, payment of amounts  owed
pursuant  to the Project Notes, the Guarantees and the Securities
is  dependent  upon the availability of sufficient  revenues  and
royalty  payments  from the Guarantors' businesses  or  holdings,
after  the payment of operating expenses and the satisfaction  of
certain other obligations.

  The New Securities were issued as part of two separate Exchange
Offers  which  applied  to the recapitalization  of  $610,000,000
aggregate  principal amount of the Old Securities.  On  July  21,
1995  Funding Corporation issued $475,000,000 of Salton Sea Notes
and  Bonds  Series A, B and C, the Old Series A  Securities,  Old
Series  B  Securities and Old Series C Securities.  On  June  20,
1996   Funding   Corporation  issued  additional  securities   of
$135,000,000 of Salton Sea Notes and Bonds Series D  and  E,  the
Old Series D Securities and the Old Series E Securities.  The New
Securities  are obligations of the Funding Corporation evidencing
the  same indebtedness as the Old Securities and will be entitled
to  the  benefits of the Indenture, which governs  both  the  Old
Securities  and the New Securities. The form and terms (including
principal amount, interest rate, maturity and ranking) of the New
Securities  are  the  same  as the form  and  terms  of  the  Old
Securities,  except  that  (i)  the  New  Securities  have   been
registered  under the Securities Act and therefore  will  not  be
subject to certain restrictions on transfer applicable to the Old
Securities  and will not be entitled to registration rights,  and
(ii) the New Securities will not provide for any increase in  the
interest rate thereon.

   The Securities are issued by Funding Corporation.  Payment  of
the  Securities  is guaranteed by the Partnership Guarantors  and
the Royalty Guarantor to the extent of their Available Cash Flow,
and  the  Salton Sea Guarantors.  The Interest Payment Dates  for
the Securities are May 30 and November 30.

   The  Old  Securities  were rated "Baa3" by  Moody's  Investors
Service, Inc. ("Moody's") and "BBB-" by Standard & Poor's Ratings
Group  ("S&P").   The  initial  average  life  of  the  Series  A
Securities was 2.42 years. The initial average life of the Series
B  Securities was 6.89 years.  The initial average  life  of  the
Series C Securities was 12.36 years.  The initial average life of
the Series D Securities was 2.01 years.  The initial average life
of the Series E Securities was 10.01 years.

The  $232,750,000 principal of the 6.69% Series A Securities  due
May  30,  2000  are  payable  in semiannual  installments,  which
commenced November 30, 1995, as follows:

  PAYMENT DATE           PERCENTAGE OF
                        PRINCIPAL AMOUNT
                         PAYABLE

  November 30, 1995       9.8440386681%
  May 30, 1996           10.3342642320%
  November 30, 1996      10.3342642320%
  May 30, 1997           13.8298603652%
  November 30, 1997      13.8298603652%
  May 30, 1998           10.5087003222%
  November 30, 1998      10.5087003222%
  May 30, 1999            6.4240601504%
  November 30, 1999       6.4240601504%
  May 30, 2000            7.9621911923%

The  $133,000,000 principal of the 7.37% Series B Securities  due
May   30,  2005  will  be  payable  in  semiannual  installments,
commencing May 30, 1998, as follows:

  PAYMENT DATE           PERCENTAGE OF
                        PRINCIPAL AMOUNT
                          PAYABLE

  May 30, 1998            9.7819548872%
  November 30, 1998       9.7819548872%
  May 30, 1999            1.9563909774%
  November 30, 1999       1.9563909774%
  May 30, 2000            0.3909774436%
  November 30, 2000       0.3909774436%
  May 30, 2001            8.0360902256%
  November 30, 2001       8.0360902256%
  May 30, 2002            8.5330827068%
  November 30, 2002       8.5330827068%
  May 30, 2003            5.6390977444%
  November 30, 2003       5.6390977444%
  May 30, 2004            7.5781954887%
  November 30, 2004       7.5781954887%
  May 30, 2005           16.1684210526%

The  $109,250,000 principal of the 7.84% Series C Securities  due
May   30,  2010  will  be  payable  in  semiannual  installments,
commencing May 30, 2003, as follows:

  PAYMENT DATE           PERCENTAGE OF
                        PRINCIPAL AMOUNT
                          PAYABLE

  May 30, 2003            3.3116704805%
  November 30, 2003       3.3116704805%
  May 30, 2004            1.6558352403%
  November 30, 2004       1.6558352403%
  May 30, 2005            0.8283752860%
  November 30, 2005       0.8283752860%
  May 30, 2006            9.8572082380%
  November 30, 2006       9.8572082380%
  May 30, 2007            9.8425629291%
  November 30, 2007       9.8425629291%
  May 30, 2008           10.0851258581%
  November 30, 2008      10.0851258581%
  May 30, 2009           10.0118993135%
  November 30, 2009      10.0118993135%
  May 30, 2010            8.8146453090%

The  $70,000,000 principal of the 7.02% Series D  Securities  due
May   30,  2000  will  be  payable  in  semiannual  installments,
commencing May 30, 1997, as follows:

  PAYMENT DATE           PERCENTAGE OF
                        PRINCIPAL AMOUNT
                          PAYABLE

  May 30, 1997           18.4642857143%
  November 30, 1997      18.4642857143%
  May 30, 1998           22.8571428571%
  November 30, 1998      22.8571428571%
  May 30, 1999            7.6071428571%
  November 30, 1999       7.6071428571%
  May 30, 2000            2.1428571430%

The  $65,000,000 principal of the 8.30% Series E  Securities  due
May   30,  2011  will  be  payable  in  semiannual  installments,
commencing May 30, 1999, as follows:

  PAYMENT DATE           PERCENTAGE OF
                        PRINCIPAL AMOUNT
                          PAYABLE

  May 30, 1999            9.2907692308%
  November 30, 1999       9.2907692308%
  May 30, 2000            3.0769230769%
  November 30, 2000       3.0769230769%
  May 30, 2001            0.7692307692%
  November 30, 2001       0.7692307692%
  May 30, 2002            1.2307692308%
  November 30, 2002       1.2307692308%
  May 30, 2003            2.3076923077%
  November 30, 2003       2.3076923077%
  May 30, 2004            2.5000000000%
  November 30, 2004       2.5000000000%
  May 30, 2005            2.6923076923%
  November 30, 2005       2.6923076923%
  May 30, 2006            1.9230769231%
  November 30, 2006       1.9230769231%
  May 30, 2007            1.9230769231%
  November 30, 2007       1.9230769231%
  May 30, 2008            2.6923076923%
  November 30, 2008       2.6923076923%
  May 30, 2009            2.5000000000%
  November 30, 2009       2.5000000000%
  May 30, 2010           10.3846153846%
  November 30, 2010      10.3846153846%
  May 30, 2011           17.4184615384%


Priority of Payments

   All  revenues received by the Salton Sea Guarantors  from  the
Salton  Sea  Projects, all revenues received by  the  Partnership
Project Companies from the Partnership Projects, all Equity  Cash
Flows   and   Royalties  received  by  the  Initial   Partnership
Guarantors  and  all Royalties received by the Royalty  Guarantor
shall  be  paid  into a Revenue Fund maintained by a  Depository.
Amounts  paid into the Revenue Fund shall be distributed  in  the
following order of priority: (a) to pay Operating and Maintenance
Costs  of the Guarantors; (b) to pay certain administrative costs
of  the  agents  for  the  secured parties  under  the  Financing
Documents; (c) to pay principal of, premium (if any) and interest
on the Securities and the Debt Service Reserve Bonds, if any, and
interest and certain fees payable to the Debt Service Reserve LOC
Provider; (d) to pay principal of Debt Service Reserve LOC  Loans
and  certain  related  fees and charges;  (e)  to  replenish  any
shortfall  in the Debt Service Reserve Fund; (f) to  pay  certain
breakage costs in respect of Debt Service Reserve LOC Loans,  and
indemnification  and other expenses to the Secured  Parties,  and
(g)  to  the Distribution Fund or Distribution Suspense Fund,  as
applicable.

Debt Service Reserve Fund

   A  Debt  Service Reserve Fund for the benefit of the  Security
Holders  and  the Debt Service Reserve Letter of Credit  Provider
has been established under the Depositary Agreement.  The amounts
available  to be drawn under the Debt Service Reserve  Letter  of
Credit  and  all  other amounts held in the Debt Service  Reserve
Fund shall at all times (a) on or prior to December 31, 1999,  be
required  to  equal  the remaining maximum  semiannual  scheduled
principal  and  interest  payments  on  the  Securities  and  (b)
subsequent  to  December  31, 1999,  be  required  to  equal  the
remaining   maximum  annual  scheduled  principal  and   interest
payments  on the Securities.  The Debt Service Reserve Letter  of
Credit  must be issued by a financial institution rated at  least
"A"  by  S&P  and "A2" by Moody's. Drawings on the  Debt  Service
Reserve  Letter of Credit will be available to pay  principal  of
and  interest on the Securities and interest on loans created  by
drawings on such Debt Service Reserve Letter of Credit.

Optional Redemption

   The Series E Securities are subject to optional redemption, in
whole  or in part, pro rata at par plus accrued interest  to  the
Redemption  Date  plus a premium calculated to  "make  whole"  to
comparable  U.S. Treasury securities plus 50 basis  points.   The
Series  B  Securities  and  Series C Securities  are  subject  to
optional  redemption, in whole or in part, pro rata at  par  plus
accrued interest to the Redemption Date plus a premium calculated
to  "make whole" to comparable U.S. treasury securities  plus  50
basis  points.  The Series A Securities and Series  D  Securities
are not subject to optional redemption.


Mandatory Redemption

   The  Securities are subject to mandatory redemption, pro  rata
within  each  maturity,  at  par plus  accrued  interest  to  the
Redemption Date, (a) if a Permitted Power Contract Buy-Out occurs
unless the Rating Agencies confirm the then current Rating of the
Securities;  (b) upon the acceleration of a Project  Note  in  an
amount  equal  to the principal amount of such note plus  accrued
interest;  (c)  upon the occurrence of certain  events  of  loss,
condemnation,  title  defects or similar events  related  to  the
Salton  Sea Projects or the Partnership Projects or (d) upon  the
foreclosure  by the Collateral Agent of Collateral  securing  the
Guarantor's  obligations  under the  Salton  Sea  Guarantee,  the
Partnership Guarantee or Royalty Guarantee.


Distributions

  Distributions may be made only from and to the extent of monies
on  deposit  in  the  Distribution Fund.  Such distributions  are
subject to the prior satisfaction of the following conditions:

  (a)  the  amounts  contained in the Principal  Fund  and  the
       Interest Fund shall be equal to or greater than the aggregate
       scheduled  principal and interest payments next  due  on  the
       Securities;
  (b)  no Default or Event of Default under the Indenture shall
       have occurred and be continuing;
  (c)  the  Debt Service Coverage Ratio for the preceding  four
       fiscal quarters, measured as one annual period (or, with respect
       to any proposed distribution date prior to the first anniversary
       of  the  Closing Date, using a combination of historical  and
       projected results, as provided in the Indenture), is equal to or
       greater than 1.4 to 1, if such distribution date occurs prior to
       the year 2000, and, if in or subsequent to the year 2000,  is
       equal to or greater than 1.5 to 1, as certified by an officer of
       the Funding Corporation;
  (d)  the projected Debt Service Coverage Ratio of the Securities
       for the succeeding four fiscal quarters measured as one annual
       period is equal to or greater than 1.4 to 1, if such distribution
       date occurs prior to the year 2000, and, if such distribution
       date occurs in or subsequent to the year 2000, is equal to or
       greater than 1.5 to 1, as certified by an officer of the Funding
       Corporation;
  (e)  the Debt Service Reserve Fund shall have a balance equal to
       or greater than the Debt Service Reserve Letter (or Letters) of
       Credit shall be equal to or greater than (collectively with the
       balance,  if any, in the Debt Service Reserve Fund) the  Debt
       Service Reserve Fund Required Balance;
(f)    an officer of the Funding Corporation provides a
       certificate (based on customary assumptions) that there are
       sufficient geothermal resources to operate the Salton Sea
       Projects and the Partnership Projects at contract capacity
       through the Final Maturity Date; and
  (g)  Substantial  Completion of the Salton Sea Expansion  has
       occurred on or prior to January 1, 1997; provided that, if such
       condition is not satisfied, no distributions shall be made unless
       and until (i) Substantial Completion of the Salton Sea Expansion
       occurs prior to January 1, 1998, or (ii) Series B Securities and
       Series C Securities having an aggregate principal amount of $150
       million are redeemed or (iii) the Funding Corporation and the
       Guarantors take such actions as the Rating Agencies require to
       confirm the Investment Grade Rating of the Securities; provided
       further, that this condition to distribution shall only apply
       after January 1, 1997, unless the Salton Sea Guarantors  have
       previously notified the Trustee that the Salton Sea Expansion has
       been abandoned.

Ranking and Security for the Securities

  The Securities shall be senior debt of the Funding Corporation.
Payment of the Securities is provided for by payments to be  made
by  the  Guarantors under their Project Notes, and the Securities
are  secured by a pledge to the Collateral Agent of  all  of  the
outstanding  capital  stock of the Funding  Corporation  and  the
Guarantees.

Recourse Only to the Funding Corporation and the Guarantors

  The obligations to pay principal, premium, if any, and interest
on   the   Securities  are  obligations  solely  of  the  Funding
Corporation,  secured  by a pledge of the capital  stock  of  the
Funding  Corporation  and  entitled  to  the  benefits   of   the
Guarantees.   None  of CalEnergy or Magma (nor  any  stockholder,
officer,   director  or  employee  thereof  or  of  the   Funding
Corporation, or of the Guarantors nor any affiliate thereof other
than  the Guarantors pursuant to their Guarantees) will guarantee
the  payment of the Securities or has any obligation with respect
to the payment of the Securities.


Incurrence of Additional Debt

   The  Funding Corporation shall not incur any Debt  other  than
"Permitted Debt".  "Permitted Debt" means:

  (a)   The Securities;
  (b)   Debt incurred to acquire the East Mesa Project in whole or
    in part; provided that no such Debt may be incurred unless at the
    time of such incurrence (i) no Default or Event of Default has
    occurred and is continuing and (ii) the Rating Agencies confirm
    that  the incurrence of such Debt will not result in a Rating
    Downgrade;
  (c)    Debt  incurred  to develop, construct, own,  operate  or
    acquire additional Permitted Facilities in the Imperial Valley
    ("Additional Projects"); provided that no such  debt  may  be
    incurred unless at the time of such incurrence (i) no Default or
    Event of Default has occurred and is continuing and (ii)  the
    Rating Agencies confirm that the Securities will maintain  an
    Investment Grade Rating after giving effect to such Debt;
  (d)   Debt incurred to finance the making of capital improvements
    to  the  Salton  Sea  Projects, the Partnership  Projects  or
    Additional  Projects  required to  maintain  compliance  with
    applicable law or anticipated changes therein; provided that no
    such Debt may be incurred unless at the time of such incurrence
    the  Independent  Engineer  confirms  as  reasonable  (i)   a
    certification by the Funding Corporation (containing customary
    qualifications)  that the proposed capital  improvements  are
    reasonably  expected to enable such Project  to  comply  with
    applicable  or anticipated legal requirements  and  (ii)  the
    calculations of the Funding Corporation that demonstrate, after
    giving  effect  to the incurrence of such Debt,  the  minimum
    projected  Debt Service Coverage Ratio (x) for the next  four
    consecutive fiscal quarters, commencing with the quarter in which
    such Debt is incurred, taken as one annual period, and (y) for
    each subsequent fiscal year through the Final Maturity Date, will
    not be less than 1.2 to 1;
  (e)   Debt incurred to finance the making of capital improvements
    to  the  Salton  Sea  Projects, the Partnership  Projects  or
    Additional Projects not required by applicable law so long as
    after giving effect to the incurrence of such Debt (i) no Default
    or Event of Default has occurred and is continuing, and (ii) (A)
    the  Independent  Engineer confirms  as  reasonable  (x)  the
    calculations of the Funding Corporation that demonstrate that the
    minimum projected Debt Service Coverage Ratio for the next four
    consecutive  quarters, taken as one annual period,  and  each
    subsequent fiscal year, will not be less than 1.4 to 1, and (y)
    the calculations of the Funding Corporation that demonstrate the
    average projected Debt Service Coverage Ratio for all succeeding
    fiscal years until the Final Maturity Date will not be less than
    1.7 to 1 or (B) the Rating Agencies confirm that the incurrence
    of such Debt will not result in a Rating Downgrade;
  (f)   Working Capital Debt in an aggregate amount not to exceed
    $15,000,000;
  (g)   Debt incurred under the Debt Service Reserve LOC
    Reimbursement Agreement;
  (h)   Debt incurred in connection with certain permitted interest
    rate swap arrangements;
  (i)    Debt incurred by the Funding Corporation in an aggregate
    amount  not  to  exceed $30,000,000, in connection  with  the
    development, construction, ownership, operation, maintenance or
    acquisition of Permitted Facilities;
  (j)   Subordinated Debt from Affiliates in an aggregate amount
    not to exceed $200,000,000 which shall be used to finance
    capital, operating or other costs with respect to the Projects or
    Additional Projects; and
  (k)   Debt incurred to support a Working Capital Facility.

    All  Permitted Debt incurred by the Funding Corporation shall
be loaned to the Guarantors and guaranteed by the Guarantors.

Principal Covenants

   Principal  covenants under the Indenture require  the  Funding
Corporation   to   agree,  subject  to  certain  exceptions   and
qualifications,  (a) not to exercise any remedies  or  waive  any
defaults  under  the  Credit Agreements and  the  Project  Notes,
except  as  otherwise permitted under the Indenture; (b)  not  to
incur  (i)  any Debt except Permitted Debt or (ii) any Lien  upon
any of its properties except Permitted Liens and (c) not to enter
into  any  transaction of merger or consolidation or  change  its
form of organization or its business.

The Project Notes

   The  Salton  Sea  Guarantors jointly and  severally  issued  a
Project Note in an initial principal amount of $325,000,000;  the
Partnership  Guarantors jointly and severally  issued  a  Project
Note  in  an  initial  principal amount of  $75,000,000,  and  an
additional  project  note in an amount of $135,000,000,  and  the
Royalty  Guarantor issued a Project Note in an initial  principal
amount of $75,000,000.

   The  Guarantee  and Project Notes issued  by  the  Salton  Sea
Guarantors  are senior secured Debt of the Salton Sea Guarantors.
Security for payment of the Guarantee and Project Notes issued by
the  Salton  Sea  Guarantors includes: (a) an assignment  of  all
revenues  received by the Salton Sea Guarantors from  the  Salton
Sea  Projects  which  will  be applied  in  accordance  with  the
priorities of payment established under the Depositary Agreement;
(b)  a  Lien on the geothermal property interests of each of  the
Salton  Sea  Guarantors  and  the  Salton  Sea  Projects;  (c)  a
collateral assignment of certain material contracts; (d) a pledge
of  the equity interests in the Salton Sea Guarantors; and (e)  a
Lien on the Expansion Fund and any other funds of the Salton  Sea
Guarantors on deposit under the Depositary Agreement. The  assets
described  in  clauses  (a)  through (e)  and  any  other  assets
securing the Guarantee and Project Notes issued by the Salton Sea
Guarantors at any time are collectively referred to herein as the
"Salton Sea Collateral."

   The  Guarantee  and  Project Notes issued by  the  Partnership
Guarantors are senior secured Debt of the Partnership Guarantors.
Security for payment of the Guarantee and Project Notes issued by
the  Partnership  Guarantors includes: (a) an assignment  of  all
revenues  received by the Partnership Project Companies from  the
Partnership Projects and of all available Equity Cash  Flows  and
Royalties  of  the Initial Partnership Guarantors which  will  be
applied  in accordance with the priorities of payment established
under  the Depositary Agreement; (b) a Lien on substantially  all
of  the  assets of each of the Partnership Project Companies  and
the  Partnership Projects; (c) a collateral assignment of certain
material  contracts  and payment rights;  (d)  a  pledge  of  the
capital  stock of (or other equity interests in) the  Partnership
Guarantors;  and (e) a Lien on the Capital Expenditure  Fund  and
any  other  funds of the Partnership Guarantors on deposit  under
the  Depositary Agreement.  The assets described in  clauses  (a)
through  (e) and any other assets securing the Guarantee and  the
Project  Notes issued by the Partnership Guarantors at  any  time
are   collectively   referred  to  herein  as  the   "Partnership
Collateral."

   The Guarantee and Project Note issued by the Royalty Guarantor
are  senior  secured Debt of the Royalty Guarantor. Security  for
the payment of the Guarantee and Project Note or Notes issued  by
the   Royalty  Guarantor  includes:  (a)  an  assignment  of  all
Royalties paid to the Royalty Guarantor which will be applied  in
accordance with the priorities of payment established  under  the
Depositary  Agreement;  (b) a collateral  assignment  of  certain
material  contracts;  (c) a pledge of the capital  stock  of  the
Royalty  Guarantor; and (d) a Lien on any funds  of  the  Royalty
Guarantor  on deposit under the Depositary Agreement. The  assets
described  in  clauses  (a)  through (d)  and  any  other  assets
securing  the  Guarantee and Project Note issued by  the  Royalty
Guarantor at any time are collectively referred to herein as  the
"Royalty Collateral."

Principal Covenants

   Principal  covenants under the Credit Agreements require  each
Guarantor   to   agree,   subject  to  certain   exceptions   and
qualifications, (a) not to enter into any transaction  of  merger
or  consolidation,  change  its form of organization,  liquidate,
wind-up  or  dissolve  itself; (b) not to  enter  into  non-arm's
length  transactions or agreements with Affiliates;  (c)  not  to
incur  (i) any Debt except Permitted Guarantor Debt and (ii)  any
Liens  except  for  Permitted Liens; (d) not  to  engage  in  any
business  other  than  as contemplated by the  respective  Credit
Agreement;  and  (e) not to amend, terminate or otherwise  modify
certain of the Project Documents to which they are a party except
as  permitted under the respective Credit Agreements. In addition
to  these principal covenants, in the Salton Sea Credit Agreement
and  the  Partnership Credit Agreement, the Salton Sea Guarantors
and the Partnership Guarantors have agreed (a) not to sell, lease
or  transfer  any property or assets material to the  Salton  Sea
Projects  or the Partnership Projects, as applicable,  except  in
the ordinary course of business; and (b) to maintain insurance as
is  generally carried by companies engaged in similar  businesses
and owning similar properties.

Considerations Regarding Limitation on Remedies

   A  significant portion of the proceeds of the Initial Offering
have  been distributed to CalEnergy to repay certain non-recourse
indebtedness  incurred  by  CalEnergy  in  connection  with   the
acquisition  of  Magma  (including the Guarantors).  The  Royalty
Guarantor has purchased an assignment of the Royalties from Magma
pursuant to the Magma Assignment Agreement. Magma has also agreed
to  make  certain payments to CEOC pursuant to the Magma Services
Agreement and to secure such payment obligation with a collateral
assignment  of  certain cash flows. The Guarantors have  executed
Guarantees with respect to the entire amount of Securities. Under
certain circumstances (including a proceeding under Title  11  of
the United States Code or any similar proceeding), it is possible
that a creditor of a Guarantor or Magma could make a claim, under
federal  or  state fraudulent conveyance laws, that  the  Funding
Corporation's  claims under the Credit Agreements,  the  Security
Holders'  claims  under the Guarantees, the  Royalty  Guarantor's
interest  pursuant  to the Magma Assignment Agreement  or  CEOC's
rights  under the Magma Services Agreement should be subordinated
or  not  enforced in accordance with such instruments'  terms  or
that  payments thereunder (including payments to the  Holders  of
the  Securities) should be recovered. In order to prevail on such
a   claim,  a  claimant  would  have  to  demonstrate  that   the
obligations  incurred under any Guarantor's Credit  Agreement  or
Guarantee  or  the  transfers  made under  the  Magma  Assignment
Agreement  or the Magma Services Agreement were not  incurred  in
good  faith  or that any Guarantor or Magma did not receive  fair
consideration in connection with such obligations and  transfers,
and  that any Guarantor or Magma is and was insolvent at the time
of  entering  into  the  Credit Agreement, Guarantee,  the  Magma
Assignment Agreement and/or the Magma Services Agreement or  that
it did not have and will not have sufficient capital for carrying
on  its business or was not and will not be able to pay its debts
as they mature.

Uncertainties   Relating  to  Exploration  and   Development   of
Geothermal Energy Resources

   Geothermal exploration, development and operations are subject
to uncertainties which vary among different geothermal reservoirs
and  are  similar to those typically associated with oil and  gas
exploration and development, including dry holes and uncontrolled
releases.  Because of the geological complexities  of  geothermal
reservoirs,  the  geographic  area  and  sustainable  output   of
geothermal  reservoirs  can  only  be  estimated  and  cannot  be
definitively  established. There is, accordingly, a  risk  of  an
unexpected decline in the capacity of geothermal wells and a risk
of  geothermal  reservoirs  not being  sufficient  for  sustained
generation of the electrical power capacity desired.

   In  addition,  both the cost of operations and  the  operating
performance of geothermal power plants may be adversely  affected
by a variety of operating factors. Production and injection wells
can require frequent maintenance or replacement. Corrosion caused
by  high-temperature  and  high-salinity  geothermal  fluids  may
require  the replacement or repair of certain equipment,  vessels
or  pipelines. New production and injection wells may be required
for   the   maintenance  of  current  operating  levels,  thereby
requiring substantial capital expenditures.

                               Insurance

   The Salton Sea Projects and the Partnership Projects currently
possess property, business interruption, catastrophic and general
liability insurance. Proceeds of insurance received in connection
with  the  Salton Sea Projects will be payable to the  Depositary
for  the account of the Salton Sea Guarantors and will be applied
as  required under the Financing Documents. However, proceeds  of
insurance  received  in connection with the Partnership  Projects
will  be payable to or for the account of the Partnership Project
Companies  and will not be payable to the Partnership  Guarantors
except  in  the  event  that  such  proceeds  are  paid  to   the
Partnership Guarantors as an equity distribution.  There  can  be
no  assurance that such comprehensive insurance coverage will  be
available in the future at commercially reasonable costs or terms
or  that the amounts for which the Salton Sea Guarantors and  the
Partnership  Guarantors  are or will be insured  will  cover  all
potential losses.

  Because geothermally active areas such as the area in which the
Projects  are  located are subject to frequent low-level  seismic
disturbances, and serious seismic disturbances are possible,  the
power generating plants and other facilities at the Projects  are
designed and built to withstand relatively significant levels  of
seismic  disturbance. However, there is no assurance that seismic
disturbances  of a nature and magnitude so as to  cause  material
damage  to the Projects or gathering systems or a material change
in  the  nature of the geothermal resource will not  occur,  that
insurance with respect to seismic disturbances will be maintained
by  or  on behalf of all of the Projects, that insurance proceeds
will be adequate to cover all potential losses sustained, or that
insurance will continue to be available in the future in  amounts
adequate to insure against such seismic disturbances.

              Regulatory and Environmental Matters

   The  Guarantors are subject to a number of environmental  laws
and  regulations  affecting many aspects  of  their  present  and
future  operations, including the disposal of  various  forms  of
materials resulting from geothermal reservoir production and  the
drilling  and  operation of new wells. Such laws and  regulations
generally require the Guarantors to obtain and comply with a wide
variety  of  licenses, permits and other approvals. In  addition,
regulatory compliance for the construction of new facilities is a
costly  and  time-consuming process, and  intricate  and  rapidly
changing environmental regulations may require major expenditures
for  permitting  and  create  the risk  of  expensive  delays  or
material  impairment of project value if projects cannot function
as  planned  due  to  changing regulatory requirements  or  local
opposition.  The Guarantors and the Projects also remain  subject
to  a  varied  and  complex  body  of  environmental  and  energy
regulations  that  both public officials and private  individuals
may  seek  to  enforce. There can be no assurance  that  existing
regulations will not be revised or that new regulations will  not
be  adopted  or  become  applicable to  the  Guarantors  and  the
Projects  which could have an adverse impact on their operations.
In  particular, the independent power market in the United States
is   dependent  on  the  existing  energy  regulatory  structure,
including  the  Public Utility Regulatory Policies Act  ("PURPA")
and  its  implementation by utility commissions  in  the  various
states.   The   structure  of  such  federal  and  state   energy
regulations  has  in  the past, and may in  the  future,  be  the
subject  of  various  challenges and restructuring  proposals  by
utilities and other industry participants. The implementation  of
regulatory   changes   in   response  to   such   challenges   or
restructuring proposals, or otherwise imposing more comprehensive
or  stringent requirements on the Guarantors and Projects,  which
would  result in increased compliance costs could have a material
adverse  effect on the Guarantors' and the Projects'  results  of
operations.


                           Employees

   Employees  necessary  for  the operation  of  the  Salton  Sea
Projects and the Partnership Projects are provided by CEOC, under
the operation and maintenance agreements described below.  As  of
December 31, 1997, CEOC employed approximately 171 people at  the
Salton  Sea  Projects and the Partnership Projects, collectively.
CEOC  employees  are  not  covered by any  collective  bargaining
agreement.  The Funding Corporation believes that CEOC's employee
relations are good.

   CEOC  maintains a qualified technical staff covering  a  broad
range of disciplines including geology, geophysics, geochemistry,
hydrology,    volcanology,   drilling    technology,    reservoir
engineering,   plant   engineering,   construction    management,
maintenance  services, production management and  electric  power
operation.

   Administrative services for the Salton Sea Guarantors and  the
Partnership  Project  Companies  are  provided  pursuant  to  the
administrative  services agreements described  below.   CalEnergy
employees   provide   corporate  level   managerial,   financial,
accounting, technical and other administrative services and  CEOC
employees  provide  certain accounting,  purchasing  and  payroll
services.


Item 2.  Properties

  The Funding Corporation does not separately own or lease office
space  but  has  arranged  for a separate  suite  at  CalEnergy's
offices  in Omaha, Nebraska.  (See page 4 for a schedule  of  the
Guarantors facilities.)


Item 3.  Legal Proceedings

   The  Funding Corporation is not a party to any material  legal
proceedings.


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

  Not applicable.

                            Part II


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

  Not applicable.

Item 6.  Selected Financial Data (Dollars in thousands)

Salton Sea Funding Corporation

   The  following tables set forth selected historical  financial
and  operating data of the Funding Corporation.  The data  should
be  read in conjunction with the financial statements and related
notes and other financial information appearing elsewhere in this
Form 10-K.


                          Year Ended   Year Ended     From  June  20,1995
                         December 31,  December 31, (Inception Date) through
                             1997        1996 (2)     December  31,1995 (1)

Total revenues              $40,677      $40,567             $17,577
Net income                    1,461        1,821               1,507



                              December  31,  December 31,        December 31,
                                  1997         1996(2)                1995

Total assets                     $474,289     $575,989             $522,521
Senior secured notes and bonds    448,754      538,982              452,088
Total liabilities                 464,134      567,295              515,571

(1)    Funding  Corporation was formed on June 20, 1995  for  the
  sole purpose of acting as issuer of senior notes and bonds  and
  issued $475,000 of senior secured notes and bonds.

(2)  On  June  20,  1996  Funding Corporation  issued  additional
securities of $135,000 of Salton Sea Notes and    Bonds Series  D
and E.

Salton Sea Guarantors

  The  following  tables set forth selected  historical  combined
financial  and operating data of the Salton Sea Guarantors.   The
information   contained  therein  was  extracted   from   certain
historical information of Magma Power Company and certain of  its
affiliates.   The  data  should be read in conjunction  with  the
financial  statements  and  related  notes  and  other  financial
information appearing elsewhere in this Form 10-K.


                                                               Nine Months Ended
                                     Year Ended December 31,       December 31
                                  1997   1996(1)  1995(2)  1994       1993(3)

Sales of electricity         $  106,252 $ 90,982 $ 71,605 $ 74,576  $  60,158
Total revenues                  106,425   91,123   71,605   74,998     60,158
Net income                       42,816   35,031   17,955   31,943     29,131

Total assets                    556,353  565,934  500,400  232,914    223,066
Loans payable                        --       --       --  114,308    140,000
Senior secured project note     266,208  299,840  321,500       --         --
Total liabilities               322,165  374,562  330,801  114,936    140,566

(1)    In June 1996, Salton Sea IV commenced operations.

(2)    Information as of December 31, 1995 and for the year  then
  ended  reflects  adjustments which have been made  to  the  net
  assets  of  the Salton Sea Guarantors to reflect the effect  of
  the  acquisition of Magma accounted for as a purchase  business
  combination pushed down to the Salton Sea Guarantors.

(3)    On  March 31, 1993, the Salton Sea Corporations  completed
their acquisition of Salton Sea Units I, II     and III.

Partnership Guarantors

  The  following  tables set forth selected  historical  combined
financial and operating data of the Partnership Guarantors.   The
information   contained  therein  was  extracted   from   certain
historical information of Magma Power Company and certain of  its
affiliates.   The  data  should be read in conjunction  with  the
financial  statements  and  related notes,  and  other  financial
information appearing elsewhere in this Form 10-K.

                                  Year Ended December 31,
                       1997   1996(1)   1995(2)    1994    1993
Sales of electricity$158,125 $132,212   $76,909  $70,692 $65,579
Total revenues       162,315  140,226    87,483   76,050  70,057
Net income            33,637   25,759    14,637   17,138  13,094

Total assets         736,783  742,183   602,172  180,443 178,894
Loans payable              -        -    43,766   52,340  60,119
Senior secured
  project note       143,610  182,204    62,706        -       -
Total liabilities    275,084  314,121   228,440   74,048  75,507

(1)    On  April  17,  1996  the remaining 50%  interest  of  the
  Partnership Projects was acquired from Edison
  Mission Energy.

(2)Information  as  of December 31, 1995 and for  the  year  then
  ended  reflects  adjustments which have been made  to  the  net
  assets  of the Partnership Guarantors to reflect the effect  of
  the  acquisition of Magma accounted for as a purchase  business
  combination pushed down to the Partnership Guarantors.
Royalty Guarantor

     The following tables set forth selected historical financial
and  operating  data of the Royalty Guarantor.   The  information
contained   therein   was  extracted  from   certain   historical
information  of  Magma and certain of its affiliates.   The  data
should  be read in conjunction with the financial statements  and
related notes and other financial information appearing elsewhere
in this Form 10-K.

                                  Year Ended December 31,
                      1997     1996   1995(2) 1994(3)     1993
Total revenues(1)   $32,231  $30,143  $28,383 $29,410   $26,942
Net income(1)         8,661    4,769    3,510   8,657    21,232

Total assets         86,009   91,073  117,341
Senior secured
  project note       38,934   56,936   67,882
Total liabilities    67,508   81,233   89,290

(1)The historical summaries of revenues and related expenses  for
  periods  prior  to  1995,  which were  prepared  on  the  basis
  described  in  the  financial  statements  appearing  elsewhere
  herein,  are  not intended to be complete presentation  of  the
  predecessor's revenues and expenses.

(2)Information  as  of December 31, 1995 and for  the  year  then
  ended  reflects  adjustments which have been made  to  the  net
  assets  of the Royalty Guarantor to reflect the effect  of  the
  acquisition  of  Magma  accounted for as  a  purchase  business
  combination pushed down to the Royalty Guarantor.

(3)During  1994,  the  Royalty Guarantor charged  off  is  entire
  outstanding  accrued  Junior SO4 royalty  receivable  from  GEO
  East  Mesa.  The charge amounted to $14,502 and is included  in
  operating  expenses.  Excluding the one time charge,  operating
  expenses would have been $6,251 and net income would have  been
  $23,159.

Item  7.    Management's  Discussion and  Analysis  of  Financial
Condition and Results of Operations
(Dollars in thousands)


Factors Affecting Results of Operations

   Funding  Corporation was organized for  the  sole  purpose  of
acting as issuer of senior secured notes and bonds.  On June  20,
1996  and  July 21, 1995, the Funding Corporation issued $135,000
and   $475,000   of   senior  secured  notes   and   bonds   (the
"Securities").  The Securities are payable from payments made  of
principal and interest on the 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 Royalty  Guarantor  are  limited  to
available  cash flow.  The Funding Corporation does  not  conduct
any operations apart from issuing the Securities.

   The  periodic  results of operations for  the  Guarantors  are
influenced to varying degrees by a number of factors, principally
the   level  of  revenues  received  under  the  power   purchase
agreements, project capacity utilization, the level of  operating
expenses and capital expenditures.

Power Purchase Agreements

   Each of the Projects sells electricity to Edison pursuant to a
separate  SO4 Agreement or a negotiated power purchase agreement.
Each  power purchase agreement is independent of the others,  and
performance  requirements  specified within  one  such  agreement
apply  only  to  the Project which is subject to that  agreement.
The  power purchase agreements provide for three basic  types  of
payments:  energy  payments, capacity payments  and,  in  certain
cases,  capacity  bonus  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
are significantly higher in the months of June through September.
Energy  payments, which are the majority of the revenue payments,
are  at  increasing fixed 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 Projects'
SO4  Agreements  extended  until February  1996  for  the  Vulcan
Partnership  and extend until December 1998, December  1998,  and
December  1999  for  each of the Del Ranch, Elmore  and  Leathers
Partnerships, respectively.  Excluding Vulcan, which is receiving
Edison's  Avoided Cost of Energy, the Parthership  Projects'  SO4
Agreements provide for energy rates ranging from 13.6  cents  per
kWh in 1997 to 15.6 cents per kWh in 1999.

   Salton Sea I sells electricity to Edison pursuant to a 30-year
negotiated power purchase agreement, as amended (the "Salton  Sea
I  PPA"),  which provides for capacity and energy payments.   The
energy  payment is calculated using a Base Price which is subject
to  quarterly adjustments based on a basket of indices.  The time
period  weighted average energy payment for Salton Sea I was  5.3
cents per kWh during 1997.  As the Salton Sea I PPA is not an SO4
Agreement, the energy payments do not revert to Edison's  Avoided
Cost of Energy.  The capacity payment is approximately $1,100 per
annum.

   Salton  Sea II and Salton Sea III sell electricity  to  Edison
pursuant  to  30-year modified SO4 Agreements  that  provide  for
capacity  payments, capacity bonus payments and energy  payments.
The  price  for  contract  capacity and contract  capacity  bonus
payments  is  fixed for the life of the modified SO4  Agreements.
The  energy payments for the first ten year period, which  period
expires in April 2000 and February 1999 are levelized at  a  time
period  weighted average of 10.6 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  annual  capacity and bonus payments for Salton  Sea  II  and
Salton Sea III are approximately $3,300 and $9,700, respectively.

   Salton  Sea  IV  sells  electricity to Edison  pursuant  to  a
modified  SO4  agreement  which provides  for  contract  capacity
payments on 34 MW of capacity at two different rates based on the
respective  contract  capacities  deemed  attributable   to   the
original  Salton Sea PPA option (20 MW) and to the original  Fish
Lake  PPA  (14  MW).  The capacity payment price for  the  20  MW
portion  adjusts quarterly based upon specified indices  and  the
capacity payment price for the 14 MW portion is a fixed levelized
rate.   The energy payment (for deliveries up to a rate  of  39.6
MW)  is  at a fixed price for 55.6% of the total energy delivered
by  Salton Sea IV and is based on an energy payment schedule  for
44.4%  of  the  total  energy delivered by Salton  Sea  IV.   The
contract  has  a  30  year term but Edision is  not  required  to
purchase the 20 MW of capacity and energy originally attributable
to  the  Salton  Sea I PPA option after September 30,  2017,  the
original termination date of the Salton Sea I PPA.

  For the year ended December 31, 1997 and 1996, Edison's average
Avoided  Cost  of  Energy was 3.3 cents and 2.5  cents  per  kWh,
respectively,  which is substantially below the  contract  energy
prices earned for the year ended December 31, 1997. Estimates  of
Edison's  future  Avoided Cost of Energy vary substantially  from
year  to  year.  The Company cannot predict the likely  level  of
Avoided  Cost of Energy prices under the SO4 Agreements  and  the
modified  SO4  Agreements  at  the expiration  of  the  scheduled
payment  periods.  The revenues generated by each of the projects
operating under SO4 Agreements could decline significantly  after
the expiration of the respective scheduled payment periods.

Capacity Utilizations

   For  purposes of consistency in financial presentation,  plant
capacity  factors for Vulcan, Hoch (Del Ranch), Elmore,  Leathers
plants  are based on nominal capacity amounts of 34, 38, 38,  and
38  net  MW  respectively, and for Salton Sea I, Salton  Sea  II,
Salton  Sea  III and Salton Sea IV plants, are based  on  nominal
capacity  amounts of 10, 20, 49.8 and 39.6 net MW,  respectively.
Each  plant  possesses  an  operating  margin  which  allows  for
production in excess of the amount listed above.  Utilization  of
this operating margin is based upon a variety of factors and  can
be  expected  to vary throughout the year under normal  operating
conditions.

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

                                   Years Ended December 31,
                              1997        1996        1995
Overall capacity factor        95.6%      90.4%        86.5%
 Capacity NMW (average)       119.4      103.0*        79.8
 Kwh produced (in thousands)999,400    817,400      604,300
  * Weighted average for the commencement of operations at Salton
Sea IV in 1996.

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

                                   Years Ended December 31,
                                 1997        1996        1995
 Operating capacity factor       102.2%     104.8%       105.9%
 Capacity NMW (average)          148.0      148.0        148.0
 Kwh produced (in thousands) 1,324,400  1,361,800    1,373,310


Results of Operations for the Years Ended December 31, 1997, 1996
and 1995

Revenues

     The Salton Sea Guarantors' sales of electricity increased to
$106,252  for the year ended December 31, 1997 from  $90,982  for
the  same  period  in  1996,  a 16.8% increase.  The  Salton  Sea
Guarantors'  sales of electricity increased to  $90,982  for  the
year ended December 31, 1996 from $71,605 for the same period  in
1995,  a  27.1% increase.  These increases were due primarily  to
the  addition of Salton Sea IV which commenced operations in June
1996 and increased electricity production at the other plants.

      The  Partnership Guarantors' sales of electricity increased
to  $158,125  for the year ended December 31, 1997 from  $132,212
for  the  same period in 1996, a 19.6% increase. The  Partnership
Guarantors'  sales of electricity increased to $132,212  for  the
year ended December 31, 1996 from $76,909 for the same period  in
1995,  a  71.9% increase.  These increases were due primarily  to
the acquisition of the remaining 50% interest of the Partnerships
owned   by  Edison  Mission  Energy  (the  "Partnership  Interest
Acquisition")  in  April  1996.  These increases  were  partially
offset by a decline in revenue from Vulcan which reached the  end
of  its  scheduled price period and started receiving revenue  at
avoided cost rates in February 1996.

    Interest  and  other  income for the  Partnership  Guarantors
decreased  to  $4,190 for the year ended December 31,  1997  from
$8,014 for the same period in 1996. Interest and other income for
the Partnership Guarantors decreased to $8,014 for the year ended
December 31, 1996 from $10,574 for the same period in 1995.   The
decreases were attributable to lower cash balances and  the  fact
the Partnership Guarantor is no longer recognizing management fee
income  because of the Partnership Interest Acquisition in  April
1996.

     The  Royalty Guarantor revenue increased to $32,231 for  the
year ended December 31, 1997 from $30,143 for the same period  in
1996  and $28,383 for the same period in 1995.  The increases  in
royalty revenue are the result of the higher energy sales at  the
Partnership Projects resulting in higher royalties.

Operating Expenses

     The Salton Sea Guarantors' operating expenses, which include
royalty,  operating,  and  general and  administrative  expenses,
increased  to $30,865, or 3.09 cents per kWh, for the year  ended
December  31, 1997, from $27,175 or 3.32 cents per  kWh  for  the
same  period  in 1996 and $26,096 or 4.32 cents per kWh  for  the
same  period  in  1995.   The  increases  in  expenses  were  due
primarily to the addition of Salton Sea IV which began operations
in June 1996.

       The  Partnership  Guarantors'  operating  expenses,  which
include   royalty,  operating,  and  general  and  administrative
expenses,  increased to $64,103, or 5.25 cents per kWh,  for  the
year ended December 31, 1997, from $58,945 or 5.36 cents per  kWh
for the same period in 1996 and $32,143 or 5.52 cents per kWh for
the  same  period  in  1995.  The increases  in  costs  were  due
primarily  to  the  Partnership  Interest  Acquisition  and   the
increase in royalty expense due to higher revenue.

      The  Royalty  Guarantor's operating expenses  increased  to
$7,769  for the year ended December 31, 1997 from $7,288 for  the
same  period  of  1996 and $6,822 for the same  period  of  1995.
These  increases were due to scheduled increases in  third  party
lessor  royalties  related to the increases  in  the  Partnership
Projects' sales of electricity.

Depreciation and Amortization

      The  Salton  Sea Guarantors' depreciation and  amortization
increased  to $14,689 for the year ended December 31,  1997  from
$14,272 for the year ended December 31, 1996 and $10,556 for  the
year ended December 31, 1995.  These increases were primarily due
to the commencement of operations at Salton Sea IV.  Depreciation
and  amortization for the year ended December 31, 1997  was  1.47
cents  per  kWh compared to 1.75 cents per kWh in the year  ended
December  31,  1996  and 1.75 cents per kWh  in  the  year  ended
December 31, 1995.

      The  Partnership Guarantors' depreciation and  amortization
increased  to $38,771 for the year ended December 31,  1997  from
$33,974  for  the same period in 1996 and $18,958  for  the  same
period  in  1995.  These  increases were  primarily  due  to  the
Partnership Interest Acquisition in April 1996.

   The  Royalty Guarantor's amortization was $9,794 for the  year
ended  December 31, 1997 compared with $10,280 for the year ended
December  31,  1996 and $11,239 for the year ended  December  31,
1995.    These  decreases  are  consistent  with  the   Company's
scheduled  amortization of the royalty stream and the  excess  of
cost over fair value related to the Magma acquisition.

Interest Expense

       The  Salton  Sea  Guarantors'  interest  expense,  net  of
capitalized  amounts, increased to $18,055  for  the  year  ended
December 31, 1997 from $14,645 for the same period in 1996.   The
Salton  Sea  Guarantors'  interest expense,  net  of  capitalized
amounts,  decreased  to $14,645 for the year ended  December  31,
1996 from $15,605 for the same period in 1995.  These changes are
due  primarily to the capitalization of interest related  to  the
Salton  Sea IV expansion during the construction period  and  the
mineral  extraction 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,  decreased to $4,430  for  the  year  ended
December  31, 1997 from $4,848 for the same period  in  1996  and
$8,826  for the same period in 1995.  The decreases are a  result
of  scheduled debt repayments and capitalization of  interest  on
the  mineral extraction project, partially offset by the issuance
of $135,000 of senior secured project notes in June of 1996.

     The Royalty Guarantors' interest expense decreased to $4,179
for  the  year ended December 31, 1997 from $5,246 for  the  same
period  in  1996.   This  decrease  is  due  to  scheduled   debt
repayments.   The Royalty Guarantors' interest expense  increased
to  $5,246  for the year ended December 31, 1996 from $4,757  for
the  same period in 1995.  This increase can be attributed to the
related debt being outstanding for a full year in 1996.

Income Tax Provision

      The  Salton  Sea Guarantors are substantially 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 increased
to  $21,374 for the year ended December 31, 1997 from $16,700 for
the  same period in 1996 and $11,492 for the same period in 1995.
The  increases  in the provision are a result of  the  additional
income  from  the  Partnership Interest  Acquisition  and  higher
earnings  at  each Facility.  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  decreased  to
$1,828  for the year ended December 31, 1997 from $2,560 for  the
same  period  in  1996.   The decrease in the  provision  can  be
attributed  to  a  lower  royalty stream  balance.   The  Royalty
Guarantor's income tax provision increased to $2,560 for the year
ended  December 31, 1996 from $963 for the same period  in  1995.
The increase in the provision can be attributed to an increase in
current  year earnings.  Tax obligations of the Royalty Guarantor
will be remitted to the parent company only to the extent of cash
flows available after operating expenses and debt service.

Net Income

     The Funding Corporation's net income was $1,461 for the year
ended  December  31, 1997 compared to $1,821 for the  year  ended
December  31,  1996  and  $1,507 for the  period  June  20,  1995
(inception date) to December 31, 1995, which represented interest
income  and  expense,  net of applicable  tax,  and  the  Funding
Corporation's 1% equity in earnings of the Guarantors.

      The  Salton Sea Guarantors' net income increased to $42,816
for the year ended December 31, 1997, compared to $35,031 for the
year  ended  December 31, 1996 and $17,955  for  the  year  ended
December  31, 1995, due primarily to increased earnings resulting
from the addition of Salton Sea IV.

      The Partnership Guarantors' net income increased to $33,637
for the year ended December 31, 1997, compared to $25,759 for the
year  ended  December 31, 1996 and $14,637  for  the  year  ended
December  31, 1995  due primarily to increased earnings from  the
Partnership Interest Acquisition.

      The Royalty Guarantor's net income increased to $8,661  for
the year ended December 31, 1997, compared to $4,769 for the year
ended  December  31, 1996 and $3,510 for the year ended  December
31, 1995  due primarily to increased royalty revenue.

Capital Resources and Liquidity

  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 Royalties  from
the Partnership Projects.  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.

Changing Prices and the Effect of Inflation

   Inflation  has not had a significant impact on the Guarantors'
operating  revenue and costs; energy payments for the  Guarantors
(excluding  Vulcan) will continue to be based on scheduled  rates
and  are  not adjusted for inflation through the initial ten-year
period of each power purchase agreement.

Item 8.     Financial Statements and Supplementary Data.


                 SALTON SEA FUNDING CORPORATION
                 INDEX TO FINANCIAL STATEMENTS



SALTON SEA FUNDING CORPORATION

Independent auditors' report--Deloitte & Touche LLP         30

Balance sheets as of December 31, 1997 and 1996             31

Statements of operations for the years ended
December 31, 1997, 1996 and for the period from
June 20, 1995 (inception date) through December 31, 1995    32

Statements of stockholder's equity for the years ended
December 31, 1997, 1996 and for the  period from
June 20, 1995 (inception date) through December31, 1995     33

Statements of cash flows for the years ended
December 31, 1997, 1996 and for the  period from
June 20, 1995 (inception date) through December 31, 1995    34

Notes to financial statements                               35


SALTON SEA GUARANTORS

Independent auditors' report--Deloitte & Touche LLP         37

Combined balance sheets as of December 31, 1997  and 1996   38

Combined statements of operations for the three years ended
December 31, 1997                                           39

Combined statements of Guarantors' equity for the
three years ended December 31, 1997                         40

Combined statements of cash flows for the three years ended
December 31, 1997                                           41

Notes to combined financial statements                      42

PARTNERSHIP GUARANTORS

Independent auditors' report--Deloitte & Touche LLP         46

Combined balance sheets as of December 31, 1997 and 1996    47

Combined statements of operations for the three years ended
December 31, 1997                                           48

Combined statements of Guarantors' equity for the three years
ended December 31, 1997                                     49

Combined statements of cash flows for the three years ended
December 31, 1997                                           50

Notes to combined financial statements                      51


SALTON SEA ROYALTY COMPANY

Independent auditors' report--Deloitte & Touche LLP         60

Balance sheets as of December 31, 1997 and 1996             61

Statements of operations for the three years ended
December 31,1997                                            62

Statements of equity for the three years ended
December 31, 1997                                           63

Statements of cash flows for the three years ended
December 31,1997                                            64

Notes to financial statements                               65

                 INDEPENDENT AUDITORS' REPORT


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

   We  have audited the accompanying balance sheets of Salton Sea
Funding  Corporation as of December 31, 1997  and  1996  and  the
related  statements of operations, stockholder's equity and  cash
flows for the years ended December 31, 1997 and 1996 and for  the
period  from June 20, 1995 (inception date) through December  31,
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 audits.

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

   In  our opinion, such financial statements present fairly,  in
all  material  respects,  the financial position  of  Salton  Sea
Funding  Corporation as of December 31, 1997  and  1996  and  the
results of its operations and its cash flows for the years  ended
December 31, 1997 and 1996 and for the period from June 20,  1995
(inception  date)  through December 31, 1995 in  conformity  with
generally accepted accounting principles.




DELOITTE & TOUCHE LLP
Omaha, Nebraska
February 12, 1998

                SALTON SEA FUNDING CORPORATION
                        BALANCE SHEETS
       (Dollars in Thousands, Except Per Share Amounts)




                                                            December 31,
                                                          1997       1996
ASSETS
Cash                                                   $  15,568  $  13,218
Restricted cash                                              ---     14,044
Prepaid expenses and other assets                          2,823      3,452
Secured project notes from Guarantors                    448,754    538,982
Investment  in  1% of net assets of Guarantors             7,144      6,293
                                                      ----------- -----------
                                                        $474,289   $575,989
                                                        =======     =======

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Accrued liabilities                                    $   2,782  $   3,291
Due to affiliates                                         12,598     25,022
Senior secured notes and bonds                           448,754    538,982
                                                      ----------- ----------
  Total liabilities                                      464,134    567,295

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                                          4,789      3,328
                                                      ----------- ----------
  Total stockholder's equity                              10,155      8,694
                                                      ----------- ----------
                                                        $474,289   $575,989
                                                         =======    =======


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

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

                                                            For the Period
                        For the Year      For the Year      from June 20, 1995
                           Ended             Ended      (inception date) through
                     December 31, 1997  December 31, 1996   December 31, 1995
Revenues:

Interest income            $39,823            $39,911            $17,306
Equity in earnings of
 Guarantors                    851                656                271
                           ----------        ---------        -----------
                            40,674             40,567             17,577
Expenses:

General and administrative
 expenses                      748                712                ---
Interest expense            37,443             36,761             15,022
                          ----------        ---------         ----------
Total expenses              38,191             37,473             15,022
                          ----------        ---------         ----------
Income before income taxes   2,483              3,094              2,555
Provision for income taxes   1,022              1,273              1,048
                          ----------        ---------          ---------
  Net income               $ 1,461            $ 1,821           $  1,507
                            ======             ======             ======


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


                SALTON SEA FUNDING CORPORATION
              STATEMENTS OF STOCKHOLDER'S EQUITY
            FOR THE YEARS ENDED DECEMBER 31, 1997
                  AND 1996 AND THE PERIOD FROM
            JUNE 20, 1995 (INCEPTION DATE) THROUGH
                        DECEMBER 31, 1995
                    (Dollars in Thousands)


                                                Additional
                                Common Stock      Paid-in   Retained   Total
                               Shares   Amount    Capital   Earnings Equity
                    -----------------------------------------------------
Issuance share of common stock    100  $     -    $     -   $     - $      -
Investment in 1% of net assets of
    Guarantors  at  inception       -        -      3,267         -    3,267
                                 -------------------------------------------

Balance, June 20, 1995
  (inception  date)               100        -      3,267         -    3,267
Adjustments resulting from capital
    transactions  of  Guarantors    -        -      2,176         -    2,176
Net income                          -        -          -     1,507    1,507
                             ------------------------------------------------
Balance, December 31, 1995        100        -      5,443     1,507    6,950

Adjustments resulting from capital
  transactions of Guarantors        -        -        (77)        -      (77)
Net income                          -        -          -     1,821    1,821
                              -------- --------  --------   -------- --------
Balance, December 31, 1996        100        -      5,366     3,328    8,694

Net income                          -        -          -     1,461    1,461
                              -------- --------  --------  --------  --------
Balance, December 31, 1997        100   $    -    $ 5,366   $ 4,789  $10,155
                                =====    =====      =====    =====    =====

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

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

                                                               For the Period
                                     For the      For the    From June 20, 1995
                                   Year Ended   Year Ended    (Inception Date)
                                  December 31, December 31, through December 31,
                                     1997          1996             1995
Cash flows from operating activities:
  Net income                       $   1,461     $  1,821         $  1,507
  Adjustments to reconcile net income to net
   cash flows from operating activities:
  Equity in earnings of guarantors      (851)        (656)            (271)
  Changes in assets and liabilities:
   Prepaid expenses and other assets     629         (382)          (3,070)
   Accrued liabilities                  (509)        (598)           3,889
                                       -------------------------------------
  Net cash flows from operating
   activities                            730          185            2,055
                                       -------------------------------------
Cash flows from investing activities:
 Decrease (increase) in
 restricted cash                      14,044       43,212          (57,256)
  Secured project notes of Guarantors    ---     (135,000)        (475,000)
  Principal repayments of secured project
          notes of Guarantors         90,228       48,106           22,912
                                       ------------------------------------
  Net cash flows from investing
  activities                         104,272      (43,682)        (509,344)
                                       ------------------------------------
Cash flows from financing activities:
  Proceeds from offering of senior secured
   notes and bonds                       ---      135,000          475,000
  Repayment of senior secured project
   notes and bonds                   (90,228)     (48,106)         (22,912)
  Due to affiliates                  (12,424)     (34,572)          59,594
                                     -------------------------------------
  Net cash flows from financing
   activities                       (102,652)      52,322          511,682
                                     ------------------------------------
  Net change in cash                   2,350        8,825            4,393
  Cash at the beginning of period     13,218        4,393                -
                                     ------------------------------------
  Cash at the end of period         $ 15,568     $ 13,218        $   4,393
                                    ========      =======          =======
Non-cash investing and financing activities:
  Adjustments resulting from capital
         transactions of Guarantors $   ----    $     (77)       $   2,176
                                    ========      =======          =======

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

                SALTON SEA FUNDING CORPORATION
                 NOTES TO FINANCIAL STATEMENTS
                     (Dollars in Thousands)


1. THE PURPOSE AND BUSINESS OF SALTON SEA FUNDING CORPORATION

   Salton  Sea  Funding Corporation (the "Funding  Corporation"),
which  was formed on June 20, 1995, is a special purpose Delaware
corporation  and  a  wholly-owned,  subsidiary  of  Magma   Power
Company, which in turn is wholly-owned by CalEnergy Company, Inc.
("  CalEnergy").  The Funding Corporation was organized  for  the
sole  purpose  of  acting as issuer of senior secured  notes  and
bonds.   On  June  20,  1996  and  July  21,  1995,  the  Funding
Corporation issued $135,000 and $475,000, respectively, of Senior
Secured Notes and Bonds (collectively, the "Securities").

   The  Securities are payable from the proceeds of payments made
of  principal and interest on the Secured Project Notes from  the
Guarantors to the Funding Corporation.  The Securities  are  also
guaranteed  on  a  joint  and several basis  by  the  Salton  Sea
Guarantors,  the  Partnership Guarantors and Salton  Sea  Royalty
Company (collectively 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 issuing the Securities.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Investment in Guarantors

   Since  the  Funding  Corporation has  the  ability  to  assert
significant  influence over the operations of the Guarantors,  it
accounts  for its one percent investment in the Guarantors  using
the equity method of accounting.

Restricted Cash

The  restricted cash balance primarily included commercial paper,
money  market securities and mortgage backed securities  and  was
composed  of amounts deposited in restricted accounts  which  the
Funding Corporation used to fund capital expenditures.

Income Taxes

   The Funding Corporation is included in the consolidated income
tax  returns  with its parent and affiliates.  Income  taxes  are
provided on a separate return basis, however, tax obligations  of
the  Funding Corporation will be remitted to the parent  only  to
the  extent of cash flows available after operating expenses  and
debt service.

Fair Values of Financial Instruments

   Fair  values have been estimated based on quoted market prices
for  debt  issues listed on exchanges.  Fair values of  financial
instruments  that  are not actively traded are  based  on  market
prices  of similar instruments and/or valuation techniques  using
market  assumptions.  Unless otherwise noted, the estimated  fair
value amounts do not differ significantly from recorded values.

Use of Estimates

   The  preparation  of financial statements in  conformity  with
generally  accepted accounting principles requires management  to
make  estimates and assumptions that affect the reported  amounts
of assets and liabilities and disclosure of contingent assets and
liabilities  at  the  date of the financial  statements  and  the
reported  amounts of revenues and expenses during  the  reporting
period.  Actual results could differ from those estimates.


3. SENIOR SECURED NOTES AND BONDS

The Funding Corporation's debt securities (the "Notes and Bonds")
are as follows:

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

   Principal  and  interest  payments  are  made  in  semi-annual
installments.   Principal maturities of the Senior Secured  Notes
and Bonds are as follows:

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

The  estimated fair values of the Senior Secured Notes and  Bonds
at  December  31,  1997  and  1996 were  $463,720  and  $531,807,
respectively.
                  INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

      We have audited the accompanying combined balance sheets of
the  Salton Sea Guarantors as of December 31, 1997 and 1996,  and
the related combined statements of operations, Guarantors' equity
and  cash  flows for each of the three years in the period  ended
December   31,   1997.   These  financial  statements   are   the
responsibility  of  the Salton Sea Guarantors'  management.   Our
responsibility  is  to  express an  opinion  on  these  financial
statements based on our audits.

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

      In  our opinion, such combined financial statements present
fairly, in all material respects, the financial position  of  the
Salton  Sea Guarantors as of December 31, 1997 and 1996  and  the
results  of  its operations and its cash flows for  each  of  the
three  years in the period ended December 31, 1997 in  conformity
with generally accepted accounting principles.



DELOITTE & TOUCHE LLP
Omaha, Nebraska
February 12, 1998


                     SALTON SEA GUARANTORS
                    COMBINED BALANCE SHEETS
                     (Dollars in Thousands)

                                                        December 31,
                                                       1997     1996

Accounts receivable                                 $ 15,823 $ 14,954
Prepaid expenses and other assets                     13,043   16,008
Property, plant, contracts and equipment, net        478,001  484,182
Excess  of  cost  over  fair value of
  net assets acquired, net                            49,486   50,790
                                                 ------------------------
                                                    $556,353 $565,934
                                                     =======   =======

LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                                  $     390  $    642
Accrued liabilities                                   7,826     9,989
Due to affiliates                                    47,741    64,091
Senior secured project note                         266,208   299,840
                                                 ------------------------
Total liabilities                                   322,165   374,562

Commitments and contingencies (Notes 2, 4 and 5)

Total Guarantors' equity                            234,188   191,372
                                               ------------------------
                                                   $556,353  $565,934
                                                    =======   =======



The  accompanying notes are an integral part of the combined
financial statements.

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

                                Year Ended December 31,
                                1997     1996    1995

Revenues:
Sales of electricity           $106,252  $90,982 $71,605
Interest and other income           173      141       -
                             ------------------------------
Total Revenues                  106,425   91,123  71,605
                             ------------------------------

Expenses:
Operating, general and
  administrative expenses        30,865   27,175  26,096
Depreciation and amortization    14,689   14,272  10,556
Interest expense                 23,004   24,866  24,783
Less capitalized interest        (4,949) (10,221) (9,178)
                             --------------------- ----------
Total expenses                   63,609   56,092  52,257
                             ------------------------------
Income before minority interest  42,816   35,031  19,348
Minority interest                     -        -   1,393
                             ------------------------------
Net income                      $42,816  $35,031 $17,955
                                 ======   ======  ======


The  accompanying notes are an integral part of the combined
financial statements.


                     SALTON SEA GUARANTORS
           COMBINED STATEMENTS OF GUARANTORS' EQUITY
           FOR THE THREE YEARS ENDED DECEMBER 31, 1997
                    (Dollars in Thousands)


Balance, January 1, 1995                        $ 117,978
Net income in 1995 prior to acquisition             1,393

Contributions                                      10,606
Distributions                                      (5,000)
Purchase accounting push-down adjustment, net      26,667
Net income                                         17,955
                                               ------------
Balance, December 31, 1995                        169,599

Distributions                                      (13,258)
Net income                                          35,031
                                               ------------
Balance, December 31, 1996                         191,372

Net income                                          42,816
                                               ------------
Balance, December 31, 1997                       $ 234,188
                                                  ========

The  accompanying notes are an integral part of the combined
financial statements.


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

                                                 Year Ended December 31,
                                               1997      1996       1995

Cash flows from operating activities:
Net income                                 $  42,816 $  35,031   $  17,955
Adjustments to reconcile net income to net
 cash provided by operating activities:
  Minority interest                                -         -       1,393
  Depreciation and amortization               14,689    14,272      10,556
  Changes in assets and liabilities:
   Accounts receivable                          (869)   (4,518)        169
   Prepaid expenses and other assets           2,965     4,121     (19,236)
   Accounts payable and accrued liabilities   (2,415)    5,649       4,354
                                          ----------------------------------
Net cash flows from operating activities      57,186    54,555      15,191
                                          ----------------------------------
Cash flows from investing activities:
Purchase of Guarantors by CalEnergy,
  net of cash acquired                             -         -    (171,964)
Capital expenditures                          (7,204)  (79,863)    (68,677)
Decrease in marketable securities                  -         -       4,988
Decrease in restricted cash                        -         -       3,400
                                         ------------------------------------
Net  cash flows from investing activities     (7,204)  (79,863)   (232,253)
                                         -----------------------------------
Cash flows from financing activities:
  Repayments  of senior secured project note (33,632)  ( 21,660)  (302,172)
 Loan proceeds                                     -          -    509,364
 Contributions from parent                         -          -     10,606
 Distributions to parent                           -    (13,258)    (5,000)
 Due to (from) affiliates                    (16,350)    59,772      4,718
                                         ------------------------------------
Net cash flows from financing activities     (49,982)    24,854    217,516
                                         ------------------------------------
Net change in cash                                 -       (454)       454
Cash at beginning of period                        -        454          -
                                         ------------------------------------
Cash  at end of period                     $       -  $       -   $    454
                                           =========    =======      ======

The  accompanying notes are an integral part of the combined
financial statements.

                     SALTON SEA GUARANTORS
            NOTES TO COMBINED FINANCIAL STATEMENTS
                     (Dollars in Thousands)


1. ORGANIZATION AND OPERATIONS

 Salton Sea Guarantors (the "Guarantors") (not a legal entity) is
comprised  of  100% interests in three geothermal electric  power
generating  plants (Salton Sea I, II and III) and a fourth  plant
(Salton  Sea  IV  or  the  Salton  Sea  Expansion)  which  became
operational   in  June  1996  (collectively,  the   "Salton   Sea
Projects").   All four plants are located in the Imperial  Valley
of  California.   The  Salton Sea Projects guarantee  loans  from
Salton  Sea  Funding  Corporation  ("Funding  Corporation"),   an
indirect  wholly-owned  subsidiary  of  CalEnergy  Company,  Inc.
("CalEnergy").

  The  financial  statements consist of the  combination  of  (1)
Salton   Sea   Brine  Processing,  L.P.,  a  California   limited
partnership  between  Magma Power Company  ("Magma"),  as  a  99%
limited  partner  and  Salton  Sea  Power  Company  ("SSPC"),   a
wholly-owned  subsidiary of Magma, as a 1% general  partner,  (2)
Salton   Sea   Power  Generation,  L.P.,  a  California   limited
partnership between Salton Sea Brine Processing, L.P., as  a  99%
limited  partner, and Salton Sea Power Company, as a  1%  general
partner and (3) assets and liabilities attributable to Salton Sea
IV  which  are held 59% by Salton Sea Power Generation, L.P.  and
41%  by  Fish Lake Power Company ("FLPC").  Effective in June  of
1995,  1% interests in SSPC and FLPC were transferred to  Funding
Corporation.   All  of  the  entities  in  the  combination   are
affiliates of Magma and indirect subsidiaries of CalEnergy.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

  The  accompanying  financial statements  present  the  combined
accounts  of  the  Salton  Sea  Projects  described  above.   All
significant  intercompany transactions  and  accounts  have  been
eliminated.

  The  financial statements reflect the acquisition of Magma  and
the resulting push down to the Guarantors of the accounting as  a
purchase business combination.

Revenue Recognition

   The   Guarantors  recognize  revenues  and  related   accounts
receivable  with respect to their four operating facilities  from
sales  of  electricity  to  Southern  California  Edison  Company
("Edison") on an accrual basis.   Edison is the sole customer  of
the Guarantors.

  Salton  Sea I sells electricity to Edison pursuant to a 30-year
negotiated power purchase agreement, as amended (the "Salton  Sea
I  PPA"),  which provides for capacity and energy payments.   The
energy  payment is calculated using a Base Price which is subject
to  quarterly adjustments based on a basket of indices.  The time
period  weighted average energy payment for Salton Sea I was  5.3
cents per kWh during 1997.  As the Salton Sea I PPA is not an SO4
Agreement, the energy payments do not revert to Edison's  Avoided
Cost of Energy.  The capacity payment is approximately $1,100 per
annum.

  Salton  Sea  II and Salton Sea III sell electricity  to  Edison
pursuant  to  30-year modified SO4 Agreements  that  provide  for
capacity  payments, capacity bonus payments and energy  payments.
The  price  for  contract  capacity and contract  capacity  bonus
payments  is  fixed for the life of the modified SO4  Agreements.
The  energy payments for the first ten year period, which  period
expires in April 2000 and February 1999 are levelized at  a  time
period  weighted average of 10.6 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 Edison's  Avoided
Cost  of  Energy.  For Salton Sea II only, Edison is entitled  to
receive, at no cost, 5% of all energy delivered in excess of  80%
of  contract  capacity through September 30,  2004.   The  annual
capacity and bonus payments for Salton Sea II and Salton Sea  III
are approximately $3,300 and $9,700, respectively.

 Salton Sea IV sells electricity to Edison pursuant to a modified
SO4 agreement which provides for contract capacity payments on 34
MW  of  capacity  at two different rates based on the  respective
contract  capacities deemed attributable to the  original  Salton
Sea PPA option (20 MW) and to the original Fish Lake PPA (14 MW).
The  capacity  payment  price  for  the  20  MW  portion  adjusts
quarterly  based upon specified indices and the capacity  payment
price  for  the  14  MW portion is a fixed levelized  rate.   The
energy payment (for deliveries up to a rate of 39.6 MW) is  at  a
fixed price for 55.6% of the total energy delivered by Salton Sea
IV  and  is based on an energy payment schedule for 44.4% of  the
total energy delivered by Salton Sea IV.  The contract has a  30-
year  term but Edison is not required to purchase the  20  MW  of
capacity and energy originally attributable to the Salton  Sea  I
PPA  option  after  September 30, 2017, the original  termination
date of the Salton Sea I PPA.

  The  Guarantors  earn energy payments based on  kilowatt  hours
("kWhs") of energy provided to Edison. During the first 10 years,
the Guarantors earn payments for energy as scheduled in their SO4
Agreements.  After  the  10-year  scheduled  payment  period  has
expired (in 1999 for Salton Sea III and 2000 for Salton Sea  II),
the  energy  payment  per kWh throughout  the  remainder  of  the
contract period will be at Edison's Avoided Cost of Energy.   For
the  year  ended  December 31, 1997 and  1996,  Edison's  average
Avoided  Cost  of  Energy was 3.3 cents and 2.5  cents  per  kWh,
respectively,  which is substantially below the  contract  energy
prices earned in 1997.  Estimates of Edison's future Avoided Cost
of  Energy  vary substantially from year to year.  The Guarantors
cannot  predict the likely level of Avoided Cost of Energy prices
under  the  SO4  Agreements at the expiration  of  the  scheduled
payment  periods.  The revenues generated by each  of  the  units
operating under SO4 Agreements could decline significantly  after
the expiration of the relevant scheduled payment periods.

Property, Plant, Contracts and Equipment

  Property,  plant, contracts and equipment are carried  at  cost
less  accumulated depreciation.  The Guarantors follow  the  full
cost  method of accounting for costs incurred in connection  with
the  exploration  and development of geothermal  resources.   The
Guarantors  provide  depreciation and amortization  of  property,
plants,  contracts and equipment upon the commencement of revenue
production over the estimated useful life of the assets.

  Depreciation of the operating power plant costs, net of salvage
value, is computed on the straight line method over the estimated
useful   lives,  between  10  and  30  years.   Depreciation   of
furniture, fixtures and equipment, which are recorded at cost, is
computed  on  the straight line method over the estimated  useful
lives of the related assets, which range from three to ten years.

   Power sale agreements have been assigned values separately for
each  of (1) the remaining portion of the scheduled price periods
of  the  power sales agreements and (2) the 20 year avoided  cost
periods  of  the  power sales agreements and are being  amortized
separately over such periods using the straight line method;  and
(3)  a  163  net MW BRPU Award for which the related plants  will
either be constructed or the contract rights will be bought  out;
amortization  of such values has been deferred until  the  plants
have  been  constructed and production commences  or  the  buyout
proceeds have been applied against such values.

   The  Salton  Sea reservoir contains commercial  quantities  of
extractable minerals.  The carrying value of the mineral reserves
will be amortized upon commencement of commercial production.

Excess of Cost over Fair Value

   Total  acquisition costs in excess of the fair values assigned
to  the  net assets acquired are amortized over a 40 year  period
using  the straight line method.  At December 31, 1997 and  1996,
accumulated  amortization of the excess of cost over  fair  value
was $3,785 and $2,481, respectively.

Income Taxes

   The  Guarantors  are  comprised substantially  of  partnership
interests.  The income or loss of each partnership for income tax
purposes,  along  with  any  associated  tax  credits,   is   the
responsibility  of  the  individual  partners.   Accordingly,  no
recognition  has been given to federal or state income  taxes  in
the accompanying combined financial statements.

Statements of Cash Flows

     For purposes of the statements of cash flows, the Guarantors
consider only demand deposits at banks to be cash.  Cash paid for
interest during the years ended December 31, 1997, 1996 and  1995
was $21,591, $23,301 and $4,716, respectively.

Fair Values of Financial Instruments

   Fair  values  of financial instruments that are  not  actively
traded  are based on market prices of similar instruments  and/or
valuation  techniques using market assumptions.  Unless otherwise
noted,   the   estimated  fair  value  amounts  do   not   differ
significantly from recorded values.

Impairment of Long-Lived Assets

    The   Guarantors   review  long-lived  assets   and   certain
identifiable  intangibles  for  impairments  whenever  events  or
changes in circumstances indicate that the carrying amount of  an
asset  may  not  be  recoverable.  An impairment  loss  would  be
recognized  wherever evidence exists that the carrying  value  is
not recoverable.

Use of Estimates

   The  preparation  of financial statements in  conformity  with
generally  accepted accounting principles requires management  to
make  estimates and assumptions that affect the reported  amounts
of assets and liabilities and disclosure of contingent assets and
liabilities  at  the  date of the financial  statements  and  the
reported  amounts of revenues and expenses during  the  reporting
period.  Actual results could differ from those estimates.


3.  PROPERTY, PLANT, CONTRACTS AND EQUIPMENT

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

                                       December 31,
                                        1997     1996
                                        -------------

Plant and equipment                   $330,306  $329,458
Power sale agreements                   64,609    64,609
Mineral extraction                      71,780    66,831
Exploration and development costs       43,627    42,220
                                   -----------------------
                                       510,322   503,118
Less accumulated depreciation
  and amortization                    (32,321)   (18,936)
                                   -----------------------
                                      $478,001  $484,182
                                      =======    =======


4. SENIOR SECURED PROJECT NOTE

   The  Guarantors  have  a project note payable  to  Salton  Sea
Funding  Corporation with interest rates ranging  from  6.69%  to
7.84%.   They  have also guaranteed, along with other guarantors,
the  debt  of  Salton Sea Funding Corporation, which amounted  to
$448,754   at  December  31,  1997.   The  guarantee  issued   is
collateralized by a lien on substantially all the assets of and a
pledge  of the equity interests in the Guarantors.  The structure
has  been  designed to cross collateralize cash flows  from  each
guarantor  without cross collateralizing all of  the  guarantors'
assets.

   Principal maturities of the senior secured project note are as
follows:

               1998             $ 39,450
               1999               16,076
               2000                9,737
               2001               16,944
               2002               19,238
               Thereafter        164,763
                            ------------
                                $266,208
                                 =======
   The estimated fair values of the senior secured projects notes
at  December  31,  1997  and  1996 were  $275,079  and  $295,849,
respectively.


5.  RELATED PARTY TRANSACTIONS

  The Guarantors have entered into the following agreements:

      Easement  Grant  Deed and Agreement Regarding  Rights  for
  Geothermal  Development  dated  April  1,  1993,  whereby   the
  Guarantors acquired from Magma Land I, a wholly-owned subsidiary
  of Magma, rights to extract geothermal brine from the geothermal
  lease  rights property which is necessary to operate the Salton
  Sea  Power Generation, L.P. facilities in return for 5% of  all
  electricity  revenues received by the Guarantors.   The  amount
  expensed for the years ended December 31, 1997, 1996 and 1995 was
  $4,944, $4,215 and $3,579, respectively.

      Administrative Services Agreement dated April 1, 1993 with
 Magma,  whereby Magma will provide to the Guarantors,  excluding
 Salton  Sea  IV,  administrative and management services.   Fees
 payable to Magma amount to 3% of total electricity revenues. The
 amount expensed for the years ended December 31, 1997, 1996  and
 1995 was $2,307, $2,202 and $2,153, respectively.

      Operating  and Maintenance Agreement dated April  1,  1993
  with  CalEnergy  Operating Corporation  ("CEOC"),  whereby  the
  Guarantors retain CEOC to operate the Salton Sea facilities for a
  period  of  32 years.  Payment is made to CEOC in the  form  of
  reimbursements of expenses incurred.  During 1997, 1996 and 1995,
  the Guarantors reimbursed CEOC for expenses of $7,467, $9,854 and
  $6,939, respectively.

                 INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

  We have audited the accompanying combined balance sheets of the
Partnership Guarantors as of December 31, 1997 and 1996, and  the
related combined statements of operations, Guarantors' equity and
cash  flows  for  each  of the three years in  the  period  ended
December   31,   1997.   These  financial  statements   are   the
responsibility of the Guarantors' management.  Our responsibility
is  to express an opinion on these financial statements based  on
our audits.

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

   In  our  opinion,  such combined financial statements  present
fairly, in all material respects, the financial position  of  the
Partnership Guarantors as of December 31, 1997 and 1996  and  the
results  of  its operations and its cash flows for  each  of  the
three  years in the period ended December 31, 1997 in  conformity
with generally accepted accounting principles.




DELOITTE & TOUCHE LLP
Omaha, Nebraska
February 12, 1998


                    PARTNERSHIP GUARANTORS
                    COMBINED BALANCE SHEETS
                     (Dollars in Thousands)


                                              December 31,
                                            1997       1996
ASSETS
Accounts receivable                      $  23,481 $  22,766
Prepaid expenses and other assets           13,121    19,083
Due from affiliates                        124,311   129,278
Property, plant, contracts and
   equipment, net                          370,666   364,849
Management fee                              70,082    67,521
Excess of fair value over net assets
   acquired, net                           135,122   138,686
                                       ----------------------
                                          $736,783  $742,183
                                           =======   =======
LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                       $    1,338 $      663
Accrued liabilities                         23,285    22,977
Senior secured project note                143,610   182,204
Deferred income taxes                      106,851   108,277
                                       ----------------------
Total liabilities                          275,084   314,121

Commitments and contingencies (Notes 2, 5 and 6)

Guarantors' equity:
Common stock                                     3         3
Additional paid-in capital                 387,663   387,663
Retained earnings                           74,033    40,396
                                       ----------------------
Total Guarantors' equity                   461,699   428,062
                                       ----------------------
                                          $736,783  $742,183
                                           =======   =======


The  accompanying notes are an integral part of the combined
financial statements.

                    PARTNERSHIP GUARANTORS
               COMBINED STATEMENTS OF OPERATIONS
                    (Dollars in Thousands)


                                   Year Ended December 31,
                                  1997      1996     1995

Revenues:
Sales of electricity             $158,125 $132,212  $76,909
Interest and other income           4,190    8,014   10,574
                              --------------------------------
Total revenues                    162,315  140,226   87,483

Costs and expenses:
Operating, general and
  administrative costs             64,103   58,945   32,143
Depreciation and amortization      38,771   33,974   18,958
Interest expense                   13,753   13,697   16,726
Less capitalized interest          (9,323)  (8,849)  (7,900)
                              --------------------------------
Total expenses                    107,304   97,767   59,927
                              --------------------------------
Income before income taxes         55,011   42,459   27,556
Provision for income taxes         21,374   16,700   11,492
                              --------------------------------
Income before minority interest    33,637   25,759   16,064
Minority interest                       -        -    1,427
                              --------------------------------
Net income                       $ 33,637 $ 25,759 $ 14,637
                                  =======   ======   ======


The  accompanying notes are an integral part of the combined
financial statements.

                    PARTNERSHIP GUARANTORS
           COMBINED STATEMENTS OF GUARANTORS' EQUITY
           FOR THE THREE YEARS ENDED DECEMBER 31, 1997
                    (Dollars in Thousands)




                                            Additional
                              Common Stock   Paid-in    Retained   Total
                             Shares  Amount   Capital   Earnings   Equity
                  --------------------------------------------------------
Balance, January 1, 1995          3  $    3  $106,392   $      -  $106,395
Net income in 1995 prior
   to acquisition                 -       -         -      1,427     1,427

Purchase accounting push-down
  adjustment, net                 -       -    68,617     (1,427)   67,190
Distributions                     -       -   (13,860)         -   (13,860)
Contributions                     -       -   197,943          -   197,943
Net income                        -       -         -     14,637    14,637
                       ----------------------------------------------------
Balance, December 31, 1995        3       3   359,092     14,637   373,732

Distributions                     -       -   (42,429)         -   (42,429)
Contribution of partnership
   interest                       -       -    71,000          -    71,000
Net income                        -       -         -     25,759    25,759
                       ----------------------------------------------------
Balance, December 31, 1996        3       3   387,663     40,396   428,062

Net income                        -       -         -     33,637    33,637
                        ---------------------------------------------------
Balance, December 31, 1997        3     $ 3  $387,663    $74,033  $461,699
                                ===== ======  =======     ======   =======


The accompanying notes are an integral part of the combined
financial statements.

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


                                                     Year Ended December 31,
                                                     1997     1996     1995

Cash flows from operating activities:
 Net income                                       $ 33,637$ 25,759  $ 14,637
 Adjustments to reconcile net income to net
 cash provided by operating activities:
 Minority interest                                       -        -    1,427
 Depreciation and amortization                      38,771   33,974   18,958
 Deferred income taxes                              (1,426)     321    1,011
 Changes in assets and liabilities:
  Accounts receivable                                 (715)   3,552     (993)
  Prepaid expenses and other assets                  5,962     (615)  (5,779)
  Accounts payable and accrued liabilities             983    3,278   12,047
                                              --------------------------------
Net cash flows from operating activities            77,212   66,269   41,308
                                              --------------------------------
Cash flows from investing activities:
Capital expenditures                               (39,556) (18,483)  (4,066)
Purchase of Guarantors by CalEnergy,
 net of cash acquired                                    -        - (197,810)
Decrease in marketable securities                        -        -    7,457
Decrease (increase) in restricted cash                   -   23,085   (1,206)
Management fee                                      (4,029)  (4,736) (30,485)
                                              --------------------------------
Net cash flows from investing activities           (43,585)    (134)(226,110)
                                              --------------------------------
Cash flows from financing activities:
Loan repayments                                    (38,594)(107,560)(225,479)
Loan proceeds                                            -  135,000  288,185
Contributions from parent                                -        -  197,943
Distributions to parent                                  -  (42,429) (13,860)
Decrease (increase) in amounts due from affiliates   4,967  (62,292) (50,841)
                                               --------------------------------
Net cash flows from financing activities           (33,627) (77,281) 195,948
                                               --------------------------------
Net increase (decrease) in cash                          -  (11,146)  11,146
Cash at beginning of period                              -   11,146        -
                                               --------------------------------
Cash at the end of period                        $       - $      - $ 11,146
                                                  ========  ======== =======

During 1996, CalEnergy Company, Inc. contributed $71,000 of net
assets acquired from Edison Mission Energy, of which $12,956 was
cash, to the Partnership Guarantors (see Note 3).

The accompanying notes are an integral part of these combined
financial statements.
                    PARTNERSHIP GUARANTORS
            NOTES TO COMBINED FINANCIAL STATEMENTS
                     (Dollars in Thousands)


1. ORGANIZATION AND OPERATIONS

      Partnership  Guarantors  (the "Guarantors")  (not  a  legal
entity)  consists  of  the combination of  Vulcan  Power  Company
("VPC")  and CalEnergy Operating Corporation ("CEOC"),  both  99%
owned by Magma Power Company ("Magma") and 1% owned by Salton Sea
Funding  Corporation  (the  "Funding  Corporation").   VPC's  and
CEOC's  principal  assets are interests in  certain  partnerships
which are engaged in the operation of geothermal power plants  in
the Imperial Valley of California.  The Guarantors will serve  to
guarantee loans to such partnerships from Funding Corporation, an
indirect  wholly-owned  subsidiary  of  CalEnergy  Company,  Inc.
("CalEnergy").   VPC and its subsidiary hold a 100%  interest  in
Vulcan/BN Geothermal Power Company, a Nevada general partnership,
and CEOC and its subsidiaries hold a 90% general partner interest
in  Leathers, L.P., a California limited partnership, Del  Ranch,
L.P.,  a  California  limited  partnership  and  Elmore,  L.P.  a
California     limited     partnership     (collectively,     the
"Partnerships").   Magma owns a 10% limited partnership  interest
in  each of Leathers L.P., Elmore L.P. and Del Ranch L.P. and has
entered   into  an  agreement  to  pay  to  the  Guarantors   the
distributions  it  receives related to  such  10%  interests,  in
addition to a special distribution equal to 4.5% of total  energy
sales from the Leathers Project.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

      The  accompanying  financial statements of  the  Guarantors
present  the accounts of CEOC, VPC and their proportionate  share
of  the Partnerships in which they have an undivided interest  in
the  assets and are proportionately liable for their share of the
liabilities.    All   significant   intercompany   balances   and
transactions have been eliminated.

      The  financial statements reflect the acquisition of  Magma
and  the  resulting push down to the Guarantors of the accounting
as a purchase business combination.

Revenue Recognition

      The  Guarantors  recognize revenues  and  related  accounts
receivable  from sales of electricity on an accrual  basis  using
stated   contract  prices.  All  of  the  Guarantors   sales   of
electricity are to Southern California Edison Company  ("Edison")
and are under long-term power purchase contracts.

  The Partnership Projects sell all electricity generated by  the
respective  plants  pursuant  to four  long-term  power  purchase
agreements  ("SO4 Agreements") between the projects  and  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.
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 scheduled energy price periods of the Partnership Projects'
SO4  Agreements  extended  until February  1996  for  the  Vulcan
Partnership  and extend until December 1998, December  1998,  and
December  1999  for  each of the Del Ranch, Elmore  and  Leathers
Partnerships, respectively.  Excluding Vulcan, which is receiving
Edison's  Avoided Cost of Energy, the Partnership  Projects'  SO4
Agreements provide for energy rates ranging from 13.6  cents  per
kWh  in 1997 to 15.6 cents per kWh in 1999.  The weighted average
energy  rate for all of the Partnership Projects' SO4  Agreements
was 10.9 cents per kWh in 1997.

  For the year ended December 31, 1997 and 1996, Edison's average
Avoided  Cost  of  Energy was 3.3 cents and 2.5  cents  per  kWh,
respectively,  which is substantially below the  contract  energy
prices earned in 1997.  Estimates of Edison's future Avoided Cost
of  Energy  vary substantially from year to year.  The Guarantors
cannot  predict the likely level of Avoided Cost of Energy prices
under  the  SO4  Agreements at the expiration  of  the  scheduled
payment  periods.  The revenues generated by each of the projects
operating under SO4 Agreements could decline significantly  after
the expiration of the relevant scheduled payment periods.

Property, Plant, Contracts and Equipment

     Property, plant, contracts and equipment are carried at cost
less  accumulated depreciation.  The Guarantors follow  the  full
cost  method of accounting for costs incurred in connection  with
the  exploration  and development of geothermal  resources.   The
Guarantors  provide  depreciation and amortization  of  property,
plants,  contracts and equipment upon the commencement of revenue
production over the estimated useful life of the assets.

  Depreciation of the operating power plant costs, net of salvage
value, is computed on the straight line method over the estimated
useful   lives,  between  10  and  30  years.   Depreciation   of
furniture, fixtures and equipment, which are recorded at cost, is
computed  on  the straight line method over the estimated  useful
lives of the related assets, which range from three to ten years.

   Power sale agreements have been assigned values separately for
each  of (1) the remaining portion of the scheduled price periods
of  the  power sales agreements and (2) the 20 year avoided  cost
periods   of  the  power  sales  agreements  and  are   amortized
separately over such periods using the straight line method.

   The  Salton  Sea reservoir contains commercial  quantities  of
extractable minerals.  The carrying value of the mineral reserves
will be amortized upon commencement of commercial production.

   The  process license represents the economic benefits expected
to  be  realized from the installation of the license and related
technology  at the Imperial Valley.  The carrying  value  of  the
process license is amortized using the straight line method  over
the remaining estimated useful life of the license.

Excess of Cost over Fair Value

   Total  acquisition costs in excess of the fair values assigned
to  the  net assets acquired are amortized over a 40 year  period
using  the straight line method.   At December 31, 1997 and  1996
accumulated amortization of the excess of cost over fair value of
net assets acquired was $10,365 and $6,801, respectively.

Income Taxes

    The  entities  comprising  the  Guarantors  are  included  in
consolidated income tax returns with their parent and affiliates;
however,  income taxes are provided on a separate  return  basis.
Tax  obligations of the Guarantors will be remitted to the parent
only  to  the  extent  of  cash flows available  after  operating
expenses and debt service.

Management Fee

   Pursuant to the Magma Services Agreement, Magma has agreed  to
pay  CEOC all equity cash flows and certain royalties payable  by
the  Guarantors  in exchange for providing data and  services  to
Magma.  As security for the obligations of Magma under the  Magma
Services  Agreement, Magma has collaterally assigned to CEOC  its
rights to such equity cash flows and certain royalties.

Statements of Cash Flows

   For  purposes  of the statement of cash flows, the  Guarantors
consider only demand deposits at banks to be cash.  Cash paid for
interest  during  1997, 1996 and 1995 was  $13,165,  $10,314  and
$3,235, respectively.

Fair Values of Financial Instruments

   Fair  values  of financial instruments that are  not  actively
traded  are based on market prices of similar instruments  and/or
valuation  techniques using market assumptions.  Unless otherwise
noted,   the   estimated  fair  value  amounts  do   not   differ
significantly from recorded values.

Impairment of Long-Lived Assets

     The   Guarantors  review  long-lived  assets   and   certain
identifiable  intangibles  for  impairment  whenever  events   or
changes in circumstances indicate that the carrying amount of  an
asset  may  not  be  recoverable. An  impairment  loss  would  be
recognized  whenever evidence exists that the carrying  value  is
not recoverable.

Use of Estimates

   The  preparation  of financial statements in  conformity  with
generally  accepted accounting principles requires management  to
make  estimates and assumptions that affect the reported  amounts
of assets and liabilities and disclosure of contingent assets and
liabilities  at  the  date of the financial  statements  and  the
reported  amounts of revenues and expenses during  the  reporting
period.  Actual results could differ from those estimates.

3.    ACQUISITION

 Edison Mission Energy's Partnership Interest

  On April 17, 1996, CalEnergy completed the indirect acquisition
of the remaining 50% interest of the Partnerships owned by Edison
Mission  Energy  (the "Partnership Interest Acquisition")  for  a
cash  purchase price of $71,000 including acquisition  costs  and
transferred these interests to VPC and CEOC.

   The Partnership Interest Acquisition has been accounted for as
a   purchase  business  combination.   All  identifiable   assets
acquired and liabilities assumed were assigned a portion  of  the
cost  of acquiring the Partnership Interest, equal to their  fair
values at the date of the acquisition.

   Unaudited  pro forma combined revenue and net  income  of  the
Guarantors on a purchase, push down basis of accounting, for  the
year  ended December 31, 1997, as if the acquisition had occurred
on  January  1,  1996 after giving effect to  certain  pro  forma
adjustments  related  to  the  acquisition,  were  $162,315   and
$33,637,   respectively,  compared  to  $158,912   and   $26,852,
respectively, for the year ended December 31, 1996.

4. PROPERTY, PLANT, CONTRACTS AND EQUIPMENT

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

                                           December 31,
                                         1997       1996

Plant and equipment                  $  73,830  $ 60,272
Power sale agreements                  123,588   123,588
Process license                         46,290    46,290
Mineral reserves                       130,522   121,199
Exploration and development costs       75,978    59,303
                                   ----------- -----------
                                       450,208   410,652
Less accumulated depreciation
  and amortization                     (79,542)  (45,803)
                                   ----------- -----------
                                      $370,666  $364,849
                                       =======   =======

5. SENIOR SECURED PROJECT NOTES

      The  Guarantors have a project note payable to  Salton  Sea
Funding Corporation at an interest rate of 6.69%.  They have also
guaranteed, along with other guarantors, the debt of  Salton  Sea
Funding  Corporation, which amounted to $448,754 at December  31,
1997.  The guarantee is collateralized by a lien on the available
cash  flow of and a pledge of stock in the Guarantors.   On  June
20, 1996, the Salton Sea Funding Corporation issued an additional
investment grade offering for $135,000.  In connection with  this
offering, the Guarantors issued an additional project note in the
amount of $135,000 with interest rates ranging between 7.02%  and
8.30%.  The  structure has been designed to  cross  collateralize
cash flows from each guarantor without cross collateralizing  all
of the guarantors' assets.

Principal maturities of the senior secured project notes  are  as
follows:


               1998            $ 51,762
               1999              32,364
               2000              10,562
               2001               1,000
               2002               1,600
               Thereafter        46,322
                            -----------
                               $143,610
                                =======

      The  estimated  fair values of the Senior  Secured  Project
Notes  at  December 31, 1997 and 1996 were $148,390 and $179,779,
respectively.


6. RELATED PARTY TRANSACTIONS

     The Guarantors are party to a 30-year brine supply agreement
through the Vulcan/BN Geothermal Power Company partnership and  a
technology license agreement for the rights to use the technology
necessary for the construction and operation of the Vulcan Plant.
Under  the  brine supply agreement, the Guarantors will  pay  VPC
4.167%  of  the  contract  energy  component  of  the  price   of
electricity provided by the Vulcan Plant.  In addition,  VPC  has
been  designated  as  operator of the Vulcan Plant  and  receives
agreed-upon compensation for such services.

      Charges  to  the  Guarantors related to  the  brine  supply
agreement  and  operator's fees on a pro rata basis  amounted  to
$403  and  $456,  respectively, for the year ended  December  31,
1997,   $370 and $425, respectively, for the year ended  December
31,  1996,  and $745 and $620, respectively, for the  year  ended
December 31, 1995.

      In  addition,  the  Guarantors entered into  the  following
agreements:

      Easement  Grant  Deed and Agreement Regarding  Rights  for
  Geothermal  Development, whereby the Guarantors  acquired  from
  Magma  rights  to extract geothermal brine from the  geothermal
  lease rights property which is necessary to operate the Leathers,
  Del Ranch and Elmore Plants in return for 17.333%, on a pro rata
  basis,  of  all  energy revenues received by each  plant.   The
  Guarantors' share of amounts expensed under this agreement  for
  1997,   1996  and  1995  were  $21,108,  $16,980  and   $8,115,
  respectively.

     Ground Leases dated March 15 and August 15, 1988 with Magma
  whereby the Guarantors lease from Magma for 32 years the surface
  of  the  land  as  described in the Imperial County  Assessor's
  official records.  Amounts expensed under the ground leases for
  1997, 1996 and 1995 were $70, $60 and $30, respectively.

       Administrative  Services  Agreements  whereby  CEOC  will
  provide  to  the  Partnerships  administrative  and  management
  services for a period of 32 years through 2020.  Fees payable to
  CEOC amount to the greater of 3% of total electricity revenues or
  $60 per month.  The minimum monthly payments for years subsequent
  to  1989 are increased based on the consumer price index of the
  Bureau  of  Labor and Statistics.  Amounts expensed related  to
  these  agreements for 1997, 1996 and 1995 amounted  to  $4,290,
  $3,545 and $1,687,  respectively.

     Operating and Maintenance Agreements whereby the Guarantors
  retain  CEOC  to operate the plants for a period  of  32  years
  through  2020.   Payment  is  made  to  CEOC  in  the  form  of
  reimbursements  of expenses incurred and a guaranteed  capacity
  payment ranging from 10% to 25% of energy revenues over  stated
  amounts.  The Guarantors in 1997, 1996 and 1995 reimbursed CEOC
  for  expenses  of $8,956, $8,547 and $4,471, respectively,  and
  accrued  a  guaranteed capacity payment of $4,492,  $3,888  and
  $1,731 at December 31, 1997, 1996 and 1995, respectively.

7. CONDENSED FINANCIAL INFORMATION

Condensed balance sheet information of the Guarantors' pro rata
interest in the respective entities as of December 31, 1997 and
1996 is as follows:


                                   Vulcan
                                    Power    CEOC   Elmore Del Ranch  Leathers
                             ---------------------------------------------------
December 31, 1997
Assets:
Accounts receivable
  and other                       $      - $  8,802 $  8,381 $  9,972 $  8,204
Due from affiliates                    424   22,631   14,286   14,002        -
Property, plant, contracts
  and equipment, net                   204   15,027   60,828   55,481   70,500
Management fee and
    Goodwill, net                        -        -        -        -        -
Investments in
  partnerships                      76,877  231,311        -        -        -
                                -----------------------------------------------
                                   $77,505 $277,771  $83,495  $79,455  $78,704
                                   ======   ======   ======    ======   ======
Liabilities and Equity:
Accounts payable and
  accrued liabilities              $    40 $  7,541  $   982 $  1,663 $  1,522
Due to affiliates                        -        -        -        -    6,176
Senior secured project note              -        -        -        -        -
                                 -----------------------------------------------
Total liabilities                       40    7,541      982    1,663    7,698
Guarantors' equity                  77,465  270,230   82,513   77,792   71,006
                                 -----------------------------------------------
                                   $77,505 $277,771  $83,495  $79,455  $78,704
                                   ======= ======= =======   ======    ======

(continued)
                                          Vulcan    Adjustments/   Combined
                                            BNG     Eliminations     Total
                                          ------------------------------------
December 31, 1997
Assets:
Accounts receivable
  and other                             $  4,391   $     (3,148)  $  36,602
Due from affiliates                       21,262         51,706     124,311
Property, plant, contracts
  and equipment, net                      51,749        116,877     370,666
Management fee and
    Goodwill, net                              -        205,204     205,204
Investments in
  partnerships                                 -       (308,188)          -
                                           --------------------------------
                                         $77,402        $62,451    $736,783
                                          ======        =======    =======
Liabilities and Equity:
Accounts payable and
  accrued liabilities                  $     525       $119,201    $131,474
Due to affiliates                              -         (6,176)          -
Senior secured project note                    -        143,610     143,610
                                           --------------------------------
Total liabilities                            525        256,635     275,084
Guarantors' equity                        76,877       (194,184)    461,699
                                           --------------------------------
                                         $77,402        $62,451    $736,783
                                          ======         =======   =======


  7. CONDENSED FINANCIAL INFORMATION (Continued)

                                     Vulcan
                                     Power    CEOC   Elmore Del Ranch  Leathers
                                ------------------------------------------------
December 31, 1996
Assets:
Accounts receivable and
  other                           $      -  $ 11,773 $ 9,479  $ 9,198  $10,130
Due from affiliates                      -    17,219   2,678    2,707        -
Property, plant, contracts and
  equipment, net                       230     6,940  58,540   53,635   70,850
Management fee and
     goodwill, net                       -         -       -        -        -
Investments in
  partnerships                      70,571   195,061       -        -        -
                                -----------------------------------------------
                                   $70,801  $230,993 $70,697  $65,540  $80,980
                                    ======   =======  ======   ======    ======

Liabilities and equity:
Accounts payable and
  accrued liabilities           $       65  $ 6,296  $   815  $ 1,678  $ 1,282
Due to affiliate                         -        -        -        -   18,382
Senior secured project note              -        -        -        -        -
                                   -------------------------------------------
Total liabilities                       65    6,296      815    1,678   19,664
Guarantors' equity                  70,736  224,697   69,882   63,862   61,316
                                   ---------------------------------------------
                                   $70,801 $230,993  $70,697  $65,540  $80,980
                                    ====== =======  ======  =======    ======

(continued)
                                         Vulcan   Adjustments/  Combined
                                           BNG    Eliminations    Total
                                       ------------------------------------
December 31, 1996
Assets:
Accounts receivable and
  other                                $ 3,214     $   (1,945)  $ 41,849
Due from affiliates                     14,579         92,095    129,278
Property, plant, contracts and
  equipment, net                        53,310        121,344    364,849
Management fee and
     goodwill, net                           -        206,207    206,207
Investments in
  partnerships                               -       (265,632)         -
                                        ----------------------------------
                                       $71,103       $152,069   $742,183
                                        ======        =======    =======

Liabilities and equity:
Accounts payable and
  accrued liabilities                $     532       $121,249   $131,917
Due to affiliate                             -        (18,382)         -
Senior secured project note                  -        182,204    182,204
                                       -----------------------------------
Total liabilities                          532        285,071    314,121
Guarantors' equity                      70,571       (133,002)   428,062
                                       ----------------------------------
                                       $71,103       $152,069   $742,183
                                        ======         ======     ======

7. CONDENSED FINANCIAL INFORMATION  (Continued)

Condensed combining statements of operations including
information of the Guarantors' pro rata interest in the
respective entities for the years ended December 31, 1997, 1996
and 1995 is as follows:

                                    Vulcan
                                     Power   CEOC   Elmore Del Ranch  Leathers
                               ------------------------------------------------

December 31, 1997
Revenues                          $     859 $45,533 $48,114  $47,068   $47,899
Expenses                                436       -  35,484   33,139    38,209
                               -----------------------------------------------
Net income                         $    423 $45,533 $12,630  $13,929   $ 9,690
                                     ======  ======  ======   ======    ======
December 31, 1996
Revenues                          $   3,157 $49,399 $39,627  $40,235   $39,126
Expenses                                431       -  25,762   25,382    27,055
                               -----------------------------------------------
Net income                         $  2,726 $49,399 $13,865  $14,853   $12,071
                                     ======  ======  ======   ======    ======
December 31, 1995
Revenues                            $15,634 $24,121 $19,336  $18,941   $19,101
Expenses                              1,547       -  12,866   12,523    14,161
                                ----------------------------------------------
Net income                          $14,087 $24,121$  6,470 $  6,418  $  4,940
                                     ======  ======  ======   ======    ======



  (continued)
                                              Vulcan  Adjustments/  Combined
                                                BNG   Eliminations    Total
                                         ------------------------------------

December 31, 1997
Revenues                                     $15,208   $(42,366)   $162,315
Expenses                                       8,903     12,507     128,678
                                           ---------------------------------
Net income                                  $  6,305   $(54,873)    $33,637
                                               ======    =======     ======
December 31, 1996
Revenues                                     $14,271   $(45,589)   $140,226
Expenses                                      12,102     23,735     114,467
                                            ---------------------------------
Net income                                  $  2,169   $(69,324)    $25,759
                                              ======    =======      ======
December 31, 1995
Revenues                                     $20,878   $(30,528)    $87,483
Expenses                                       7,974     23,775      72,846
                                             -------------------------------
Net income                                   $12,904   $(54,303)    $14,637
                                              ======    =======      =====

8. INCOME TAXES

The provision for income taxes for the years ended December 31,
1997, 1996 and 1995 consisted of the following:

                          Current   Deferred   Total
                        --------- --------------------
1997
---------------
Federal                   $17,563   $(1,222)  $16,341
State                       5,237      (204)    5,033
                        ---------  -------------------
Total                     $22,800   $(1,426)   $21,374
                            =====      =====    ======
1996
--------------------
Federal                   $10,945    $ 1,976   $12,921
State                       5,434     (1,655)    3,779
                        ---------  -------------------
Total                     $16,379    $   321   $16,700
                           ======     ======    ======
1995
--------------------
Federal                   $ 6,697    $ 2,264   $ 8,961
State                       3,784     (1,253)    2,531
                        ---------  -------------------
Total                     $10,481    $ 1,011   $11,492
                            =====      =====    ======

Deferred tax liabilities at December 31, 1997 and 1996 consisted
of differences between book and tax methods relating to
depreciation and amortization.

The effective tax rate differs from the federal statutory tax
rate due primarily to percentage depletion in excess of cost
depletion and goodwill amortization.
                 INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

      We  have  audited the accompanying balance  sheets  of  the
Salton  Sea Royalty Company as of December 31, 1997 and 1996  and
the  related statements of operations, equity and cash flows  for
each  of  the three years in the period ended December 31,  1997.
These   financial  statements  are  the  responsibility  of   the
Company's  management.   Our  responsibility  is  to  express  an
opinion on those financial statements based on our audits.

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

     In our opinion, such financial statements present fairly, in
all  material respects, the financial position of the Salton  Sea
Royalty  Company as of December 31, 1997 and 1996 and the results
of  its operations and its cash flows for each of the three years
in  the  period  ended  December  31,  1997  in  conformity  with
generally accepted accounting principles.



DELOITTE & TOUCHE LLP
Omaha, Nebraska
February 12, 1998


                  SALTON SEA ROYALTY COMPANY
                        BALANCE SHEETS
        (Dollars in Thousands, Except Per Share Amounts)


                                                               December 31,
                                                              1997      1996

ASSETS
Due from affiliates                                        $ 19,114   $ 10,008
Royalty stream, net                                          31,818     44,372
Excess of cost over fair value of net assets acquired, net   34,096     35,004
Prepaid expenses and other assets                               981      1,689
                                                         ----------------------
                                                           $ 86,009   $ 91,073
                                                             =======    =======

LIABILITIES AND EQUITY
Liabilities:
Accrued liabilities                                         $21,306    $12,070
Senior secured project note                                  38,934     56,936
Deferred income taxes                                         7,268     12,227
                                                        ----------------------
  Total liabilities                                          67,508     81,233

Commitments and contingencies (Note 4)

Equity:
Common stock, par value $.01 per share; 100 shares
  authorized, issued and outstanding                              -          -
Additional paid-in capital                                    1,561      1,561
Retained earnings                                            16,940      8,279
                                                        ----------------------
  Total equity                                               18,501      9,840
                                                        ----------------------
                                                            $86,009    $91,073
                                                            =======    =======


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


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



                                                   Year ended December 31,
                                                 1997        1996        1995

Revenues:
Royalty income                                 $32,231      $30,143    $28,383

Expenses:
Operating, general and administrative expenses   7,769        7,288      6,822
Amortization of royalty stream and goodwill      9,794       10,280     11,239
Interest expense                                 4,179        5,246      4,757
                                            -----------   ---------- -----------
  Total expenses                                21,742       22,814     22,818
                                            -----------   ---------- -----------
Income before income taxes                      10,489        7,329      5,565
Provision for income taxes                       1,828        2,560        963
                                            -----------   ---------- -----------
Income before minority interest                  8,661        4,769      4,602
Minority interest                                    -            -      1,092
                                            -----------   ---------- -----------
  Net income                                   $ 8,661      $ 4,769   $  3,510
                                               =======       ======     =======


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


                  SALTON SEA ROYALTY COMPANY
                     STATEMENTS OF EQUITY
          FOR THE THREE YEARS ENDED DECEMBER 31, 1997
                    (Dollars in Thousands)

                                                  Additional
                                  Common Stock      Paid-in  Retained
                                Shares   Amount     Capital  Earnings   Total
                       -------------------------------------------------------

Balance, January 1, 1995            -  $      -    $  5,300  $     -   $ 5,300
Net income in 1995 prior to
  acquisition                       -         -           -    1,092     1,092
Purchase accounting push-down
  adjustment, net                   -         -      38,043   (1,092)   36,951
Distributions                       -         -     (20,501)       -   (20,501)
Contributions                       -         -       1,699        -     1,699
Issuance of common stock          100         -           -        -         -
Net income                          -         -           -    3,510     3,510
                           ---------------------------------------------------
Balance, December 31, 1995        100         -      24,541    3,510    28,051

Distributions                       -         -     (22,980)       -   (22,980)
Net income                          -         -           -    4,769     4,769
                           ---------------------------------------------------
Balance, December 31, 1996        100         -       1,561    8,279     9,840

Net income                          -         -           -    8,661     8,661
                            --------------------------------------------------
Balance, December 31, 1997        100   $     -   $   1,561  $16,940   $18,501
                                 =====   =======    =======   ======   ======


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


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

                                                Year End December 31,
                                                 1997       1996       1995
Cash flow from operating activities:
Net income                                     $ 8,661    $ 4,769   $ 3,510
Adjustments to reconcile net income to net cash provided by
 operating activities:
  Minority interest                                  -          -     1,092
  Amortization of royalty stream and goodwill    9,794     10,280    11,239
  Deferred income taxes                         (4,959)    (3,233)   (4,581)
  Changes in assets and liabilities:
  Prepaid expenses and other assets              4,376        886    (2,575)
  Accrued liabilities                            9,236      6,122     5,948
                                              ------------------------------
Net cash flows from operating activities        27,108     18,824    14,633
                                              ------------------------------
Net cash flow from investing activities:
Purchase of Company by CalEnergy,
   net of cash acquired                              -         -    (38,603)
                                              ------------------------------
Net cash flows from financing activities:
Proceeds from issuance of debt                       -         -    115,446
Decrease (increase) in due from affiliates      (9,106)   15,102    (25,110)
Contributions from parent                            -         -      1,699
Distribution to parent                               -   (22,980)   (20,501)
Loan repayments                                (18,002)  (10,946)   (47,564)
                                              ------------------------------
Net cash flows from financing activities       (27,108)  (18,824)    23,970
                                              ------------------------------
Net change in cash                                   -         -          -
Cash at beginning of period                          -         -          -
                                              ------------------------------
Cash at end of period                         $      -  $      -  $       -
                                                 ======    ======    ======

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

                  SALTON SEA ROYALTY COMPANY
                 NOTES TO FINANCIAL STATEMENTS
                     (Dollars in Thousands)


1. ORGANIZATION

  Salton  Sea  Royalty  Company  (the  "Royalty  Company")  is  a
single-purpose entity, 99% owned by Magma Power Company ("Magma")
and  1%  owned  by Salton Sea Funding Corporation  (the  "Funding
Corporation").   Effective  February 24,  1995,  Magma  became  a
wholly-owned subsidiary of CalEnergy Company, Inc. ("CalEnergy").

  In  June  1995, the Royalty Company received an  assignment  of
royalties  and  certain fees paid by three partnership  projects,
Del  Ranch,  Elmore and Leathers (collectively, the  "Partnership
Projects").  On April 17, 1996, CalEnergy acquired the  remaining
50%   interest  in  the  Partnership  Projects.   Prior  to  this
transaction, Magma and its affiliates had a 50% interest  in  the
Partnership  Projects.   In addition,  the  Royalty  Company  has
received an assignment of certain resource-related royalties  and
contract  assignment  royalties payable by the  geothermal  power
plant located in Imperial Valley, California which is owned by an
unaffiliated   third  party  (East  Mesa,   together   with   the
Partnership  Projects, the "Projects").  All of the Projects  are
engaged  in  the  operation of geothermal  power  plants  in  the
Imperial Valley in Southern California. Substantially all of  the
assigned  royalties  are  based on a  percentage  of  energy  and
capacity  revenues  of  the  Projects.   With  the  exception  of
royalties  from  East  Mesa, the royalties  are  senior  to  debt
service  and  are pari passu with other operating and maintenance
expenses of the Projects.

  All  of  the  Projects have executed long-term  power  purchase
agreements  ("SO4 Agreements") providing for capacity and  energy
sales to Southern California Edison Company ("Edison").  Each  of
these  agreements provides for fixed price capacity payments  for
the life of the contract.  The East Mesa Project has entered into
a  Termination  Agreement, to which Magma consented,  which  will
terminate its SO4 Agreement upon CPUC approval becoming final.

  The Partnership Projects earn energy payments based on kilowatt
hours  (kWhs) of energy provided to Edison.  During the first  10
years of the agreement, the Projects earn payments for energy  as
scheduled  in  the  SO4 Agreements.  After the 10-year  scheduled
payment  period has expired (1998 for Del Ranch and Elmore;  1999
for   Leathers),  the  energy  payment  per  kWh  throughout  the
remainder of the contract period will be at Edison's Avoided Cost
of  Energy.   For  the  year ended December 31,  1997  and  1996,
Edison's  average Avoided Cost of Energy was 3.3  cents  and  2.5
cents  per  kWh, respectively, which is substantially  below  the
contract  energy  prices earned in 1997.  Estimates  of  Edison's
future  Avoided Cost of Energy vary substantially  from  year  to
year.   The  Royalty Company cannot predict the likely  level  of
Avoided  Cost  of Energy prices under the SO4 Agreements  at  the
expiration  of  the  scheduled  payment  periods.   The  revenues
generated  by  each of the units operating under  SO4  Agreements
could  decline significantly after the expiration of the relevant
scheduled payment period which would have a direct effect on  the
related royalty streams.

  As discussed above, all revenues except those derived from East
Mesa  are  from, and all operating expenses are paid by,  related
parties.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

  The accompanying statement of operations presents revenues  and
expenses  which have been assigned to the Royalty  Company  under
the  arrangements  described  above  on  the  accrual  method  of
accounting.  This  presentation is a "carve out"  of  information
from Magma and certain of its affiliates.  Such revenues, net  of
related expenses, guarantee loans from the Funding Corporation, a
wholly-owned subsidiary of CalEnergy.

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

Royalty Stream

  The Royalty Company's policy is to provide amortization expense
beginning  upon the commencement of revenue production  over  the
estimated remaining useful life of the identifiable assets.

  The  royalty  streams have been assigned values separately  for
each  of (1) the remaining portion of the scheduled price periods
of  the  Projects' power sales agreements and  (2)  the  20  year
avoided cost periods of the Projects' power sales agreements  and
are  amortized  separately over such periods using  the  straight
line   method.   At  December  31,  1997  and  1996,  accumulated
amortization was $28,669 and $19,783, respectively.

Excess of Cost over Fair Value

 Total acquisition costs in excess of the fair values assigned to
the net assets acquired are amortized over a 40 year period using
the  straight  line  method.   At December  31,  1997  and  1996,
accumulated  amortization of the excess of cost over  fair  value
was $2,645 and $1,737, respectively.

Income Taxes

  The  Royalty  Company  is included in consolidated  income  tax
returns  with  its  parent  and  affiliates.   Income  taxes  are
provided on a separate return basis, however, tax obligations  of
the  Royalty Company will be remitted to the parent only  to  the
extent of cash flows available after operating expenses and  debt
service.

Fair Values of Financial Instruments

  Fair  values  of  financial instruments that are  not  actively
traded  are based on market prices of similar  instruments and/or
valuation  techniques using market assumptions.  Unless otherwise
noted,   the   estimated  fair  value  amounts  do   not   differ
significantly from recorded values.

Impairment of Long-Lived Assets

   The  Royalty  Company reviews long-lived  assets  and  certain
identifiable  intangibles  for  impairment  whenever  events   or
changes in circumstances indicate that the carrying amount of  an
asset  may  not  be  recoverable.  An impairment  loss  would  be
recognized  whenever evidence exists that the carrying  value  is
not recoverable.

Use of Estimates

  The  preparation  of financial statements  in  conformity  with
generally  accepted accounting principles requires management  to
make  estimates and assumptions that affect the reported  amounts
of assets and liabilities and disclosure of contingent assets and
liabilities  at  the  date of the financial  statements  and  the
reported  amounts of revenues and expenses during  the  reporting
period.  Actual results could differ from those estimates.

3. SENIOR SECURED PROJECT NOTE

   The  Royalty Company has a project note payable to Salton  Sea
Funding  Corporation  at interest rates  ranging  from  6.69%  to
7.37%.   They  have also guaranteed, along with other guarantors,
the  debt  of  Salton Sea Funding Corporation, which amounted  to
$448,754   at  December  31,  1997.   The  guarantee  issued   is
collateralized by a lien on substantially all the assets of and a
pledge  of  stock  in  the  Guarantor.  The  structure  has  been
designed  to  cross collateralize cash flows from each  guarantor
without cross collateralizing all of the guarantors' assets.

Principal maturities of the senior secured project note are as
follows:
          1998            $ 15,726
          1999               9,396
          2000               4,773
          2001               4,434
          2002               3,460
          Thereafter         1,145
                        ----------
                           $38,934
                            ======

  The estimated fair values of the senior secured project note at
December 31, 1997 and 1996 were $40,251 and $56,178,
respectively.

4.        Income Taxes

  The provision for income taxes for the year ended December 31,
1997, 1996 and 1995, consisted of the following:
                          Current    Deferred   Total
                        --------- ----------- --------
1997
Federal                    $5,292    $(4,159)   $1,133
State                       1,495       (800)      695
                        --------- ----------- --------
Total                      $6,787    $(4,959)   $1,828
                            =====      ======    =====
1996
Federal                    $4,517    $(2,390)   $2,127
State                       1,276       (843)      433
                        --------- ----------- --------
Total                      $5,793    $(3,233)   $2,560
                            =====      ======    =====
1995
Federal                    $4,323    $(3,644)     $679
State                       1,221       (937)      284
                        --------- ----------- --------
Total                      $5,544    $(4,581)     $963
                            =====      ======    =====

  The Royalty Company's effective tax rate differs from the
statutory federal income tax rate due primarily to percentage
depletion in excess of cost depletion and goodwill amortization.

  Deferred tax liabilities and assets at December 31, 1997 and
1996 consisted of the following:

                                       1997         1996
Deferred liabilities:
Depreciation and amortization          $12,568     $17,527
Deferred assets:
Jr. SO4 royalty receivable               5,300       5,300
                                    ----------- -----------
Net deferred tax liability             $ 7,268     $12,227
                                       =======      ======

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

  Not applicable.

                            PART III


Item 10.    Directors and Executive Officers of the Registrant

   Set  forth  below are the current executive  officers  of  the
Funding  Corporation and the Guarantors and their positions  with
the  Funding  Corporation and each of the Guarantors (or  general
partner thereof):

  EXECUTIVE OFFICER           POSITION

David L. Sokol      Chairman of the Board and  Chief Executive Officer; Director
Gregory E. Abel     President and Chief Operating Officer
Steven A. McArthur  Executive Vice  President,General Counsel and Secretary;
                    Director
Craig M. Hammett    Senior Vice President and Chief Financial Officer
Thomas R. Mason     President, CalEnergy Operating Company; Director
Patrick J. Goodman  Vice President and Chief Accounting Officer

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

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

       STEVEN  A. McARTHUR, 39, Executive Vice President, General
Counsel  and Secretary. Mr. McArthur joined CalEnergy in February
1991.  From  1988  to 1991 he was an attorney  in  the  Corporate
Finance Group at Shearman & Sterling in San Francisco. From  1984
to  1988  he  was an attorney in the Corporate Finance  Group  at
Winthrop, Stimson, Putnam & Roberts in New York.

       CRAIG  M.  HAMMETT,  36, Senior Vice President  and  Chief
Financial Officer.  Mr. Hammett joined CalEnergy in 1996.   Prior
to  joining CalEnergy, Mr. Hammett served as Director of  Project
Finance for Entergy Power Group, as Director, Project Finance and
M&A  for  CSW Energy and as a corporate loan officer for  various
financial institutions.

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

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

Item 11.    Executive Compensation

   The  Funding  Corporation's and the Guarantors' directors  and
executive  officers receive no remuneration for serving  in  such
capacities.


Item  12.   Security Ownership of Certain Beneficial  Owners  and
Management


Description of Capital Stock

   As  of December 31, 1997, the authorized capital stock of  the
Funding  Corporation consisted of 1,000 shares of  common  stock,
par  value  $.01  per share (the "Common Stock"),  of  which  100
shares  were outstanding. There is no public trading  market  for
the  Common Stock. As of December 31, 1997, there was one  holder
of  record  of  the  Common Stock. Holders of  Common  Stock  are
entitled  to one vote per share on any matter coming  before  the
stockholders for a vote.

   The  Funding  Corporation does not expect in  the  foreseeable
future  to  pay any dividends on the Common Stock. The  Indenture
contains  certain restrictions on the payment of  dividends  with
respect to the Common Stock.


Principal Holders

   Since  the formation of the Funding Corporation in June  1995,
all of the outstanding shares of Common Stock have been owned  by
Magma. Magma directly or indirectly owns all of the capital stock
of  or  partnership interests in the Funding Corporation and  the
Guarantors.  CalEnergy owns all of the capital  stock  of  Magma.
CalEnergy's  common stock is publicly traded  on  the  New  York,
Pacific and London Stock Exchanges.


Item 13.  Certain Relationships and Related Transactions

Other Relationships and Related Transactions

    The  Salton  Sea  Projects'  and  the  Partnership  Projects'
geothermal  power plants are owned, administered and operated  by
Magma  or subsidiaries of Magma. Geothermal fluid supplying these
facilities   is   provided  from  Magma's  (or  a   subsidiary's)
geothermal resource holdings in the SSKGRA.

   In  providing rights to geothermal resources and/or geothermal
fluids,  administering and operating the geothermal power plants,
and  disposing  of solids from these facilities, Magma  (directly
and   through  subsidiaries)  receives  certain  royalties,  cost
reimbursements  and  fees  for its services  and  the  rights  it
provides. See the financial statements attached hereto.

   The  Funding  Corporation believes that the transactions  with
related parties described above, taking into consideration all of
the  respective  terms  and conditions of each  of  the  relevant
contracts  and  agreements,  are at least  as  favorable  to  the
Guarantors as those which could have been obtained from unrelated
parties in arms' length negotiations.


Relationship  of  the Funding Corporation and the  Guarantors  to
Magma and CalEnergy

   The Funding Corporation is a wholly owned direct subsidiary of
Magma  organized for the sole purpose of acting as issuer of  the
Securities.  The Funding Corporation is restricted,  pursuant  to
the terms of the Indenture, to acting as issuer of the Securities
and  other indebtedness as permitted under the Indenture,  making
loans  to  the Guarantors pursuant to the Credit Agreements,  and
transactions related thereto. The Funding Corporation and each of
the  Guarantors (and, in the case of SSBP and SSPG,  the  general
partners  thereof) have been organized and are operated as  legal
entities  separate and apart from CalEnergy, Magma and any  other
Affiliates of CalEnergy or Magma, and, accordingly, the assets of
the  Funding Corporation and the Guarantors (and, in the case  of
SSBP  and  SSPG,  the  general  partners  thereof)  will  not  be
generally  available  to  satisfy the obligations  of  CalEnergy,
Magma  or  any other Affiliates of CalEnergy or Magma;  provided,
however,  that  unrestricted cash of the Funding Corporation  and
the   Guarantors  or  other  assets  which  are   available   for
distribution  may, subject to applicable law  and  the  terms  of
financing arrangements of such parties, be advanced, loaned, paid
as   dividends   or  otherwise  distributed  or  contributed   to
CalEnergy, Magma or Affiliates thereof.
                            PART IV


Item 14.  Exhibits, Financial Statements Schedule and Reports  on
Form 8-K

     (a)  Financial Statements and Schedules

     (i)  Financial Statements

        Financial Statements are included in Part II of this Form
10-K

     (ii) Financial Statement Schedules

             Financial  Statement  Schedules  are  not   included
       because  they are not required or the information required
       is included in Part II of this Form 10-K.

  (b)  Reports on Form 8-K

     None.

  (c)  Exhibits

      The  exhibits listed on the accompanying Exhibit Index  are
filed as part of this Annual Report.

      For  the purposes of complying with the amendments  to  the
rules  governing  Form  S-4 effective July  13,  1990  under  the
Securities  Act  of  1933, the undersigned hereby  undertakes  as
follows,  which  undertaking shall be incorporated  by  reference
into  the  Funding Corporation's currently effective Registration
Statements on Form S-4.

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

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

  Not Applicable
                           Signatures

   Pursuant  to the requirements of Section 13 or 15 (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              SALTON SEA FUNDING CORPORATION

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                     Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                        March 26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                        March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                      March 26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                       March 26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                     March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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

                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              SALTON SEA BRINE PROCESSING, L.P.
                              a California limited partnership

                              By: Salton Sea Power Company,
                                  a California corporation, its
                                  general partner

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                     Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March 26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March 26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                      March 26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                    March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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


                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              SALTON SEA POWER GENERATION, L.P.,
                              a California  limited partnership

                              By:  Salton Sea Power Company, a
                              California corporation, its
                              general partner

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                       Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March 26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March 26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                      March 26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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


                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              FISH LAKE POWER COMPANY

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                           Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March 26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March 26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                     March 26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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


                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              VULCAN POWER COMPANY

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                            Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March 26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March 26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                      March 26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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

                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              CALENERGY OPERATING CORPORATION

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                         Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March 26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March 26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                      March 26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                    March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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

                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              SALTON SEA ROYALTY COMPANY

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                          Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March 26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March  26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                      March  26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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



                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              LEATHERS, L.P., a
                              California  limited partnership

                              By:  CalEnergy Operating Corporation, a
                              Delaware corporation, its
                              general partner

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                         Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                        March  26,1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                        March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March  26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                      March  26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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

                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              ELMORE L.P., a California limited partnership

                              By: CalEnergy Operating Corporation, a
                              Delaware corporation, its
                              general partner

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                          Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March  26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March  26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                      March  26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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

                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              DEL RANCH L.P., a
                              California  limited partnership

                              By:  CalEnergy Operating Corporation, a
                              Delaware corporation, its
                              general partner

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                           Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                        March  26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                        March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                      March  26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                       March  26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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


                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              BN GEOTHERMAL INC., a
                              Delaware corporation

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                           Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March  26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March  26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                     March  26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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

                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              NIGUEL ENERGY COMPANY, a
                              California  corporation

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                      Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                        March  26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                        March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                      March 26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                       March  26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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

                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              CONEJO ENERGY COMPANY, a
                              California  corporation

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                      Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March  26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March  26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                      March  26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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

                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              SAN FELIPE ENERGY COMPANY, a
                              California  corporation

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                          Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March  26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                      March  26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                      March  26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                   March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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

                           Signatures

  Pursuant  to the requirements of Section 13 or 15  (d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly  authorized,  in the  City  of  Omaha,  State  of
Nebraska, on March 26, 1998.

                              VULCAN/BN GEOTHERMAL POWER COMPANY,a
                              Nevada general partnership

                              By:  VULCAN POWER COMPANY,  a
                                   Nevada corporation, Partner

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

  Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, each thereunto duly authorized in the City of
Omaha, State of Nebraska, on the dates indicated.

Signature                                                       Date

/s/ David L. Sokol*                                        March 26, 1998
David L. Sokol
Director, Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

/s/ Thomas R. Mason*                                       March  26, 1998
Thomas R. Mason
Director, President, CalEnergy Operating Company

/s/ Gregory E. Abel*                                       March 26, 1998
Gregory E. Abel
President and Chief Operating Officer

/s/ Steven A. McArthur                                     March  26, 1998
Steven A. McArthur
Director, Executive Vice President, General Counsel and Secretary

/s/ Craig M. Hammett*                                      March  26, 1998
Craig M. Hammett
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

/s/ Patrick J. Goodman*                                    March 26, 1998
Patrick J. Goodman
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

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


                       INDEX TO EXHIBITS


Exhibit No.          Description of Exhibit

3.1 Articles   of   Incorporation  of  the  Funding   Corporation
    (incorporated  by  reference to Exhibit 3.1  to  the  Funding
    Corporation  Registration Statement on Form S-4 dated  August
    9, 1995, 33-95538 ("Form S-4")).

3.2 By-laws   of   the   Funding  Corporation  (incorporated   by
    reference to Exhibit 3.2 to the Funding Corporation  Form  S-
    4).

3.3 Limited  Partnership  Agreement  of  SSBP  (incorporated   by
    reference to Exhibit 3.3 to the Funding Corporation  Form  S-
    4).

3.4 Limited  Partnership  Agreement  of  SSPG  (incorporated   by
    reference to Exhibit 3.4 to the Funding Corporation  Form  S-
    4).

3.5 Articles  of  Incorporation  of Fish  Lake  (incorporated  by
    reference to Exhibit 3.5 to the Funding Corporation  Form  S-
    4).

3.6 By-laws  of  Fish Lake (incorporated by reference to  Exhibit
    3.6 to the Funding Corporation Form S-4).

3.7 Articles  of Incorporation of VPC (incorporated by  reference
    to Exhibit 3.7 to the Funding Corporation Form S-4).

3.8 By-laws of VPC (incorporated by reference to Exhibit  3.8  to
    the Funding Corporation Form S-4).

3.9 Articles  of Incorporation of CEOC (incorporated by reference
    to Exhibit 3.9 to the Funding Corporation Form S-4).

3.10By-laws  of  CEOC (incorporated by reference to Exhibit  3.10
    to the Funding Corporation Form S-4).

3.11Articles   of   Incorporation  of   the   Royalty   Guarantor
    (incorporated  by reference to Exhibit 3.11  to  the  Funding
    Corporation Form S-4).

3.12By-laws  of the Royalty Guarantor (incorporated by  reference
    to Exhibit 3.12 to the Funding Corporation Form S-4).

3.13Certificate of Amendment of Certificate of Incorporation
  dated as of March 26, 1996

3.14 Articles  of  Incorporation of BNG  (incorporated  by
  reference   to  Exhibit  3.13  to  the  Funding     Corporation
  Registration Statement on  Form S-4 dated July 2, 1996, 333-07527
  ("Funding     Corporation II Form S-4")).

3.15 By-laws of BNG (incorporated by reference to Exhibit  3.14
to the Funding Corporation II Form S-4).

3.16 Articles of Incorporation of San Felipe (incorporated by
  reference to Exhibit 3.15 to the Funding    Corporation II Form
  S-4).

3.17 By-laws  of  San Felipe (incorporated  by  reference  to
  Exhibit 3.16 to the Funding Corporation II Form   S-4).

3.18 Articles  of  Incorporation  of  Conejo  (incorporated  by
reference to Exhibit 3.17 to the Funding  Corporation II Form  S-
4).

3.19 By-laws of Conejo (incorporated by reference to  Exhibit
  3.18 to the Funding Corporation II Form
    S-4).

3.20 Articles  of  Incorporation  of  Niguel  (incorporated  by
reference to Exhibit 3.19 to the Funding  Corporation II Form  S-
4).

3.21 By-laws  of Niguel (incorporated by reference  to  Exhibit
3.20 to the Funding Corporation II Form S-4).

3.22 General  Partnership Agreement of Vulcan (incorporated  by
reference to Exhibit 3.21 to the Funding  Corporation II Form  S-
4).

3.23  Limited Partnership Agreement of Leathers (incorporated  by
reference to Exhibit 3.22 to the Funding  Corporation II Form  S-
4).

3.24 Amended  and Restated Limited Partnership  Agreement  of
  Del Ranch (incorporated by reference to     Exhibit 3.23 to the
  Funding Corporation II Form S-4).

3.25 Amended  and  Restated Limited  Partnership  Agreement  of
Elmore  (incorporated by reference to      Exhibit  3.24  to  the
Funding Corporation II Form S-4).

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

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

4.1(c)       Second Supplemental Indenture, dated as of June  20,
   1996,  between  Chemical Trust Company of    California  and  the
   Funding Corporation (incorporated by reference to Exhibit  4.1(c)
   to the Funding    Corporation II Form S-4).

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

4.2 Salton  Sea Secured Guarantee, dated as of July 21, 1995,  by
    SSBP,  SSPG and Fish Lake in favor of Chemical Trust  Company
    of  California (incorporated by reference to Exhibit  4.2  to
    the Funding Corporation Form S-4).

4.3(a)      Partnership  Guarantors  Secured  Limited  Guarantee,
    dated  as  of  July 21, 1995, by CEOC and  VPC  in  favor  of
    Chemical   Trust  Company  of  California  (incorporated   by
    reference to Exhibit 4.3 to the Funding Corporation  Form  S-
    4).

4.3(b)       Amended and Restated Partnership Guarantors  Secured
   Limited Guarantee, dated as of June 20,   1996 by CEOC, and  VPC,
   Conejo, Niguel, Sal Felipe, BNG, Del Ranch, Elmore, Leathers  and
   Vulcan   in   favor  of  Chemical  Trust  Company  of  California
   (incorporated  by reference to Exhibit 4.3       to  the  Funding
   Corporation II Form S-4).

4.4 Royalty  Guarantor  Secured Limited Guarantee,  dated  as  of
    July  21, 1995, by the Royalty Guarantor in favor of Chemical
    Trust  Company  of California (incorporated by  reference  to
    Exhibit 4.4 to the Funding Corporation Form S-4).

4.5(a)     Exchange and Registration Rights Agreement, dated July
    21,  1995,  by and among CS First Boston Corporation,  Lehman
    Brothers  Inc.  and the Funding Corporation (incorporated  by
    reference to Exhibit 4.5 to the Funding Corporation  Form  S-
    4).

4.5(b)       Exchange  and Registration Rights  Agreement,  dated
   June 20, 1996, by and between CS First    Boston Corporation  and
   the Funding Corporation (incorporated by reference to Exhibit 4.5
   to the      Funding Corporation II Form S-4).

4.6(a)     Collateral  Agency and Intercreditor Agreement,  dated
    as  of  July  21, 1995, by and among Credit Suisse,  Chemical
    Trust Company of California, the Funding Corporation and  the
    Guarantors (incorporated by reference to Exhibit 4.6  to  the
    Funding Corporation Form S-4).

4.6(b)        First  Amendment  to  the  Collateral  Agency   and
   Intercreditor  Agreement, dated as of June  20,  1996,    by  and
   among  Credit  Suisse, Chemical Trust Company of California,  the
   Funding  Corporation  and       the Guarantors  (incorporated  by
   reference to Exhibit 4.6(b) to the Funding Corporation II Form S-4).

4.7 Stock  Pledge Agreement, dated as of July 21, 1995, by  Magma
    Power   Company  in  favor  of  Chemical  Trust  Company   of
    California (incorporated by reference to Exhibit 4.7  to  the
    Funding Corporation Form S-4).

4.8(a)     Purchase Agreement, dated July 18, 1995, by and  among
    CS  First  Boston  Corporation,  Lehman  Brothers  Inc.,  the
    Guarantors  and  the  Funding  Corporation  (incorporated  by
    reference to Exhibit 4.8 to the Funding Corporation  Form  S-
    4).

4.8(b)      Purchase Agreement, dated June 17, 1996, by and among
   CS  First  Boston Corporation, the    Guarantors and the  Funding
   Corporation  (incorporated by reference to Exhibit  4.8   to  the
   Funding     Corporation II Form S-4).

4.9        Support  Letter,  dated as of July 21,  1995,  by  and
    among  Magma Power Company, the Funding Corporation  and  the
    Guarantors (incorporated by reference to Exhibit 4.9  to  the
    Funding Corporation Form S-4).

4.10Debt  Service  Reserve  Letter of  Credit  and  Reimbursement
    Agreement,  dated  as  of July 21, 1995,  by  and  among  the
    Funding  Corporation,  certain banks and  Credit  Suisse,  as
    agent  (incorporated  by reference to  Exhibit  4.10  to  the
    Funding Corporation Form S-4).

4.11     Revolving Credit Agreement, dated as of July  21,  1995,
   by  and  among  Credit  Suisse and the     Funding  Corporation
   (incorporated  by  reference to Exhibit  4.11  to  the  Funding
   Corporation Form S-4).

4.12Salton  Sea  Credit Agreement, dated July 21,  1995,  by  and
    among SSBP, SSPG and Fish Lake (incorporated by reference  to
    Exhibit 4.12 to the Funding Corporation Form S-4).

4.13Salton  Sea Project Note, dated July 21, 1995, by SSBP,  SSPG
    and   Fish   Lake   in  favor  of  the  Funding   Corporation
    (incorporated  by reference to Exhibit 4.13  to  the  Funding
    Corporation Form S-4).

4.14(a)    Deposit and Disbursement Agreement, dated as  of  July
    21,  1995,  by  and  among the Funding Corporation,  Chemical
    Trust  Company of California and the Guarantors (incorporated
    by  reference to Exhibit 4.14 to the Funding Corporation Form
    S-4).

4.14(b)       Amendment  No.  1  to  Deposit   and   Disbursement
   Agreement, dated as of June 20, 1996, by and    among the Funding
   Corporation,  Chemical  Trust  Company  of  California  and   the
   Guarantors  (incorporated by reference to Exhibit 4.14(b) to  the
   Funding Corporation II Form S-4).

4.15Partnership Interest Pledge Agreement, dated as of  July  21,
    1995, by Magma Power Company and Salton Sea Power Company  in
    favor  of  Chemical Trust Company of California (incorporated
    by  reference to Exhibit 4.15 to the Funding Corporation Form
    S-4).

4.16Partnership Interest Pledge Agreement, dated as of  July  21,
    1995,  by  SSBP  and  Salton Sea Power Company  in  favor  of
    Chemical   Trust  Company  of  California  (incorporated   by
    reference to Exhibit 4.16 to the Funding Corporation Form  S-
    4).

4.17Stock  Pledge  Agreement (Pledge of Stock  of  Fish  Lake  by
    Magma  Power Company and the Funding Corporation),  dated  as
    of  July  21,  1995, by Magma Power Company and  the  Funding
    Corporation in favor of Chemical Trust Company of  California
    (incorporated  by reference to Exhibit 4.17  to  the  Funding
    Corporation Form S-4).

4.18Cost  Overrun Commitment, dated as of July 21, 1995,  between
    CalEnergy,   SSPG,  SSBP  and  Fish  Lake  (incorporated   by
    reference to Exhibit 4.18 to the Funding Corporation Form  S-
    4).

4.19(a)    Partnership  Guarantors Credit Agreement,  dated  July
    21,  1995, by and among CEOC, VPC and the Funding Corporation
    (incorporated  by reference to Exhibit 4.19  to  the  Funding
    Corporation Form
    S-4).

4.19(b)      Amended  and Restated Partnership Guarantors  Credit
   Agreement,  dated June 20, 1996, by and    among the  Partnership
   Guarantors and the Funding Corporation (incorporated by reference
   to  Exhibit 4.19 to the Funding Corporation II Form S-4).

4.20Partnership  Guarantors Security Agreement and Assignment  of
    Rights,  dated as of July 21, 1995, by CEOC and VPC in  favor
    of  Chemical  Trust  Company of California  (incorporated  by
    reference to Exhibit 4.20 to the Funding Corporation Form  S-
    4).

4.21Stock  Pledge  Agreement (Pledge of Stock of  CEOC  by  Magma
    Power Company and the Funding Corporation), dated as of  July
    21,  1995, by Magma Power Company and Funding Corporation  in
    favor  of  Chemical Trust Company of California (incorporated
    by  reference to Exhibit 4.21 to the Funding Corporation Form
    S-4).

4.22Stock  Pledge  Agreement (Pledge of Stock  of  VPC  by  Magma
    Power Company and the Funding Corporation), dated as of  July
    21,  1995, by Magma Power Company and the Funding Corporation
    in   favor   of   Chemical   Trust  Company   of   California
    (incorporated  by reference to Exhibit 4.22  to  the  Funding
    Corporation Form S-4).

4.23Royalty   Guarantor  Credit  Agreement,  among  the   Royalty
    Guarantor and the Funding Corporation, dated as of  July  21,
    1995  (incorporated  by  reference to  Exhibit  4.23  to  the
    Funding Corporation Form S-4).

4.24Royalty  Project  Note, dated as of July  21,  1995,  by  the
    Royalty   Guarantor  in  favor  of  the  Funding  Corporation
    (incorporated  by reference to Exhibit 4.24  to  the  Funding
    Corporation Form S-4).

4.25Royalty Security Agreement and Assignment of Revenues,  dated
    as  of  July 21, 1995, by the Royalty Guarantor in  favor  of
    Chemical   Trust  Company  of  California  (incorporated   by
    reference to Exhibit 4.25 to the Funding Corporation Form  S-
    4).

4.26Royalty  Deed  of Trust, dated as of July 21,  1995,  by  the
    Royalty  Guarantor to Chicago Title Company for the  use  and
    benefit    of    Chemical   Trust   Company   of   California
    (incorporated  by reference to Exhibit 4.26  to  the  Funding
    Corporation Form S-4).

4.27Stock  Pledge Agreement (Pledge of Stock of Royalty Guarantor
    by  Magma  Power Company and the Funding Corporation),  dated
    as  of  July 21, 1995, by Magma Power Company and the Funding
    Corporation in favor of Chemical Trust Company of  California
    (incorporated  by reference to Exhibit 4.27  to  the  Funding
    Corporation Form S-4).

4.28Collateral  Assignment  of the Imperial  Irrigation  District
    Agreements,  dated  as of July 21, 1995, by  SSBP,  SSPG  and
    Fish  Lake  in favor of Chemical Trust Company of  California
    (incorporated  by reference to Exhibit 4.28  to  the  Funding
    Corporation Form S-4).


4.29Collateral  Assignments  of Certain  Salton  Sea  Agreements,
    dated  as  of July 21, 1995, by SSBP, SSPG and Fish  Lake  in
    favor  of  Chemical Trust Company of California (incorporated
    by  reference to Exhibit 4.29 to the Funding Corporation Form
    S-4).

4.30Debt  Service  Reserve Letter of Credit by Credit  Suisse  in
    favor  of  Chemical Trust Company of California (incorporated
    by  reference to Exhibit 4.30 to the Funding Corporation Form
    S-4).

4.31Partnership  Project Note, dated July 21, 1995,  by  VPC  and
    CEOC  in  favor  of the Funding Corporation (incorporated  by
    reference to Exhibit 4.31 to the Funding Corporation Form  S-
    4).

4.32   Collateral Assignment of the Imperial Irrigation  District
   Agreements,  dated as of June 20, 1996, by       Vulcan,  Elmore,
   Leathers, VPC and Del Ranch in favor of Chemical Trust Company of
   California   (incorporated by reference to Exhibit  4.29  to  the
   Funding Corporation II Form S-4).

4.33   Collateral Assignments of Certain Partnership  Agreements,
   dated  as  of June 20, 1996, by Vulcan      Elmore, Leathers  and
   Del  Ranch  in  favor  of  Chemical Trust Company  of  California
   (incorporated  by   reference  to Exhibit  4.31  to  the  Funding
   Corporation II Form S-4).

4.34   Debt Service Reserve Letter of Credit by Credit Suisse  in
   favor  of Chemical Trust Company of  California (incorporated  by
   reference to Exhibit 4.32 to the Funding Corporation II  Form  S-4).

4.35   Partnership  Project Note, dated June  20,  1996,  by  the
   Partnership Guarantors in favor of the    Funding Corporation  in
   the principal amount of $54,956,000 (incorporated by reference to
   Exhibit     4.33 to the Funding Corporation II Form S-4).

4.36   Partnership  Project Note, dated June  20,  1996,  by  the
   Partnership Guarantors in favor of the    Funding Corporation  in
   the  principal amount of $135,000,000 (incorporated by  reference
   to Exhibit  4.34 to the Funding Corporation II Form S-4).

4.37   Deed  of  Trust, dated as of June 20, 1996, by  Vulcan  to
   Chicago  Title  Company for the use and     benefit  of  Chemical
   Trust Company of California (incorporated by reference to Exhibit
   4.35 to the       Funding Corporation II Form S-4).

4.38   Deed  of  Trust, dated as of June 20, 1996, by  Elmore  to
   Chicago  Title  Company for the use and     benefit  of  Chemical
   Trust Company of California (incorporated by reference to Exhibit
   4.36 to the       Funding Corporation II Form S-4).

4.39   Deed  of Trust, dated as of June 20, 1996, by Leathers  to
   Chicago  Title  Company for the use and     benefit  of  Chemical
   Trust Company of California (incorporated by reference to Exhibit
   4.37 to the       Funding Corporation II Form S-4).

4.40   Deed of Trust, dated as of June 20, 1996, by Del Ranch  to
   Chicago  Title  Company for the use and     benefit  of  Chemical
   Trust Company of California (incorporated by reference to Exhibit
   4.38 to the       Funding Corporation II Form S-4).

4.41  Stock Pledge Agreement, Dated as of June 20, 1996, by CEOC,
   pledging  the  stock of Conejo,       Niguel and  San  Felipe  in
   favor of Chemical Trust Company of California for the benefit  of
   the    Secured  Parties and the Funding Corporation (incorporated
   by  reference to Exhibit 4.39 to the       Funding Corporation II
   Form S-4).

4.42   Stock Pledge Agreement, dated as of June 20, 1996, by VPC,
   pledging the stock of BNG in favor of     Chemical Trust  Company
   of  California  for the benefit of the Secured  Parties  and  the
   Funding      Corporation  (incorporated by reference  to  Exhibit
   4.40 to the Funding Corporation II Form S-4).

4.43  Partnership Interest Pledge Agreement, dated as of June 20,
   1996,  by  VPC  and BNG, pledging the  partnership  interests  in
   Vulcan  in favor of Chemical Trust Company of California for  the
   benefit  of  the     Secured Parties and the Funding  Corporation
   (incorporated  by reference to Exhibit 4.41  to  the      Funding
   Corporation II Form S-4).

4.44     Partnership Interest Pledge Agreement, dated as of  June
  20,  1996,  by  Magma,  CEOC and each of  Conejo,  Niguel,  San
  Felipe, respectively, pledging the partnership interests in Del
  Ranch,  Elmore and Leathers, respectively, in favor of Chemical
  Trust Company of California for the benefit of the      Secured
  Parties and the Funding Corporation (incorporated by reference to
  Exhibit 4.42 to the Funding Corporation II Form S-4).

4.45   Agreement regarding Security Documents, dated as  of  June
   20,  1996, by and among the Initial  Guarantors, Magma, SSPC, the
   Funding  Corporation  and Chemical Trust  Company  of  California
   (incorporated  by  reference  to  Exhibit  4.43  to  the  Funding
   Corporation II Form S-4).

10.1(a)     Salton  Sea  Deed  of  Trust,  Assignment  of  Rents,
    Security  Agreement and Fixture Filing, dated as of July  21,
    1995,  by  SSBP, SSPG and Fish Lake to Chicago Title  Company
    for  the  use  and  benefit  of  Chemical  Trust  Company  of
    California (incorporated by reference to Exhibit 10.1 to  the
    Funding Corporation Form S-4) .

10.1(b)      First  Amendment  to  Salton  Sea  Deed  of   Trust,
   Assignment  of  Rents, Security Agreement and  Fixed      Filing,
   dated as of June 20, 1996, by SSBP, SSPG and Fish Lake to Chicago
   Title Company for the   use and benefit of Chemical Trust Company
   of California (incorporated by reference to Exhibit   10.2 to the
   Funding Corporation II Form S-4).

10.2Collateral  Assignment of Southern California Edison  Company
    Agreements, dated as of July 21, 1995, by SSPG and Fish  Lake
    in   favor   of   Chemical   Trust  Company   of   California
    (incorporated  by reference to Exhibit 10.2  to  the  Funding
    Corporation Form S-4).

10.3Contract  for  the Purchase and Sale of Electric  Power  from
    the  Salton Sea Geothermal Facility, dated May 9,  1987  (the
    "Unit   1   Power  Purchase  Agreement"),  between   Southern
    California   Edison   Company   and   Earth   Energy,    Inc.
    (incorporated  by reference to Exhibit 10.3  to  the  Funding
    Corporation Form S-4).

10.4Amendment  No.  1  to  the Unit 1 Power  Purchase  Agreement,
    dated  as  of  March  30, 1993, between  Southern  California
    Edison  Company  and  Earth  Energy,  Inc.  (incorporated  by
    reference to Exhibit 10.4 to the Funding Corporation Form  S-
    4).

10.5Amendment  No.  2  to Unit 1 Power Purchase Agreement,  dated
    November   29,  1994,  between  Southern  California   Edison
    Company  and SSPG (incorporated by reference to Exhibit  10.5
    to the Funding Corporation Form S-4).

10.6Contract  for the Purchase and Sale of Electric Power,  dated
    April  16,  1985  (the  "Unit 2 Power  Purchase  Agreement"),
    between  Southern California Edison Company and  Westmoreland
    Geothermal  Associates (incorporated by reference to  Exhibit
    10.6 to the Funding Corporation Form S-4).

10.7Amendment No. 1 to Unit 2 Power Purchase Agreement, dated  as
    of  December  18,  1987, between Southern  California  Edison
    Company and Earth Energy, Inc. (incorporated by reference  to
    Exhibit 10.7 to the Funding Corporation Form S-4).

10.8Power  Purchase Contract, dated April 16, 1985 (the  "Unit  3
    Power   Purchase  Agreement"),  between  Southern  California
    Edison   Company   and  Union  Oil  Company   of   California
    (incorporated  by reference to Exhibit 10.8  to  the  Funding
    Corporation Form S-4).

10.9Power   Purchase   Contract  (the  "Unit  4  Power   Purchase
    Agreement"),  dated  November  29,  1994,  between   Southern
    California  Edison Company, SSPG and Fish Lake  (incorporated
    by  reference to Exhibit 10.9 to the Funding Corporation Form
    S-4).

10.10      Plant Connection Agreement (Unit 2), dated October  3,
    1989,  between  the  Imperial Irrigation District  and  Earth
    Energy,  Inc. (incorporated by reference to Exhibit 10.10  to
    the Funding Corporation Form S-4).

10.11      Plant Connection Agreement, dated August 2, 1988 (Unit
    3),  between  the  Imperial Irrigation  District  and  Desert
    Power Company (incorporated by reference to Exhibit 10.11  to
    the Funding Corporation Form S-4).

10.12      Imperial  Irrigation District Funding and Construction
    Agreements as amended (Units 2 and 3), dated as of  June  29,
    1987,  among the Imperial Irrigation District, Earth  Energy,
    Inc.,  Chevron  Geothermal Company of  California,  Geo  East
    Mesa  No. 3, Inc., Magma Power Company, Desert Power Company,
    Geo  East Mesa No. 2, Inc., Heber Geothermal Company,  Ormesa
    Geothermal, Ormesa Geothermal II, Vulcan/BN Geothermal  Power
    Company,  Union  Oil Company of California, Del  Ranch  L.P.,
    Elmore   L.P.,   Leathers  L.P.,  Geo   East   Mesa   Limited
    Partnership  and Imperial Resource Recovery Associates,  L.P.
    (incorporated  by reference to Exhibit 10.12 to  the  Funding
    Corporation Form S-4).

10.13      Transmission Service Agreement, dated as of October 3,
    1989  (Unit 2), between the Imperial Irrigation District  and
    Earth  Energy,  Inc.  (incorporated by reference  to  Exhibit
    10.13 to the Funding Corporation Form S-4).

10.14      Transmission Service Agreement, dated as of August  2,
    1988  (Unit 3), between the Imperial Irrigation District  and
    Desert  Power Company (incorporated by reference  to  Exhibit
    10.14 to the Funding Corporation Form S-4).

10.15      Plant Connection Agreement (Unit 4), dated as of  July
    14,  1995,  by and between the Imperial Irrigation  District,
    SSPG  and  Fish  Lake (incorporated by reference  to  Exhibit
    10.15 to the Funding Corporation Form S-4).

10.16      Letter  Agreement,  dated February  2,  1995,  between
    Magma  Power  Company  and the Imperial  Irrigation  District
    (incorporated  by reference to Exhibit 10.16 to  the  Funding
    Corporation Form S-4).

10.17      Transmission Service Agreement (Unit 4), dated  as  of
    July  14,  1995,  by  and  between  the  Imperial  Irrigation
    District,  SSPG and Fish Lake (incorporated by  reference  to
    Exhibit 10.17 to the Funding Corporation Form S-4).

10.18      Transmission  Line  Construction Agreement  (Unit  4),
    dated   July   14,  1995,  between  the  Imperial  Irrigation
    District,  SSPG and Fish Lake (incorporated by  reference  to
    Exhibit 10.18 to the Funding Corporation Form S-4).

10.19      Funding  Agreement,  dated June  15,  1988  (Unit  2),
    between  Southern California Edison Company and Earth Energy,
    Inc.  (incorporated  by reference to  Exhibit  10.19  to  the
    Funding Corporation Form S-4).

10.20      Second  Amended  and Restated Administrative  Services
    Agreement,  by  and  among CEOC, SSBP, SSPG  and  Fish  Lake,
    dated  as  of  July 15, 1995 (incorporated  by  reference  to
    Exhibit 10.20 to the Funding Corporation Form S-4).

10.21      Second  Amended and Restated Operating and Maintenance
    Agreement,  dated  as of July 15, 1995, by  and  among  Magma
    Power  Company,  SSBP,  SSPG and Fish Lake  (incorporated  by
    reference to Exhibit 10.21 to the Funding Corporation Form S-
    4).


10.22         Intentionally Omitted.

10.23 Collateral Assignment of Southern California Edison Company
   Agreements,  dated  as of June 20,    1996,  by  Vulcan,  Elmore,
   Leathers  and  Del  Ranch in favor of Chemical Trust  Company  of
   California   (incorporated by reference to Exhibit 10.23  to  the
   Funding Corporation II Form S-4).

10.24  Administrative Services Agreement, dated as  of  June  17,
   1996, between CEOC and Vulcan       (incorporated by reference to
   Exhibit 10.24 to the Funding Corporation II Form S-4).

10.25 Amended and Restated Construction, Operating and Accounting
   Agreement, dated as of June 17,     1996, between VPC and  Vulcan
   (incorporated  by  reference  to Exhibit  10.25  to  the  Funding
   Corporation II Form S-4).

10.26  Long Term Power Purchase Contract, dated March  1,
  1984,  as  amended, between SCE and Vulcan,   as  successor  to
  Magma  Electric Company (incorporated by reference  to  Exhibit
  10.26 to the Funding      Corporation II Form S-4).

10.27  Transmission Service Agreement, dated  December  1,  1988,
   between  VPC and IID (incorporated by      reference  to  Exhibit
   10.27 to the Funding Corporation II Form S-4).

10.28  Plant Connection Agreement, dated as of December 1,  1988,
   between  VPC and IID (incorporated by      reference  to  Exhibit
   10.28 to the Funding Corporation II Form S-4).

10.29           Amended  and  Restated  Administrative   Services
   Agreement,  dated  as of June 17, 1996  between       CEOC  and
   Elmore (incorporated by reference to Exhibit 10.29 to the Funding
   Corporation II Form S-4).

10.30  Amended and Restated Operating and Maintenance  Agreement,
   dated   as   of  June  17,  1996,     between  CEOC  and   Elmore
   (incorporated  by  reference  to Exhibit  10.30  to  the  Funding
   Corporation II    Form S-4).

10.31 Long Term Power Purchase Contract, dated June 15, 1984,  as
   amended,  between  SCE  and  Elmore,     as  successor  to  Magma
   Electric  Company (incorporated by reference to Exhibit 10.31  to
   the Funding       Corporation II Form S-4).

10.32 Transmission Service Agreement, dated as of August 2, 1988,
   as amended, between Elmore and IID  (incorporated by reference to
   Exhibit 10.32 to the Funding Corporation II Form S-4).

10.33  Plant  Connection Agreement, dated as of August  2,  1988,
   between  Elmore and IID (incorporated by   reference  to  Exhibit
   10.33  to the Funding Corporation II Form S-4).

10.34  Amended  and  Restated Administrative Services  Agreement,
   dated   as   of  June  17,  1996,  between   CEOC  and   Leathers
   (incorporated  by  reference  to Exhibit  10.34  to  the  Funding
   Corporation II Form     S-4).

10.35  Amended and Restated Operating and Maintenance  Agreement,
   dated   as  of  June  17,  1996,     between  CEOC  and  Leathers
   (incorporated  by  reference  to Exhibit  10.35  to  the  Funding
   Corporation       II Form S-4).

10.36  Long Term Power Purchase Contract, dated August 16,  1985,
   as  amended, between SCE and   Leathers, as successor to Imperial
   Energy Corporation (incorporated by reference to Exhibit 10.36 to
   the Funding Corporation II Form S-4).

10.37  Transmission  Service  Agreement,  dated  as   of
  October 3, 1989, as amended, between Leathers and
  IID  (incorporated  by reference to  Exhibit  10.37  to  the
  Funding Corporation II Form S-4).

10.38   Plant Connection Agreement, dated as of October  3,
  1989,  between Leathers and IID (incorporated      by reference
  to Exhibit 10.38 to the Funding Corporation II Form S-4).

10.39  Amended  and  Restated Administrative Services  Agreement,
   dated   as  of  June  17,  1996,  between   CEOC  and  Del  Ranch
   (incorporated  by  reference  to Exhibit  10.39  to  the  Funding
   Corporation II Form     S-4).

10.40  Amended and Restated Operating and Maintenance  Agreement,
   dated  as  of  June  17,  1996,    between  CEOC  and  Del  Ranch
   (incorporated  by  reference  to Exhibit  10.40  to  the  Funding
   Corporation II Form S-4).

10.41 Long Term Power Purchase Contract, dated February 22, 1984,
   as  amended, between SCE and Del     Ranch, as successor to Magma
   (incorporated  by  reference  to Exhibit  10.41  to  the  Funding
   Corporation II Form S-4).

10.42 Transmission Service Agreement, dated as of August 2, 1988,
   as   amended,  between  Del  Ranch  and    IID  (incorporated  by
   reference to Exhibit 10.42 to the Funding Corporation II Form  S-4).

10.43  Plant  Connection Agreement, dated as of August  2,  1988,
   between Del Ranch and IID (incorporated   by reference to Exhibit
   10.43 to the Funding Corporation II Form S-4).

10.44 Funding Agreement, dated May 18, 1990, between SCE and  Del
   Ranch  (incorporated  by reference    to  Exhibit  10.44  to  the
   Funding Corporation II Form S-4).

10.45  Funding  Agreement, dated May 18, 1990,  between  SCE  and
   Elmore  (incorporated by reference to      Exhibit 10.45  to  the
   Funding Corporation II Form S-4).

10.46  Funding  Agreement, dated June 15, 1990, between  SCE  and
   Leathers  (incorporated by reference to    Exhibit 10.46  to  the
   Funding Corporation II Form S-4).

10.47  Funding  Agreement, dated May 18, 1990,  between  SCE  and
   Leathers  (incorporated by reference to    Exhibit 10.47  to  the
   Funding Corporation II Form S-4).

10.48  Funding  Agreement, dated May 18, 1990,  between  SCE  and
   Vulcan  (incorporated by reference to      Exhibit 10.48  to  the
   Funding Corporation II Form S-4).

24. Power of Attorney

27. Financial Data Schedule.