UNITED STATES
                       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, 2000 Commission
                                File No. 33-95538

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

                  Delaware                                     47-0790493
                  --------                                     ----------
                 (State of                                    (IRS Employer
               Incorporation)                               Identification No.)

    Salton Sea Brine Processing L.P.     California             33-0601721
    Salton Sea Power Generation L.P.     California             33-0567411
    Fish Lake Power LLC                  Delaware               33-0453364
    Vulcan Power Company                 Nevada                 95-3992087
    CalEnergy Operating Corporation      Delaware               33-0268085
    Salton Sea Royalty LLC               Delaware               47-0790492
    VPC Geothermal LLC                   Delaware               91-1244270
    San Felipe Energy Company            California             33-0315787
    Conejo Energy Company                California             33-0268500
    Niguel Energy Company                California             33-0268502
    Vulcan/BN Geothermal Power Company   Nevada                 33-3992087
    Leathers, L.P.                       California             33-0305342
    Del Ranch, L.P.                      California             33-0278290
    Elmore, L.P.                         California             33-0278294
    Salton Sea Power L.L.C.              Delaware               47-0810713
    CalEnergy Minerals LLC               Delaware               47-0810718
    CE Turbo LLC                         Delaware               47-0812159
    CE Salton Sea Inc.                   Delaware               47-0810711
    Salton Sea Minerals Corp.            Delaware               47-0811261

                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)341-4500
                                                        --------------

         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 held by Magma  Power
Company.
       100 shares of Common Stock were outstanding on December 31, 2000.

                    Documents incorporated by reference: N/A


<PAGE>


                                TABLE OF CONTENTS

Part I    .....................................................................1
         Item 1.  Business.....................................................1
         The Projects..........................................................2
                  Salton Sea Projects..........................................3
                  Partnership Projects.........................................3
                  Zinc Recovery Project........................................3
                  Royalties and Royalty Projects...............................4
         Terms of the Securities...............................................4
         Securities............................................................4
         Structure of and Collateral for the Securities........................5
                  Payment of Interest and Principal............................6
                  Priority of Payments.........................................8
                  Debt Service Reserve Fund....................................9
                  Optional Redemption..........................................9
                  Mandatory Redemption.........................................9
                  Distributions................................................9
                  Incurrence of Additional Debt...............................10
                  Principal Covenants.........................................11
                  Equity Commitment...........................................11
                  The Project Notes...........................................11
                  Principal Credit Agreement Covenants........................11
                  Considerations Regarding Limitation on Remedies.............11
                  Power Price and Sales Uncertainty...........................12
                  Reliance on Single Utility Customer.........................12
                  Zinc Price and Sales Uncertainty............................14
                  Construction Uncertainty....................................14
                  Uncertainties Relating to Exploration and Development of
                        Geothermal Energy Resources...........................14
         Insurance............................................................14
         Regulatory and Environmental Matters.................................15
         Employees............................................................15
         Item 2.  Properties..................................................16
         Item 3.  Legal Proceedings...........................................16
         Item 4.  Submission of Matters to a Vote of Security Holders.........16

Part II  .....................................................................17
         Item 5.   Market for Registrant's Common Equity and Related
                        Stockholder's Matters.................................17
         Item 6.  Selected Financial Data.....................................17
                  Salton Sea Funding Corporation..............................17
                  Salton Sea Guarantors.......................................17
                  Partnership Guarantors......................................18
                  Royalty Guarantor...........................................18
         Item 7.  Management's Discussion and Analysis of Financial
                        Condition and Results of Operations...................18
                  Factors Affecting Results of Operations.....................18
                  Power Purchase Agreements...................................19
                  Capacity Utilizations.......................................20
                  Results of Operations for the Years Ended December 31,
                        1999, 1998 and 1997...................................21
         Item 7A. Qualitative and Quantitative Disclosures About Market Risk..26
                      Interest Rate Risk......................................26
         Item 8.   Financial Statements and Supplementary Data................27
         Item 9.   Changes in and Disagreements with Accountants on
                        Accounting and Financial Disclosure...................76

Part III .....................................................................77
         Item 10.    Directors and Executive Officers of the Registrant.......77
         Item 11.   Executive Compensation....................................79
         Item 12.   Security Ownership of Certain Beneficial Owners and
                        Management............................................79
         Item 13.   Certain Relationships and Related Transactions............79

Part IV  .....................................................................81
         Item 14.   Exhibits, Financial Statements Schedule and Reports on
                        Form 8-K..............................................81

Signatures....................................................................82



<PAGE>




PART I

Item 1.  Business

     Salton Sea Funding Corporation ("Funding Corporation") is a special purpose
Delaware corporation,  an indirect wholly-owned subsidiary of CE Generation, LLC
("CE  Generation"),  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) 341-4500.

     CE  Generation  owns  all of the  capital  stock  of  Magma  Power  Company
("Magma")  which in turn owns all of the  outstanding  capital  stock of Funding
Corporation. Through its subsidiaries, CE Generation is primarily engaged in the
development,  ownership and operation of environmentally responsible independent
power  production  facilities  in the United  States  utilizing  geothermal  and
natural gas resources.  CE Generation has an aggregate net ownership interest of
756 MW of  electrical  generating  capacity in power  plants in operation in the
United  States,  which have an aggregate net capacity of 816 MW  (including  its
interests  in the Salton Sea Projects  and the  Partnership  Projects as defined
below).

     All of the outstanding stock of Magma was contributed by MidAmerican Energy
Holdings  Company  ("MidAmerican")  to CE Generation in February  1999. In March
1999,  MidAmerican sold a 50% interest in CE Generation to El Paso CE Generation
Holding  Company,  which was merged into El Paso Merchant Energy Holding Company
on December 31, 2000, an affiliate of El Paso Corporation ("El Paso").

     Magma  directly  or  indirectly  owns  all  of  the  capital  stock  of  or
partnership interests in the Funding Corporation and the Guarantors,  except for
CalEnergy Minerals LLC ("Minerals LLC") and Salton Sea Minerals Corp., which are
owned by MidAmerican. The Guarantors are comprised of the Salton Sea Guarantors,
the Partnership Guarantors and the Royalty Guarantor.

     The  Salton  Sea  Guarantors  include  Salton  Sea  Brine  Processing  L.P.
("SSBP"),  Salton Sea Power  Generation  L.P.  ("SSPG")  Salton Sea Power L.L.C.
("Power LLC") and Fish Lake Power LLC ("Fish Lake")  (collectively,  the "Salton
Sea  Guarantors"),  which own five operating  geothermal power plants located in
Imperial  Valley,  California  known as Salton Sea I, Salton Sea II,  Salton Sea
III,  Salton Sea IV and Salton Sea V (such  projects  known as the  "Salton  Sea
Projects").

     The Partnership  Guarantors include the Vulcan/BN  Geothermal Power Company
("Vulcan"),  Elmore, L.P. ("Elmore"),  Leathers,  L.P. ("Leathers"),  Del Ranch,
L.P.  ("Del  Ranch")  and CE Turbo  LLC  ("Turbo  LLC"),  each of which  owns an
operating geothermal power plant located in Imperial Valley, California known as
the Vulcan Project,  the Elmore  Project,  the Leathers  Project,  the Del Ranch
Project and CE Turbo  Project,  respectively  (together  with the Zinc  Recovery
Project, the "Partnership  Projects").  The Partnership  Guarantors also include
CalEnergy  Minerals LLC ("Minerals LLC"),  which is constructing a zinc recovery
project in the Imperial Valley, California.  Finally, the Partnership Guarantors
include CalEnergy Operating Corporation ("CEOC"),  Vulcan Power Company ("VPC"),
San Felipe Energy  Company ("San  Felipe"),  Conejo Energy  Company  ("Conejo"),
Niguel Energy  Company  ("Niguel"),  VPC  Geothermal  LLC  ("VPCG"),  Salton Sea
Minerals Corp. and CE Salton Sea Inc. VPC and VPCG, 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.  Salton Sea  Minerals  Corporation  owns 100% of CalEnergy
Minerals LLC. CE Salton Sea Inc. owns Power LLC and Turbo LLC.

     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.

     Salton Sea Royalty LLC ("SSRC" or the "Royalty  Guarantor")  is the Royalty
Guarantor.   SSRC   received  an   assignment  of  certain  fees  and  royalties
("Royalties")  paid by three  Partnership  Projects,  Elmore,  Leathers  and Del
Ranch.
<PAGE>

     CEOC 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.

     The principal executive offices of the Salton Sea Guarantors are located at
302 South 36th Street,  Suites  400-B,  400-D,  400-E,  400-K and 400-N,  Omaha,
Nebraska 68131. The principal executive offices of the Partnership Guarantors is
302 South 36th Street,  Suite 400-F,  400-G,  400-I, 400-J, 400-L, 400-M, 400-N,
400-O, 400-P, 400-Q, 400-R, 400-S, 400-T, and 400-U, Omaha,  Nebraska 68131. The
principal  executive  office of the Royalty  Guarantor is 302 South 36th Street,
Suite 400-H,  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  projects  are  located  in the  Imperial  Valley,
California. The Salton Sea I-IV, Elmore, Leathers, Del Ranch and Vulcan projects
each contract to sell power to Southern California Edison Company ("Edison").
<TABLE>
<CAPTION>

                                                 DATE OF                                                                CONTRACT
  PROJECT                  FACILITY             COMMERICAL         CONTRACT      CONTRACT           POWER
                           CAPACITY(1)(2)       OPERATION          EXPIRATION      TYPE           PURCHASERS

Salton Sea Projects
<S>                         <C>                 <C>                 <C>         <C>            <C>
Salton Sea I                 10.0               7/1987              6/2017      Negotiated          Edison
Salton Sea II                20.0               4/1990              4/2020             SO4          Edison
Salton Sea III               49.8               2/1989             2/29/19             SO4          Edison
Salton Sea IV                39.6               6/1996              5/2026      Negotiated          Edison
Salton Sea V                 49.0               6/2000                 N/A             N/A     Energy Markets/
                                                                                               Zinc Recovery Project
Subtotal                    168.4
                            -----
</TABLE>
<TABLE>
<CAPTION>

Partnership Projects
<S>                         <C>                <C>                 <C>                 <C>     <C>
Vulcan                       34.0               2/1986              2/2016             SO4          Edison
Elmore                       38.0               1/1989             12/2018             SO4          Edison
Leathers                     38.0               1/1990             12/2019             SO4          Edison
Del Ranch                    38.0               1/1989             12/2018             SO4          Edison
CE Turbo                     10.0               8/2000                 N/A             N/A       Energy Markets/
Subtotal                    158.0                                                              Zinc Recovery Project
                            -----
Total Power Projects        326.4
                            ======
</TABLE>
<TABLE>
<CAPTION>

Zinc Recovery
<S>                        <C>                    <C>                  <C>             <C>             <C>
Project                    30,000                 2001                 N/A             N/A             N/A
                           ======
</TABLE>

(1) Power capacity varies with operating and reservoir conditions.
(2) Facility  Capacities are measured in MW; zinc recovery  project  capacity is
measured in estimated tons per year production.
<PAGE>

Salton Sea Projects

    The Salton Sea Guarantors  collectively  own the five  operating  Salton Sea
Projects with an aggregate net generating  capacity of  approximately  168.4 MW.
Four of the operating Salton Sea Projects have executed long term power purchase
agreements, providing for the sale of capacity and energy to Edison.

    The Salton Sea II and Salton Sea III power contracts provide for fixed price
capacity payments for the life of the contract,  and fixed price energy payments
for the first 10 years.  The fixed price energy periods  expired on February 13,
1999 for Salton Sea III and on April 4, 2000 for Salton Sea II. Thereafter,  the
energy  payments  paid by Edison are based on Edison's  then-current,  published
short-run avoided cost of energy.

    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.

    Salton Sea Unit V Project,  which commenced  operations in the third quarter
of  2000,  will  sell  approximately  one-third  of its net  output  to the Zinc
Recovery Project (defined below) which is is expected to commence  operations in
mid-2001. The remainder of the Salton Sea Unit V output in 2000 was sold through
other market transactions.

    Salton Sea I through V Projects  operated  at a combined  facility  capacity
factor of 94.2% in 1998,  91.9% in 1999 and 76.1% in 2000.  The decrease in 2000
is due to the extended overhauls that took place in 2000.

Partnership Projects

    All of the  Partnership  Projects,  except the CE Turbo Project and the Zinc
Recovery Project,  have executed Standard  Agreements  (called "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 fixed price energy
payments for the first 10 years.  The fixed price energy  periods for the Vulcan
Project,  the Del Ranch  Project,  the Elmore  Project and the Leathers  Project
expired on February 9, 1996,  December 31, 1998,  December 31, 1998 and December
31, 1999, respectively. Thereafter, the energy payments paid by Edison are based
on Edison's avoided cost of energy.

         The Turbo Project,  which commenced  commercial  operation in the third
quarter of 2000,  sold its output through other market  transactions.  The Turbo
Project may sell its output to the Zinc Recovery Project (defined below),  which
is expected to commence operations in mid-2001.

         On January  17,  2001,  Salton Sea Power and CE Turbo  entered  into an
agreement to sell available power from Salton Sea Unit V and CE Turbo to El Paso
Merchant Energy, L.P. ("EPME").  Under the terms of the agreement, at the option
of Salton Sea Power and CE Turbo,  EPME will purchase all  available  power from
Salton Sea Unit V and CE Turbo based on day ahead  price  quotes  received  from
EPME.

         The  Partnership  Projects  operated  at a combined  facility  capacity
factor of 101.3% in 1998, 103.4% in 1999, and 98.8% in 2000.

Zinc Recovery Project

     Minerals LLC, one of the Partnership  Guarantors,  is constructing the Zinc
Recovery  Project which will recover zinc from the  geothermal  brine (the "Zinc
Recovery  Project").  Facilities  are  being  installed  near the  Salton  Sea &
Partnership  Project  sites  to  extract  a  zinc  chloride  solution  from  the
geothermal  brine  through  an ion  exchange  process.  This  solution  will  be

<PAGE>

transported  to a central  processing  plant  where zinc ingots will be produced
through  solvent  extraction,  electrowinning  and casting  processes.  The Zinc
Recovery Project is designed to have a capacity of approximately 30,000 tons per
year  and is  scheduled  to  commence  commercial  operations  in  mid-2001.  In
September  1999,  Minerals LLC entered into a sales  agreement  whereby all high
grade zinc produced by the Zinc Recovery  Project will be sold to Cominco,  Ltd.
The initial term of the agreement expires in December 2005.

    The Zinc  Recovery  Project  is being  constructed  by  Kvaerner  U.S.  Inc.
("Kvaerner")  pursuant  to a date  certain,  fixed-price,  turnkey  engineering,
procurement  and   construction   contract  (the  "Zinc  Recovery   Project  EPC
Contract").  Kvaerner is a wholly-owned  indirect subsidiary of Kvaerner ASA, an
internationally  recognized engineering and construction firm experienced in the
metals, mining and processing  industries.  The payment obligations of Kvaerner,
including  payment of liquidated  damages of up to 20% of the contract price for
certain  delays or failures  to meet  performance  guarantees,  are secured by a
letter  of  credit  issued  by Union  Europeenne  de CIC (or  another  financial
institution  rated  "A" or  better  by S&P or  "A2" or  better  by  Moody's  and
otherwise  acceptable to Minerals LLC) in an initial  aggregate  amount equal to
$29.6 million.

Royalty Projects

    The  Royalty  Guarantor  has  received an  assignment  from Magma of certain
payments ("Royalties") received from the Leathers, Del Ranch and Elmore Projects
in exchange  for the  provision  to those  projects of the rights to use certain
geothermal resources. 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
Guarantors collateral.
<TABLE>
<CAPTION>
                                             ROYALTIES TO BE PAID TO                 ROYALTIES TO BE PAID TO
                                                ROYALTY GUARANTOR                     PARTNERSHIP GUARANTORS

PROJECT                 FACILITY        % ENERGY            % CAPACITY           % ENERGY         % CAPACITY
                        CAPACITY         REVENUES            REVENUES             REVENUES          REVENUES
                          (MW)
<S>                        <C>             <C>                   <C>                 <C>               <C>
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
                          ---
</TABLE>

                             Terms of the Securities

The Securities

     The Funding  Corporation is a special purpose Delaware  corporation  formed
for the sole  purpose  of  issuing  securities  in our  individual  capacity  as
principal and as agent acting on behalf of our  affiliates  which  guarantee the
Securities.

     The Funding Corporation has completed the following issuances and exchanges
of securities (together, the "Securities"):

     * On July 21, 1995,  the Funding  Corporation  issued (1)  $232,750,000  of
6.69% Senior  Secured Series A Notes Due 2000 (the "Series A  Securities"),  (2)
$133,000,000  of 7.37%  Senior  Secured  Series B Bonds Due 2005 (the  "Series B
Securities")  and (3)  $109,250,000  of 7.84% Senior  Secured Series C Bonds Due
2010 (the "Series C Securities"). The Series A Securities were repaid in full on
May 30, 2000.
<PAGE>

     * On June 20, 1996, the Funding  Corporation  issued (1) $70,000,000 of our
7.02% Senior Secured Series D Bonds Due 2000 (the "Series D Securities") and (2)
$65,000,000  of our 8.30% Senior  Secured Series E Bonds Due 2011 (the "Series E
Securities"). The Series D Securities were repaid in full on May 30, 2000.

     * On October 13, 1998, the Funding  Corporation issued  $285,000,000 of our
7.475% Senior Secured Series F Bonds Due 2018 (the "Series F Securities").

    The Securities have received ratings of "Caa2" by Moody's Investors Service,
Inc.  ("Moody's")  and "BBB-" by Standard & Poor's  Ratings Group  ("S&P").  The
Securities  will be  equivalent in right of payment and in the right to share in
the  collateral.  On December 31, 2000,  the aggregate  principal  amount of all
Securities outstanding was $544 million.

     The net proceeds  received by the Funding  Corporation from the issuance of
the  Securities  in the three  separate  offerings  (after  deduction of certain
transaction  costs)  were  approximately  $884  million  and were  loaned to the
Guarantors in return for the issuance of certain  notes (the  "Project  Notes"),
and were used for the  following  purposes:  (a)  approximately  $253 million to
repay certain  non-recourse  indebtedness of MidAmerican  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 IV 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,  (f)  approximately  $23 million to fund a
portion of the purchase price payable by the Initial Partnership  Guarantors for
the Acquired Partnership  Companies,  and (g) approximately $280 million to fund
in part construction of the Zinc Recovery  Project,  CE Turbo Project and Salton
Sea V Project, as well as associated capital improvements and finance costs.

     There is no existing  trading market for the Securities and there can be no
assurance  regarding the future  development of such a market for the Securities
or the  ability of holders of the  Securities  to sell their  Securities  or the
price at which  such  holders  may be able to sell their  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 Securities on any securities exchange or stock market.

Structure of and Collateral for the Securities

     The  Funding  Corporation  will make  payments on the  Securities  with the
principal of and interest paid on promissory  notes issued by the  Guarantors to
the Funding  Corporation (the "Project Notes").  The Securities are secured by a
pledge  of our  capital  stock  and  are  guaranteed  by the  Guarantors.  These
guarantees are secured by:

     * in the case of the guarantee  issued by the Salton Sea  Guarantors,  by a
lien on  substantially  all of the  assets of the Salton  Sea  Guarantors  and a
pledge of the equity interests in the Salton Sea Guarantors;

     * in the case of the guarantee issued by the Partnership  Guarantors,  by a
lien on substantially all of the assets of the Partnership Project Companies,  a
lien  on  the  equity  cash  flows  and  royalties  of the  Initial  Partnership
Guarantors  and a pledge  of the  stock of and  other  equity  interests  in the
Partnership Guarantors; and

     * in the case of the guarantee issued by the Royalty  Guarantor,  by a lien
on all royalties paid to the Royalty Guarantor and a pledge of the capital stock
of the Royalty Guarantor.

     The guarantees issued by the Salton Sea Guarantors are unlimited.  However,
the guarantees  issued by the Partnership  Guarantors and the Royalty  Guarantor
are limited to the following amounts:
<PAGE>

     * for any Initial Partnership Guarantor or the Royalty Guarantor, the total
equity  cash flows and  royalties  received  by the  Guarantor,  minus,  without
duplication,  (1) any royalties paid, (2) all operating and  maintenance  costs,
(3) all capital expenditures and (4) debt service;

     * for any Additional Partnership Guarantor,  the total revenues received by
the  Guarantor,  minus,  without  duplication  (1) any royalties  paid,  (2) all
operating  and  maintenance  costs,  (3) all capital  expenditures  and (4) debt
service.

     The structure has been designed to cross-collateralize cash flows from each
Guarantor  without   cross-collateralizing   all  of  the  Guarantors'   assets.
Therefore,  if a Guarantor  defaults under its guarantee or its promissory  note
issued to the  Funding  Corporation,  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  that  Guarantor's
obligations.   If,  however,  the  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 of the  collateral  and, if
different, the collateral pledged by the Salton Sea Guarantors.

     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 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  except the  guarantee  by  MidAmerican  for the direct and  indirect
owners of the Zinc Recovery Project of a specified portion of the scheduled debt
service on the Series F Securities  including  the current  principal  amount of
approximately  $140.5  million  and  associated  interest.   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.

Payment of Interest and Principal

    The interest payment dates for the Securities are May 30 and November 30.

    The remaining  balance of the $133,000,000  initial  principal amount of the
7.37% Series B Securities due May 30, 2005 is payable in semiannual installments
as follows:

    PAYMENT DATE                                    PERCENTAGE OF  INITIAL
                                                       PRINCIPAL AMOUNT
                                                    PAYABLE

    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%
<PAGE>

     The $109,250,000  initial principal amount of the 7.84% Series C Securities
due May 30, 2010 is 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 remaining  balance of the $65,000,000  initial  principal amount of the
8.30% Series E Securities due May 30, 2011 is payable in semiannual installments
as follows:

    PAYMENT DATE                                   PERCENTAGE OF  INITIAL
                                                      PRINCIPAL AMOUNT
                                                           PAYABLE

    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%
<PAGE>

    The $285,000,000  initial principal amount of the 7.475% Series F Securities
due November 30, 2018 is payable in semiannual installments,  commencing May 30,
2001 as follows:

  PAYMENT DATE                                             PERCENTAGE OF
                                                          PRINCIPAL AMOUNT
                                                              PAYABLE

May 30, 2001                                                   0.225%
November 30, 2001                                              0.225%
May 30, 2002                                                   0.750%
November 30, 2002                                              0.750%
May 30, 2003                                                   0.500%
November 30, 2003                                              0.500%
May 30, 2004                                                   0.625%
November 30, 2004                                              0.625%
May 30, 2005                                                   0.625%
November 30, 2005                                              0.625%
May 30, 2006                                                   0.650%
November 30, 2006                                              0.650%
May 30, 2007                                                   0.375%
November 30, 2007                                              0.375%
May 30, 2008                                                   0.875%
November 30, 2008                                              0.875%
May 30, 2009                                                   0.375%
November 30, 2009                                              0.375%
May 30, 2010                                                   1.250%
November 30, 2010                                              1.250%
May 30, 2011                                                   3.000%
November 30, 2011                                              3.000%
May 30, 2012                                                   5.750%
November 30, 2012                                              5.750%
May 30, 2013                                                   5.075%
November 30, 2013                                              5.075%
May 30, 2014                                                   6.000%
November 30, 2014                                              6.000%
May 30, 2015                                                   6.550%
November 30, 2015                                              6.550%
May 30, 2016                                                   7.050%
November 30, 2016                                              7.050%
May 30, 2017                                                   6.875%
November 30, 2017                                              6.875%
May 30, 2018                                                   3.450%
November 30, 2018                                              3.450%

Priority of Payments

    All  revenues  received  by the  Salton Sea  Guarantors  from the Salton Sea
Projects,  all revenues received by the Partnership Guarantors and all Royalties
received by the Royalty  Guarantor  shall be paid into a Revenue Fund maintained
by the depository agent. 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 letter of
credit  provider;  (d) to pay principal of debt service reserve letter of credit
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  letter of credit  loans,  and  indemnification  and other
expenses  to  the  secured  parties,   and  (g)  to  the  Distribution  Fund  or
Distribution Suspense Fund, as applicable.
<PAGE>

Debt Service Reserve Fund

    The Funding Corporation is obligated at all times to maintain a Debt Service
Reserve Fund and/or an  acceptable  letter of credit,  the Debt Service  Reserve
Fund is funded from available  funds in accordance with the priority of payments
until the aggregate amount of the fund and letter of credit are equal to:

    * through December 31, 1999, the maximum  semiannual  principal and interest
payments on the Securities for the remaining term of the Securities;

    * after December 31, 1999 through payment in full of the Initial  Securities
and the  Supplemental  Securities,  the maximum  annual  principal  and interest
payments on the Securities for the remaining term of the Securities; and

    * after  payment  in full of the  Initial  Securities  and the  Supplemental
Securities, (a) the maximum annual principal and interest payments on the Series
F Securities for the remaining  term or (b) if we obtain a  confirmation  of the
current ratings of the Securities, the maximum semiannual principal and interest
payments on the Series F Securities.

    The Debt Service Reserve Letter of Credit, which is being provided by Credit
Suisse First Boston,  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 resulting from drawings on such Debt Service Reserve Letter of
Credit.

Optional Redemption

    The Series B Securities, Series C Securities, Series E Securities and Series
F 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.

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) in certain  circumstances  if any New Project fails to achieve
substantial  completion by the applicable guaranteed substantial completion date
or receives  certain net performance  liquidated  damages under the construction
contract for such Project or (e) 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, 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;
<PAGE>

     (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 fund required balance or one or more Debt
         Service  Reserve  Letter  (or  Letters)  of  Credit  at least  equal to
         (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 of the  Securities;
         and

     (g) substantial  completion  of each New Project  shall have occurred on or
         prior to such New  Project's  guaranteed  substantial  completion  date
         unless the required  amount of  Securities  shall have been redeemed as
         described  above  under  "Mandatory  Redemption"  or  (ii)  the  rating
         agencies  shall have confirmed  that no rating  downgrade  would result
         from such  delay;  provided  that such  condition  will  apply to a New
         Project  only (x)  after  such  New  Project's  guaranteed  substantial
         completion date or (y) if such New Project has been abandoned.

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;
<PAGE>

     (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; and

     (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.

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

Principal Indenture Covenants

    Principal  covenants under the Indenture require the Funding  Corporation to
agree, except as permitted under the Indenture, (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.

Equity Commitment

    Pursuant to the Equity  Commitment  Agreement  executed by CE  Generation in
favor of the  Guarantors  and the  Collateral  Agent,  CE  Generation  agreed to
contribute  cash equity to the Guarantors in an amount of up to  $122,513,000 to
fund a portion of the budgeted  costs for  construction  of the New Projects and
Additional Capital Improvements.

The Project Notes

    The Salton Sea Guarantors  jointly and severally issued a Project Note in an
initial  principal amount of $325,000,000 and an additional  Project Note in the
amount of $83,272,000; the Partnership Guarantors jointly and severally issued a
Project  Note in an initial  principal  amount of  $75,000,000,  and  additional
Project Notes in amounts of $135,000,000 and $201,728,000, respectively, and the
Royalty  Guarantor  issued a  Project  Note in an  initial  principal  amount of
$75,000,000.

Principal Credit Agreement 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 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  were
distributed to MidAmerican to repay certain non-recourse  indebtedness  incurred
by  MidAmerican  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

<PAGE>

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.

Power Price and Sales Uncertainty

    The Power  Purchase  Agreements  pursuant to which each of the  Vulcan,  Del
Ranch,  Elmore,  Leathers,  Salton  Sea II and  Salton  Sea  III  Projects  sell
electricity  to Edison are SO4  Agreements.  These  agreements  provide for both
capacity  payments and energy  payments for a term of 30 years.  While the basis
for the  capacity  payment 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 fixed
price  periods  expired in February  1996 for Vulcan,  in December  1998 for Del
Ranch and  Elmore,  in February  1999 for Salton Sea III,  in December  1999 for
Leathers and in April 2000 for Salton Sea II.  Thereafter,  the required  energy
payment  converted  to  Edison's  avoided  cost of energy,  as  determined  by a
methodology approved by, and subject to change by, the California Public Utility
Commission.

    For the year ended December 2000 and 1999,  Edison's average avoided cost of
energy was 5.8 cents and 3.1 cents per kWh, respectively.  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 these agreements.

    Although approximately  one-third of the net electrical output of Salton Sea
V is expected to be sold for use by the Zinc Recovery  Project,  neither  Salton
Sea V nor the CE Turbo Project  currently has any power sales agreements for any
significant  portion of the capacity of such  Projects.  The strategy for Salton
Sea V and the CE Turbo Project is to sell output not needed by the Zinc Recovery
Project in short term transactions through established energy markets or in such
other  transactions  from  time to time as may be found to be more  advantageous
than those  conducted  through  established  energy  markets.  Energy prices are
expected to have the  characteristics of short term spot prices and to fluctuate
from time to time in a manner that cannot be predicted  with accuracy and is not
within the  control of the  Funding  Corporation,  the  Guarantors  or any other
person.

Reliance on Single Utility Customer

    Each of the Vulcan, Del Ranch, Elmore, Leathers and Salton Sea I-IV 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 may 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.

    Edison,  a  wholly-owned  subsidiary  of Edison  International,  is a public
utility primarily engaged in the business of supplying electric energy to retail
customers in Central and Southern California, excluding Los Angeles. The Funding
Corporation  is aware that there have been public  announcements  that  Edison's
financial condition has deteriorated as a result of reduced liquidity.  Based on
public  announcements,  the Funding Corporation  understands that Edison has not
made payments to other qualifying facilities ("QFs") from which Edison purchases
power and has not made  scheduled  payments  of debt  service.  Edison's  senior
unsecured  debt  obligations  are  currently  rated Caa2 (on watch for  possible
downgrade) by Moody's and D by S&P.
<PAGE>

    The Funding  Corporation is aware that there have been public  announcements
that Edison,  other industry  participants and governmental  entities have taken
actions in response to Edison's financial  condition.  These actions include the
following:

     o    The Federal Energy Regulatory  Commission ("FERC") has issued an order
          eliminating  requirements  that Edison and other California  utilities
          purchase power from the structured power market in California known as
          the  California  Power  Exchange  in order  to  provide  them  with an
          opportunity to obtain power from alternative sources at a lower cost.

     o    The State of  California  has enacted  legislation  to provide for the
          California  Department of Water Resources to purchase  wholesale power
          and sell it to retail  customers,  which will be funded by a surcharge
          on retail rates. The California  legislature is also considering other
          legislation  to improve  the  financial  condition  of the  California
          electric utilities.

     o    The  California  Public  Utilities   Commission  ("CPUC")  approved  a
          decision  on March 27, 2001 to increase  retail  electricity  rates by
          approximately  40%. In another  decision  that day,  the CPUC  ordered
          Edison  to pay the QFs on a go  forward  basis  within  15 days of the
          invoice and purportedly  modified the calculation of Short Run Avoided
          Cost.

     o    The State of  California  and  Edison  have  announced  a  preliminary
          agreement for the State to purchase Edison's  transmission  assets for
          $2.7  billion  and to allow  Edison to issue  bonds for a  substantial
          portion of its undercollection of revenues.

    The Funding Corporation can give no assurance as to the likely result of any
of the  actions  described  above or as to  whether  such  actions  will  have a
positive effect on the financial  condition of Edison or its willingness to make
payments under the Power Purchase Agreements.

    Edison  has  failed to pay  approximately  $76  million  due under the Power
Purchase  Agreements  for power  delivered  in November  and  December  2000 and
January 2001,  although the Power  Purchase  Agreements  provide for billing and
payment on a schedule  where payments would have normally been received in early
January,  February and March 2001.  Edison has not notified the Imperial  Valley
Projects as to when they can expect to receive these  payments.  This  continued
non-payment  by Edison could result in an untenable  situation for the continued
operation of the Imperial Valley Projects unless  additional  funds are obtained
in the near future.

    On February 21, 2001,  certain  Guarantors filed a lawsuit against Edison in
California's  Imperial  County  Superior  Court seeking a court order  requiring
Edison to make the required  payments under the Power Purchase  Agreements.  The
lawsuit  also  requested,  among other  things,  that the court order permit the
Guarantors to suspend deliveries of power to Edison and to permit the Guarantors
to sell such power to other purchasers in California.

    On March 22, 2001, the Superior Court granted Guarantors' Motion for Summary
Adjudication  and a  Declaratory  Judgment  ordering  that:  1) under  the Power
Purchase Agreements, Guarantors have the right to temporarily suspend deliveries
of  capacity  and energy to Edison,  2)  Guarantors  are  entitled to resell the
energy  and  capacity  to other  purchasers  and 3) the  interim  suspension  of
deliveries  to Edison shall not in any respect  result in the  modifications  or
termination of the Power Purchase  Agreements and the Power Purchase  Agreements
shall in all respects continue in full force and effect other than the temporary
suspension of deliveries to Edison.  The Guarantors  intend to vigorously pursue
their other remedies in this action in light of Edison's continuing non-payment.

    The Funding  Corporation  is hopeful  that the current  Edison  situation is
temporary and the proceedings in the legal, regulatory,  financial and political
arenas will lead to the improvement of Edison's financial  condition in the near
future  and the  payment  by Edison  of  amounts  due  under the Power  Purchase
Agreements. However, no assurance can be given that this will be the case.
<PAGE>

    As a result of  Edison's  failure to make the  payments  due under the Power
Purchase  Agreements  and the recent  downgrades  of  Edison's  credit  ratings,
Moody's has downgraded the ratings for the Securities to Caa2 (negative outlook)
and S&P has downgraded the ratings for the Securities to BBB- and has placed the
Securities on "credit watch negative". Accordingly, the Funding Corporation does
not  believe  it is  currently  able to obtain  funds in the  banking or capital
markets.

Zinc Price and Sales Uncertainty

     In September 1999,  Minerals LLC entered into a sales agreement whereby all
high grade zinc produced by the Zinc  Recovery  Project will be sold to Cominco,
Ltd. The initial term of the agreement expires in December 2005.

    Because most of the Zinc  Recovery  Project's  revenues will be derived from
the sale of zinc,  earnings will be directly related to the price of zinc in the
domestic and world markets.  However,  zinc prices fluctuate and are affected by
numerous factors,  including expectations of inflation,  speculative activities,
currency  exchange  rates,  interest  rates,  global  and  regional  demand  and
production,  political and economic conditions,  discovery of new deposits,  and
production  costs in major  producing  regions.  The  aggregate  effect of these
factors,  all of which are beyond the control of the Funding  Corporation or the
Guarantors, is impossible for the Funding Corporation to predict.

Construction Uncertainty

    Although  several of the power  projects have been operating for a number of
years, the Zinc Recovery Project is currently in construction  pursuant to fixed
price, date certain turnkey engineering,  procurement and construction  contract
and is subject to customary  risks  associated  with the  construction of metals
processing  plants  including  risks of delays in completion,  cost overruns and
failures to perform in accordance with contract  terms. In addition,  while each
of the  individual  process  steps to be utilized in the Zinc  Recovery  Project
(including  ion exchange,  solvent  extraction and  electrowinning)  has been in
operation for more than twenty years and the  demonstration  plant at the SSKGRA
has successfully  recovered zinc through this integrated process, the integrated
process for the production of zinc from geothermal  brine has not been attempted
in a large  scale  commercial  facility.  Any  material  unremedied  delay in or
unsatisfactory  completion  of the Zinc  Recovery  Project could have an adverse
effect on the applicable Guarantors' results of operations.

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.  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.
<PAGE>

    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 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, 2000, CEOC employed 201 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  Guarantors  are  provided  pursuant to the
administrative  services  agreements  described  below.   MidAmerican  employees
provide corporate level managerial,  financial,  accounting, technical and other
administrative   services  and  CEOC  employees   provide  certain   accounting,
purchasing and payroll services.
<PAGE>

Item 2.  Properties

    The Funding  Corporation  does not  separately own or lease office space but
has arranged for a separate suite at MidAmerican'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.
However,  the Guarantors  have filed a lawsuit  seeking a court order  requiring
Edison to make the required  payments under the Power Purchase  Agreements.  See
page 16.

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

    Not applicable.



<PAGE>

                                     Part II

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

    Not applicable.

Item 6.  Selected Financial Data

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 (in thousands).
<TABLE>
<CAPTION>

                                                             Year Ended December 31,
-------------------------------------------------------------------------------------------------------------------------------
                                          2000           1999        1998(1)          1997            1996 (2)
-------------------------------------------------------------------------------------------------------------------------------

<S>                                     <C>            <C>          <C>              <C>             <C>
Total revenues                           $43,718        $48,538      $39,329          $40,674         $40,567
Net income                                   174          1,123        1,783            1,461           1,821

Total assets                            $565,375       $585,648     $659,337         $474,289        $575,989
Senior secured notes and bonds           543,908        568,980      626,816          448,754         538,982
Total liabilities                        552,140        572,587      647,399          464,134         567,295
Total stockholder's equity                13,235         13,061       11,938           10,155           8,694
</TABLE>

(1) On October 13, 1998 Funding Corporation issued additional securities of $285
million of Salton  Sea Notes and Bonds  Series F. (2) On June 20,  1996  Funding
Corporation issued additional securities of $135 million 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  data  should  be read in
conjunction with the financial  statements and related notes and other financial
information appearing elsewhere in this Form 10-K (in thousands).
<TABLE>
<CAPTION>

                                                            Year Ended December 31,
--------------------------------------------------------------------------------------------------------------------------------
                                         2000(1)        1999           1998             1997       1996(2)
--------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>            <C>           <C>             <C>            <C>
Sales of electricity                  $  98,057      $  81,850     $  106,274      $  106,252     $ 90,982
Total revenues                           98,410         83,718        107,091         106,425       91,123
Net income                               28,323         23,045         45,939          42,816       35,031

Total assets                            645,263        633,014        628,515         556,353      565,934
Senior secured project note             284,217        293,954        310,030         266,208      299,840
Total liabilities                       313,768        329,842        348,388         322,165      374,562
</TABLE>

(1)  Salton Sea V commenced operations in the third quarter of 2000.
(2)   In June 1996, Salton Sea IV commenced operations.




<PAGE>


Partnership Guarantors

  The following  tables set forth  selected  historical  combined  financial and
operating  data  of the  Partnership  Guarantors.  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 (in thousands).
<TABLE>
<CAPTION>

                                                           Year Ended December 31,
------------------------------------------------------------------------------------------------------------------------
                                        2000(1)       1999         1998         1997       1996(2)
------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>          <C>          <C>          <C>          <C>
Sales of electricity                   $103,250     $105,921     $165,779     $158,125     $132,212
Total revenues                          108,184      114,988      172,565      162,315      140,226
Net income                               27,180       25,481       37,134       33,637       25,759

Total assets                            921,701      901,892      907,819      736,783      742,183
Senior secured project note             250,650      261,212      293,576      143,610      182,204
Total liabilities                       370,207      377,578      408,986      275,084      314,121
</TABLE>

(1)  Turbo commenced operations in the third quarter of 2000.
(2)  On April 17, 1996 the  remaining 50% interest of the  Partnership  Projects
     was acquired from Edison Mission Energy.

Royalty Guarantor

     The following tables set forth selected historical  financial and operating
data of the Royalty  Guarantor.  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 (in thousands).
<TABLE>
<CAPTION>

                                                         Year Ended December 31,
------------------------------------------------------------------------------------------------------------
                                         2000         1999        1998 (1)      1997          1996
------------------------------------------------------------------------------------------------------------
<S>                                     <C>          <C>           <C>         <C>          <C>
Total revenues                          $14,130      $26,274       $51,703     $32,231      $30,143
Net income                                7,352       19,222        19,497       8,661        4,769

Total assets                             73,670       71,116        77,432      86,009       91,073
Senior secured project note               9,041       13,814        23,210      38,934       56,936
Total liabilities                         9,098       13,896        39,434      67,508       81,233
</TABLE>

(1) In 1998, the Royalty Guarantor  received $25 million in a settlement related
to the Geo East Mesa payments.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Factors Affecting Results of Operations

     Funding  Corporation was organized for the sole purpose of acting as issuer
of senior secured notes and bonds.  On October 13, 1998,  June 20, 1996 and July
21, 1995,  the Funding  Corporation  issued $285 million,  $135 million and $475
million, respectively, 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.
<PAGE>

Power Purchase Agreements

     The Imperial Valley Projects  consists of the Partnership  Projects and the
Salton  Sea  Projects  located  in  the  Imperial  Valley  in  California.   The
Partnership  Projects  consists of the Vulcan,  Del Ranch,  Turbo,  Elmore,  and
Leathers Projects.  The Salton Sea Projects consists of Salton Sea I, Salton Sea
II, Salton Sea III, Salton Sea IV and Salton Sea V.

     Each of the Projects,  except for Turbo and Salton Sea V, 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 energy  payments,  capacity  payments and capacity  bonus  payments.
Edison makes fixed annual  capacity  payments and capacity bonus payments to the
projects to the extent that capacity  factors  exceed  certain  benchmarks.  The
price  for  capacity  is  fixed  for  the  life of the  SO4  Agreements  and are
significantly  higher in the months of June through  September.  Energy payments
are at increasing  fixed rates for the first ten years after firm  operation and
thereafter at a rate which is based on the cost that Edison avoids by purchasing
energy  from the project  instead of  obtaining  the energy  from other  sources
("Avoided Cost of Energy").

     The fixed energy price periods of the Partnership  Projects' SO4 Agreements
extended until February 1996 for the Vulcan  Partnership,  December 1998 for the
Del  Ranch  and  Elmore   Partnerships   and  December  1999  for  the  Leathers
Partnership.

     For 2000, the Partnership  Projects are receiving  Edison's Avoided Cost of
Energy pursuant to their respective SO4 Agreement.

     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 5.7 cents
per kWh during 2000. As the Salton Sea I PPA is not an SO4 Agreement, the energy
payments do not revert to Edison's Avoided Cost of Energy.  The capacity payment
is approximately $1.1 million 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 expired in April
2000 for  Salton  Sea II and  expired  in  February  1999 for Salton Sea III are
levelized at a time period weighted  average of 10.6 cents per kWh and 9.8 cents
per kWh for  Salton Sea II and Salton  Sea III,  respectively.  Thereafter,  the
monthly energy payments are at Edison's  Avoided Cost of Energy.  For Salton Sea
II only,  Edison is entitled to receive,  at no cost, 5% of all energy delivered
in  excess of 80% of  contract  capacity  through  March 31,  2004.  The  annual
capacity  and  bonus  payments  for  Salton  Sea  II  and  Salton  Sea  III  are
approximately $3.3 million and $9.7 million, 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.

    Salton Sea Unit V Project,  which commenced  operations in the third quarter
of 2000, will sell approximately one-third of its net output to a zinc facility,
which is owned by a  subsidiary  of  MidAmerican  and is  expected  to  commence
operations  in mid-2001.  The  remainder of the Salton Sea Unit V output in 2000
was sold through other market transactions.
<PAGE>

    The Turbo Project, which commenced commercial operation in the third quarter
of 2000,  sold its output through other market  transactions.  The Turbo Project
may sell its  output  to a zinc  facility,  which  is owned by a  subsidiary  of
MidAmerican and is expected to commence operations in mid-2001.

    On January 17, 2001, Salton Sea Power and CE Turbo entered into an agreement
to sell available  power from Salton Sea Unit V and CE Turbo to El Paso Merchant
Energy, L.P. ("EPME"). Under the terms of the agreement, at the option of Salton
Sea Power and CE Turbo,  EPME will purchase all available  power from Salton Sea
Unit V and CE Turbo based on day ahead price quotes received from EPME.

     For the year ended  December 31, 2000 and 1999,  Edison's  average  Avoided
Cost of Energy was 5.8 cents and 3.1 cents per kWh,  respectively.  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.

Capacity Utilizations

     For purposes of  consistency  in  financial  presentation,  plant  capacity
factors for Vulcan,  Del Ranch,  Turbo,  Elmore and Leathers plants are based on
capacity amounts of 34, 38, 10, 38, and 38 net MW  respectively,  and for Salton
Sea I,  Salton Sea II,  Salton Sea III,  Salton Sea IV, and Salton Sea V plants,
are based on  nominal  capacity  amounts of 10,  20,  49.8,  39.6 and 49 net MW,
respectively.  Each  plant  possesses  an  operating  margin  which  allows  for
production in excess of the amounts 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, Salton Sea IV and
Salton Sea V:

                                         Years Ended December 31,
-------------------------------------------------------------------------------
                                   2000            1999           1998
-------------------------------------------------------------------------------
  Overall capacity factor           76.1%           91.9%          94.2%
  Capacity NMW (weighted average)   146.1           119.4          119.4
  Kwh produced (in thousands)     976,500         960,800        985,500
-------------------------------------------------------------------------------

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

                                         Years Ended December 31,
-------------------------------------------------------------------------------
                                   2000            1999           1998
-------------------------------------------------------------------------------
  Overall capacity factor           98.8%           103.4%            101.3%
  Capacity NMW (weighted average)   152.1            148.0             148.0
  Kwh produced (in thousands)   1,320,300        1,339,900         1,313,900
-------------------------------------------------------------------------------

<PAGE>


Results of Operations for the Years Ended December 31, 2000, 1999 and 1998

Revenues

     The Salton Sea Guarantors' sales of electricity  increased to $98.1 million
for the year ended  December 31, 2000 from $81.9  million for the same period in
1999.  The  increase is due to the  addition of Salton Sea V and higher  avoided
cost rates.  The Salton Sea  Guarantors'  sales of electricity was $81.9 million
for the year ended  December  31, 1999  compared to $106.3  million for the same
period in 1998.  The  decrease was due to Salton Sea III reaching the end of its
fixed price period.

     The  Partnership  Guarantors'  sales of  electricity  decreased  to  $103.3
million for the year ended  December  31, 2000 from $105.9  million for the same
period in 1999,  a 2.5%  decrease.  The  decrease is due to the end of the fixed
price period at Leathers offset by the addition of Turbo and higher avoided cost
rates.  The  Partnership  Guarantors'  sales of electricity  decreased to $105.9
million for the year ended  December  31, 1999 from $165.8  million for the same
period in 1998, a 36.1% decrease.  This decrease was due to the end of the fixed
price period at Del Ranch and Elmore.

   Interest and other income for the  Partnership  Guarantors  decreased to $4.9
million  for the year ended  December  31,  2000 from $9.1  million for the same
period  in 1999.  Interest  and  other  income  for the  Partnership  Guarantors
increased to $9.1 million for the year ended December 31, 1999 from $6.8 million
for the same period in 1998.  The  decrease  from 1999 to 2000 and the  increase
from 1998 to 1999 was due to interest  income on the  restricted  cash balances.
These  balances  were  drawn  down  during  1999  and  2000 to pay  construction
invoices.

    The Royalty  Guarantor revenue decreased to $14.1 million for the year ended
December  31,  2000 from  $26.3  million  for the same  period in 1999 and $51.7
million for the same period in 1998. The decreases in royalty  revenue from 1998
to 1999 were  primarily  due to a decrease  in East Mesa  payments  related to a
settlement  agreement  in prior years.  The  decrease  from 1999 to 2000 was the
result of the lower energy sales at the Partnership  Projects resulting in lower
royalties and deferred  revenue of $9.3 million was realized related to the East
Mesa settlement in 1999.

Operating Expenses

     The Salton Sea  Guarantors'  operating  expenses,  which  include  royalty,
operating, and general and administrative  expenses,  increased to $40.8 million
for the year ended December 31, 2000,  from $28.8 million for the same period in
1999 and $30.3  million  for the same period in 1998.  The  increase in expenses
from 1999 to 2000 was due to higher  operating  costs  resulting from Salton Sea
Unit V start up activities and higher brine disposal costs.

     The Partnership  Guarantors'  operating  expenses,  which include  royalty,
operating, and general and administrative  expenses,  increased to $53.0 million
for the year ended December 31, 2000,  from $48.0 million for the same period in
1999 and $63.7  million for the same period in 1998.  The increase in costs from
1999 to 2000 was associated with zinc plant commissioning costs. The decrease in
costs from 1998 to 1999 was due  primarily to the  decreases in royalty  expense
due to lower revenue.

     The Royalty  Guarantor's  operating  expenses decreased to $3.9 million for
the year ended  December  31, 2000 from $4.6 million for the same period of 1999
and $8.1 million for the same period of 1998.  The decrease was due to scheduled
decreases  in third  party  lessor  royalties  related to the  decreases  in the
Partnership Projects' sales of electricity.

Depreciation and Amortization

     The Salton Sea Guarantors' depreciation and amortization decreased to $16.0
million for the year ended  December  31,  2000 from $16.9  million for the year
ended  December 31, 1999 and $14.9 million for the year ended December 31, 1998.
The  decrease  in 2000  was due to an  adjustment  in the  step-up  depreciation
charges offset by the addition of Salton Sea Unit V and the increase in 1999 was
due to an adjustment in the step up depreciation charges.
<PAGE>

     The Partnership  Guarantors'  depreciation  and  amortization  decreased to
$19.7  million for the year ended  December 31, 2000 from $22.6  million for the
same period in 1999 and $48.6 million for the same period in 1998.  The decrease
from 1999 to 2000 was  primarily due to reduced step up  depreciation  after the
end of the fixed price  periods for the Leathers  project as a result of greater
value being assigned to the scheduled  price periods for the contracts  relating
to these projects at the time of acquisition. The decrease from 1998 to 1999 was
due  primarily  to reduce the  step-up  depreciation  after the end of the fixed
price  periods  for the Del Ranch and  Elmore  projects  as a result of  greater
values being  assigned to the fixed price periods for the  contracts  related to
these projects at the time of the acquisitions.

     The Royalty Guarantor's amortization decreased to $2.0 million for the year
ended  December  31, 2000 from $7.1 million for the same period in 1999 and $9.8
million for the same  period in 1998.  The  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,
decreased  to $13.3  million  for the year ended  December  31,  2000 from $15.0
million  for the same  period  in 1999.  The  Salton  Sea  Guarantors'  interest
expense,  net of  capitalized  amounts,  decreased to $15.0 million for the year
ended  December  31, 1999 from $16.0  million  for the same period in 1998.  The
decrease  for both  periods was due  primarily  to higher  capitalized  interest
charges on the Salton Sea V construction costs and repayment of debt.

    The Partnership  Guarantors'  interest expense,  net of capitalized amounts,
decreased to $0.6 million for the year ended December 31, 2000 from $6.4 million
for the same period in 1999 and $3.6  million  for the same period in 1998.  The
decrease  from  1999  to  2000  is the  result  of the  repayment  of  debt  and
capitalization of interest on the mineral extraction project.  The increase from
1998 to 1999 is a result of the issuance of a $201.8  million of senior  secured
notes in October 1998.

     The Royalty Guarantors'  interest expense decreased to $1.0 million for the
year ended  December  31, 2000 from $1.7 million for the same period in 1999 and
$2.8  million  for the same  period  in  1998.  These  decreases  are due to the
repayment of debt.

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 decreased to $7.7 million
for the year ended  December 31, 2000 from $12.5  million for the same period in
1999 and $19.5  million for the same period in 1998.  The effective tax rate was
22%, 33%, and 34% in 2000, 1999, and 1998,  respectively.  The changes from year
to  year  in  the  effective  rate  are  due  primarily  to the  generation  and
utilization of energy tax credits and depletion deductions. Income taxes will be
paid by the parent of the Guarantors from distributions to the parent company by
the Guarantors which occur after payment of operating expenses and debt service.

     The Royalty Guarantor's had no income tax provision in 2000, the income tax
provision decreased to a benefit of $6.3 million for the year ended December 31,
1999 from an expense of $11.5 million for the same period in 1998.  The decrease
in the  provision  is  due  to  the  change  in  the  Royalty  Guarantor  from a
corporation to a limited liability company which is not taxed.  Income taxes are
the  responsibility  of the partners and Royalty  Guarantor has no obligation to
provide funds to the partners for payment or any tax  liabilities.  Accordingly,
the Royalty Guarantor has no tax obligations.

Net Income

     The Funding  Corporation's  net income was $0.2  million for the year ended
December 31, 2000 compared to $1.1 million for the year ended  December 31, 1999
and $1.8 million for the period  ended  December  31,  1998,  which  represented
interest   income  and  expense,   net  of  applicable   tax,  and  the  Funding
Corporation's 1% equity in earnings of the Guarantors.
<PAGE>

     The Salton Sea  Guarantors'  net income  increased to $28.3 million for the
year ended  December  31,  2000,  compared  to $23.0  million for the year ended
December 31, 1999 and $45.9 million for the year ended December 31, 1998.

     The Partnership  Guarantors' net income  decreased to $27.2 million for the
year ended  December  31,  2000,  compared  to $25.5  million for the year ended
December 31, 1999 and $37.1 million for the year ended December 31, 1998.

     The Royalty  Guarantor's net income  decreased to $7.4 million for the year
ended  December 31, 2000,  compared to $19.2 million for the year ended December
31, 1999 and $19.5 million for the year ended December 31, 1998.

Capital Resources and Liquidity

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

     CalEnergy Minerals LLC, a Partnership Guarantor ("Minerals LLC"), developed
and owns the rights to  proprietary  processes  for the  extraction of zinc from
elements  in  solution  in the  geothermal  brine  and  fluids  utilized  at the
company's  Imperial  Valley  plants.  A pilot  plant has  successfully  produced
commercial quality zinc at the Company's Imperial Valley Project.  The Company's
affiliates  intend to  sequentially  develop  facilities  for the  extraction of
manganese,  silver,  gold, lead, boron, lithium and other products as it further
develops  the  extraction   technology.   The  Company's   affiliates  are  also
investigating  producing  silica as an extraction  project.  Silica is used as a
filler for such products as paint, plastics and high temperature cement.

     Minerals LLC is constructing  the Zinc Recovery  Project which will recover
zinc from the geothermal brine (the "Zinc Recovery Project"). Facilities will be
installed  near the Imperial  Valley  Project  sites to extract a zinc  chloride
solution  from the  geothermal  brine  through  an ion  exchange  process.  This
solution will be  transported  to a central  processing  plant where zinc ingots
will  be  produced  through  solvent  extraction,   electrowinning  and  casting
processes.  The  Zinc  Recovery  Project  is  designed  to  have a  capacity  of
approximately  30,000  metric  tonnes  per year  and is  scheduled  to  commence
commercial  operations in mid-2001. In September 1999, Minerals LLC entered into
a sales  agreement  whereby all high grade zinc  produced  by the Zinc  Recovery
Project will be sold to Cominco,  Ltd. The initial term of the agreement expires
in December 2005.

     The Zinc  Recovery  Project is being  constructed  by  Kvaerner  U.S.  Inc.
("Kvaerner")  pursuant  to a date  certain,  fixed-price,  turnkey  engineering,
procurement  and   construction   contract  (the  "Zinc  Recovery   Project  EPC
Contract").  Kvaerner is a wholly-owned  indirect subsidiary of Kvaerner ASA, an
internationally  recognized engineering and construction firm experienced in the
metals,  mining  and  processing  industries.  Total  project  costs of the Zinc
Recovery  Project are expected to be approximately  $200.9 million.  The Company
has incurred $152.9 million of such costs through December 31, 2000.

    Edison,  a  wholly-owned  subsidiary  of Edison  International,  is a public
utility primarily engaged in the business of supplying electric energy to retail
customers in Central and Southern California, excluding Los Angeles. The Funding
Corporation  is aware that there have been public  announcements  that  Edison's

<PAGE>

financial condition has deteriorated as a result of reduced liquidity.  Based on
public  announcements,  the Funding Corporation  understands that Edison has not
made payments to other qualifying facilities ("QFs") from which Edison purchases
power and has not made  scheduled  payments  of debt  service.  Edison's  senior
unsecured  debt  obligations  are  currently  rated Caa2 (on watch for  possible
downgrade) by Moody's and D by S&P.

    The Funding  Corporation is aware that there have been public  announcements
that Edison,  other industry  participants and governmental  entities have taken
actions in response to Edison's financial  condition.  These actions include the
following:

     o    The Federal Energy Regulatory  Commission ("FERC") has issued an order
          eliminating  requirements  that Edison and other California  utilities
          purchase power from the structured power market in California known as
          the  California  Power  Exchange  in order  to  provide  them  with an
          opportunity to obtain power from alternative sources at a lower cost.

     o    The State of  California  has enacted  legislation  to provide for the
          California  Department of Water Resources to purchase  wholesale power
          and sell it to retail  customers,  which will be funded by a surcharge
          on retail rates. The California  legislature is also considering other
          legislation  to improve  the  financial  condition  of the  California
          electric utilities.

     o    The  California  Public  Utilities   Commission  ("CPUC")  approved  a
          decision  on March 27, 2001 to increase  retail  electricity  rates by
          approximately  40%. In another  decision  that day,  the CPUC  ordered
          Edison  to pay the QFs on a go  forward  basis  within  15 days of the
          invoice and purportedly  modified the calculation of Short Run Avoided
          Cost.

     o    The State of  California  and  Edison  have  announced  a  preliminary
          agreement for the State to purchase Edison's  transmission  assets for
          $2.7  billion  and to allow  Edison to issue  bonds for a  substantial
          portion of its undercollection of revenues.

    The Funding Corporation can give no assurance as to the likely result of any
of the  actions  described  above or as to  whether  such  actions  will  have a
positive effect on the financial  condition of Edison or its willingness to make
payments under the Power Purchase Agreements.

    Edison  has  failed to pay  approximately  $76  million  due under the Power
Purchase  Agreements  for power  delivered  in November  and  December  2000 and
January 2001,  although the Power  Purchase  Agreements  provide for billing and
payment on a schedule  where payments would have normally been received in early
January,  February and March 2001.  Edison has not notified the Imperial  Valley
Projects as to when they can expect to receive these  payments.  This  continued
non-payment  by Edison could result in an untenable  situation for the continued
operation of the Imperial Valley Projects unless  additional  funds are obtained
in the near future.

    On February 21, 2001,  certain  Guarantors filed a lawsuit against Edison in
California's  Imperial  County  Superior  Court seeking a court order  requiring
Edison to make the required  payments under the Power Purchase  Agreements.  The
lawsuit  also  requested,  among other  things,  that the court order permit the
Guarantors to suspend deliveries of power to Edison and to permit the Guarantors
to sell such power to other purchasers in California.

    On March 22, 2001, the Superior Court granted Guarantors' Motion for Summary
Adjudication  and a  Declaratory  Judgment  ordering  that:  1) under  the Power
Purchase Agreements, Guarantors have the right to temporarily suspend deliveries
of  capacity  and energy to Edison,  2)  Guarantors  are  entitled to resell the
energy  and  capacity  to other  purchasers  and 3) the  interim  suspension  of
deliveries  to Edison shall not in any respect  result in the  modifications  or
termination of the Power Purchase  Agreements and the Power Purchase  Agreements
shall in all respects continue in full force and effect other than the temporary
suspension of deliveries to Edison.  The Guarantors  intend to vigorously pursue
their other remedies in this action in light of Edison's continuing non-payment.

    The Funding  Corporation  is hopeful  that the current  Edison  situation is
temporary and the proceedings in the legal, regulatory,  financial and political
arenas will lead to the improvement of Edison's financial  condition in the near
future  and the  payment  by Edison  of  amounts  due  under the Power  Purchase
Agreements. However, no assurance can be given that this will be the case.
<PAGE>

     As a result of Edison's  failure to make the  payments  due under the Power
Purchase  Agreements  and the recent  downgrades  of  Edison's  credit  ratings,
Moody's has downgraded the ratings for the Securities to Caa2 (negative outlook)
and S&P has downgraded the ratings for the Securities to BBB- and has placed the
Securities on "credit watch negative". Accordingly, the Funding Corporation does
not  believe  it is  currently  able to obtain  funds in the  banking or capital
markets.

    On July 21,  1995,  Salton Sea  Funding  Corporation  obtained a $15 million
seven year revolving  credit  agreement  between Credit Suisse as bank and agent
and other lenders.  The interest rate is at the Adjusted Base Rate plus .375% or
at the LIBOR rate plus 100 basis  points.  On May 26,  2000,  Salton Sea Funding
Corporation borrowed $15 million under its revolving credit agreement.  The loan
was repaid in two  installments,  $5 million on July 26, 2000 and $10 million on
August 28, 2000.

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

Environmental Liabilities

     The Company may be exposed to environmental costs in the ordinary course of
business.  Expenditures for ongoing  compliance with  environmental  regulations
that relate to current  operations are expensed or  capitalized as  appropriate.
Expenditures that relate to an existing condition caused by past operations, and
which do not contribute to current or future revenue  generation,  are expensed.
Liabilities   are  recorded  when   environmental   assessments   indicate  that
remediation  efforts are  probable  and the costs can be  reasonably  estimated.
Estimates of the liability are based upon currently  available  facts,  existing
technology and presently enacted laws and regulations  taking into consideration
the likely  effects of  inflation  and other social and  economic  factors,  and
include  estimates of associated legal costs.  These amounts also consider prior
experience in remediating sites, other companies'  clean-up  experience and data
released by the Environmental  Protection Agency or other  organizations.  These
estimated  liabilities are subject to revision in future periods based on actual
costs or new circumstances,  and are included in the accompanying balance sheets
at  their  undiscounted   amounts.  As  of  December  31,  2000  and  1999,  the
environmental liabilities recorded on the balance sheet were not material.

Accounting Policy Change

     The Company is  considering  adopting a new policy of accounting  for major
maintenance,   overhaul  and  well  workover  costs.   These  costs  which  have
historically  been  accounted for using deferral  methods,  would be expensed as
incurred. As of January 1, 2001, the cumulative effect of this change would be a
decrease to net income of approximately $12.2 million, net of tax.

Accounting Pronouncements

     In June 1998, the Financial  Accounting  Standards Board (FASB) issued SFAS
133, "Accounting for Derivative  Instruments and Hedging Activities",  which was
delayed by SFAS 137 and amended by SFAS 138. SFAS 133/138  requires an entity to
recognize  all of  its  derivatives  as  either  assets  or  liabilities  in its
statement of financial  position and measure  those  instruments  at fair value.
Salton Sea Funding Corporation implemented the new standards on January 1, 2001.
The initial adoption of SFAS133/138 did not have a material impact on Salton Sea
Funding Corporation's financial position, results of operations or any impact on
its cash flows.

     The FASB's  Derivatives  Implementation  Group  continues  to identify  and
provide guidance on various  implementation  issues related to SFAS 133/138 that
are in varying stages of review and clearance by the  Derivative  Implementation
Group and  FASB.  Salton  Sea  Funding  Corporation  has not  determined  if the
ultimate  resolution  of  those  issues  would  have a  material  impact  on its
financial statements.
<PAGE>

Forward-Looking Statements

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

Item 7A.  Qualitative and Quantitative Disclosures About Market Risk

     The following  discussion of the Company's exposure to various market risks
contains  "forward-looking  statements"  that involve  risks and  uncertainties.
These  projected  results  have  been  prepared  utilizing  certain  assumptions
considered reasonable in the circumstances and in light of information currently
available to the Company.  Actual  results  could differ  materially  from those
projected in the forward-looking information.

Interest Rate Risk

     At December 31, 2000, the Funding Corporation had fixed-rate long-term debt
of $543.9 million in principal amount and having a fair value of $468.8 million.
These  instruments are fixed-rate and therefore do not expose the Company to the
risk of earnings loss due to changes in market interest rates. However, the fair
value of these  instruments  would  decrease by  approximately  $14.6 million if
interest  rates were to increase by 10% from their  levels at December 31, 2000.
In general,  such a decrease in fair value would impact  earnings and cash flows
only if the  Company  were to  reacquire  all or a portion of these  instruments
prior to their maturity.


<PAGE>


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...........................29

Balance sheets as of December 31, 2000 and 1999 ..............................30

Statements of operations for the three years ended December 31, 2000 .........31

Statements of stockholder's equity for the three years ended December

        31, 2000 .............................................................32

Statements of cash flows for the three years ended December 31, 2000 .........33

Notes to financial statements.................................................34


SALTON SEA GUARANTORS

Independent auditors' report--Deloitte & Touche LLP...........................38

Combined balance sheets as of December 31, 2000  and 1999.....................39

Combined statements of operations for the three years ended December

        31, 2000..............................................................40

Combined statements of Guarantors' equity for the three years ended

        December 31, 2000.....................................................41

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

        2000..................................................................42

Notes to combined financial statements........................................43


<PAGE>


PARTNERSHIP GUARANTORS

Independent auditors' report--Deloitte & Touche LLP...........................50

Combined balance sheets as of December 31, 2000 and 1999......................51

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

        2000..................................................................52

Combined statements of Guarantors' equity for the three years ended December

        31, 2000..............................................................53

Combined statements of cash flows for the three years ended December 31, 2000.54

Notes to combined financial statements........................................55


SALTON SEA ROYALTY LLC

Independent auditors' report--Deloitte & Touche LLP...........................66

Balance sheets as of December 31, 2000 and 1999...............................67

Statements of operations for the three years ended December 31, 2000..........68

Statements of equity for the three years ended December 31, 2000 .............69

Statements of cash flows for the three years ended December 31, 2000 .........70

Notes to financial statements.................................................71



<PAGE>


                          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, 2000 and 1999 and the  related  statements  of
operations,  stockholder's  equity and cash flows for each of the three years in
the  period  ended  December  31,  2000.  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  auditing  standards  generally
accepted in the United States of America.  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, 2000 and 1999 and the results of its  operations and its cash flows
for each of the three years in the period ended  December 31, 2000 in conformity
with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 18, 2001

(March 27, 2001 as to Note 4)

<PAGE>


                         SALTON SEA FUNDING CORPORATION
                                 BALANCE SHEETS

                (Dollars in Thousands, Except Per Share Amounts)

                                                        December 31,
--------------------------------------------------------------------------------
                                                          2000         1999
--------------------------------------------------------------------------------

ASSETS

Cash                                                    $  8,467      $   2,086
Prepaid expenses and other assets                          3,563          3,617
Due from affiliates                                          ---          2,118
Current portion secured project notes from Guarantors     23,658         25,072
                                                        --------      ----------
Total current assets                                      35,688         32,893

Secured project notes from Guarantors                    520,250        543,908
Investment in 1% of net assets of Guarantors               9,437          8,847
-----------                                             --------      ----------
                                                        $565,375      $ 585,648
                                                        ========      ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Accrued liabilities                                     $  3,479      $   3,607
Due to affiliates                                          4,753            ---
Current portion long term debt                            23,658         25,072
                                                        --------      ---------
Total current liabilities                                 31,890         28,679

Senior secured notes and bonds                           520,250        543,908
                                                        --------      ---------
    Total liabilities                                    552,140        572,587

Commitments and contingencies (Note 3 and 4)

Stockholder's equity:
Common stock--authorized 1,000
    shares, par value $.01 per share;
    issued and outstanding 100 shares                          -              -
Additional paid-in capital                                 5,366          5,366
Retained earnings                                          7,869          7,695
                                                        --------      ---------
    Total stockholder's equity                            13,235         13,061
                                                        --------      ---------
                                                        $565,375      $ 585,648
                                                        ========      =========


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


<PAGE>


                                           SALTON SEA FUNDING CORPORATION
                                              STATEMENTS OF OPERATIONS

                                               (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                        For the Year Ended December 31,
                                                    2000              1999             1998

----------------------------------------------------------------------------------------------
Revenues:

<S>                                                <C>              <C>               <C>
Interest income                                    $43,128          $47,815           $38,349
Equity in earnings of Guarantors                       590              723               980
                                                  --------       ----------         ---------
                                                    43,718           48,538            39,329
Expenses:

General and administrative expenses                    971              775               804
Interest expense                                    42,452           45,859            35,495
                                                  --------       ----------         ---------
Total expenses                                      43,423           46,634            36,299
                                                  --------       ----------         ---------
Income before income taxes                             295            1,904             3,030
Provision for income taxes                             121              781             1,247
                                                  --------       ----------         ---------
Net income                                        $    174          $ 1,123           $ 1,783
                                                  ========       ==========         =========
</TABLE>


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


<PAGE>


                         SALTON SEA FUNDING CORPORATION
                       STATEMENTS OF STOCKHOLDER'S EQUITY
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                                         Additional
                                                                          Common Stock    Paid-in     Retained Total
                                               Shares        Amount         Capital       Earnings        Equity
                                             --------      ----------     ------------   ------------     --------
<S>                                          <C>            <C>             <C>            <C>          <C>
Balance, January 1, 1998                          100       $      -        $ 5,366        $ 4,789      $  10,155

Net income                                          -              -              -          1,783          1,783
                                             --------        --------       --------       --------     ----------
Balance, December 31, 1998                        100              -          5,366          6,572         11,938

Net income                                          -              -              -          1,123          1,123
                                             --------        --------       --------       --------     ----------
Balance, December 31, 1999                        100              -          5,366          7,695         13,061

Net income                                          -              -              -            174            174
                                             --------        --------       --------       --------     ----------
Balance, December 31, 2000                        100       $      -        $ 5,366        $ 7,869      $  13,235
                                             ========       =========       ========       ========     ==========
</TABLE>


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


<PAGE>


                         SALTON SEA FUNDING CORPORATION
                            STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                          For the Years Ended December 31,
                                                                      2000              1999             1998
--------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:

<S>                                                           <C>                <C>              <C>
    Net income                                                   $      174         $   1,123        $   1,783
    Adjustments to reconcile net income to net
       cash flows from operating activities:
    Equity in earnings of Guarantors                                   (590)             (723)            (980)
    Changes in assets and liabilities:
       Prepaid expenses and other assets                                 54             3,151           (3,945)
       Accrued liabilities                                             (128)             (364)           1,189

                                                              -------------      ------------     ------------
    Net cash flows from operating activities                           (490)            3,187           (1,953)
                                                              -------------      ------------     ------------
Cash flows from investing activities:

    Secured project notes from Guarantors                               ---               ---         (285,000)
    Principal repayments of secured project
          notes from Guarantors                                      25,072            57,836          106,938
                                                               ------------      ------------     ------------
    Net cash flows from investing activities                         25,072            57,836         (178,062)
                                                               ------------      ------------     ------------
Cash flows from financing activities:
    Proceeds from offering of senior secured
       notes and bonds                                                  ---               ---          285,000
    Repayment of senior secured
       notes and bonds                                              (25,072)          (57,836)        (106,938)
    Due to affiliates                                                 6,871           (18,730)           4,014

                                                               ------------     -------------     ------------
    Net cash flows from financing activities                        (18,201)          (76,566)         182,076
                                                               ------------      ------------     ------------
Net change in cash                                                    6,381           (15,543)           2,061
Cash at the beginning of period                                       2,086            17,629           15,568

                                                               ------------      ------------     ------------
Cash at the end of period                                       $     8,467         $   2,086        $  17,629
                                                               ============      ============     ============
Supplemental disclosure:
    Interest paid                                               $    42,580         $ 46,210         $ 34,326
                                                               ============      ============     ============
    Income taxes paid                                           $       113         $    781         $  1,247
                                                               ============      ============     ============
</TABLE>

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


<PAGE>


                         SALTON SEA FUNDING CORPORATION
                          NOTES TO FINANCIAL STATEMENTS

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 was organized
for the sole purpose of acting as issuer of senior  secured notes and bonds.  On
July 21,  1995,  June 20,  1996 and October 31,  1998,  the Funding  Corporation
issued $475  million,  $135 million and $285  million,  respectively,  of Senior
Secured Notes and Bonds (collectively, the "Securities").

    The Funding Corporation is a wholly-owned subsidiary of Magma Power Company,
which  in  turn  was   wholly-owned  by  MidAmerican   Energy  Holdings  Company
("MidAmerican").  On February 8, 1999, MidAmerican created a new subsidiary,  CE
Generation  and  subsequently  transferred  its  interest in the Company and its
power  generation  assets in the Imperial Valley to CE Generation,  with certain
assets being retained by MidAmerican.  On March 3, 1999,  MidAmerican closed the
sale of 50% of its ownership interests in CE Generation to El Paso CE Generation
Holding  Company,  which was merged into El Paso Merchant Energy Holding Company
on December 31, 2000, an affiliate of El Paso Corporation.

    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,
LLC  (collectively  the  "Guarantors").  The  Guarantors are affiliates of Magma
Power Company and the Salton Sea Funding  Corporation who  collectively  own ten
operating  geothermal  power plants and a related zinc recovery plant located in
Imperial Valley,  California.  The guarantees of the Partnership  Guarantors and
the  Royalty   Guarantor  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.

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  accounting
principles   generally  accepted  in  the  United  States  of  America  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.
<PAGE>

Accounting Pronouncements

     In June 1998, the Financial  Accounting  Standards Board (FASB) issued SFAS
133, "Accounting for Derivative  Instruments and Hedging Activities",  which was
delayed by SFAS 137 and amended by SFAS 138. SFAS 133/138  requires an entity to
recognize  all of  its  derivatives  as  either  assets  or  liabilities  in its
statement of financial  position and measure  those  instruments  at fair value.
Salton Sea Funding Corporation implemented the new standards on January 1, 2001.
The initial adoption of SFAS133/138 did not have a material impact on Salton Sea
Funding Corporation's financial position, results of operations or any impact on
its cash flows.

     The FASB's  Derivatives  Implementation  Group  continues  to identify  and
provide guidance on various  implementation  issues related to SFAS 133/138 that
are in varying stages of review and clearance by the  Derivative  Implementation
Group and  FASB.  Salton  Sea  Funding  Corporation  has not  determined  if the
ultimate  resolution  of  those  issues  would  have a  material  impact  on its
financial statements.

3.  SENIOR SECURED NOTES AND BONDS

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

                 Senior Final Maturity            December 31, December 31,
             Secured Series   Date          Rate        2000     1999
July 21, 1995    A Notes  May 30, 2000      6.69%  $      --- $  18,532
July 21, 1995    B Bonds  May 30, 2005      7.37%     100,736   101,776
July 21, 1995    C Bonds  May 30, 2010      7.84%     109,250   109,250
June 20, 1996    D Notes  May 30, 2000      7.02%        ---      1,500
June 20, 1996    E Bonds  May 30, 2011      8.30%      48,922    52,922
October 13, 1998 F Bonds  November 30, 2018 7.475%    285,000   285,000
                                                      -------   --------
                                                     $543,908  $568,980

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

                  2001                             $  23,658
                  2002                                28,572
                  2003                                28,086
                  2004                                30,588
                  2005                                30,374
                  Thereafter                         402,630
                                                    --------
                                                   $ 543,908

     Pursuant to a depository agreement,  Funding Corporation established a debt
service  reserve  fund in the form of a letter of credit in the  amount of $67.6
million from which scheduled interest and principal payments can be made.

     The estimated fair values of the Senior Secured Notes and Bonds at December
31, 2000 and 1999 were $468.8 million and $540.7 million, respectively.

4.  CONTINGENCY

    Edison,  a  wholly-owned  subsidiary  of Edison  International,  is a public
utility primarily engaged in the business of supplying electric energy to retail
customers in Central and Southern California, excluding Los Angeles. The Funding
Corporation  is aware that there have been public  announcements  that  Edison's
financial condition has deteriorated as a result of reduced liquidity.  Based on
public  announcements,  the Funding Corporation  understands that Edison has not
made payments to other qualifying facilities ("QFs") from which Edison purchases
power and has not made  scheduled  payments  of debt  service.  Edison's  senior
unsecured  debt  obligations  are  currently  rated Caa2 (on watch for  possible
downgrade) by Moody's and D by S&P.
<PAGE>

    The Funding  Corporation is aware that there have been public  announcements
that Edison,  other industry  participants and governmental  entities have taken
actions in response to Edison's financial  condition.  These actions include the
following:

     o    The Federal Energy Regulatory  Commission ("FERC") has issued an order
          eliminating  requirements  that Edison and other California  utilities
          purchase power from the structured power market in California known as
          the  California  Power  Exchange  in order  to  provide  them  with an
          opportunity to obtain power from alternative sources at a lower cost.

     o    The State of  California  has enacted  legislation  to provide for the
          California  Department of Water Resources to purchase  wholesale power
          and sell it to retail  customers,  which will be funded by a surcharge
          on retail rates. The California  legislature is also considering other
          legislation  to improve  the  financial  condition  of the  California
          electric utilities.

     o    The  California  Public  Utilities   Commission  ("CPUC")  approved  a
          decision  on March 27, 2001 to increase  retail  electricity  rates by
          approximately  40%. In another  decision  that day,  the CPUC  ordered
          Edison  to pay the QFs on a go  forward  basis  within  15 days of the
          invoice and purportedly  modified the calculation of Short Run Avoided
          Cost.

     o    The State of  California  and  Edison  have  announced  a  preliminary
          agreement for the State to purchase Edison's  transmission  assets for
          $2.7  billion  and to allow  Edison to issue  bonds for a  substantial
          portion of its undercollection of revenues.

    The Funding Corporation can give no assurance as to the likely result of any
of the  actions  described  above or as to  whether  such  actions  will  have a
positive effect on the financial  condition of Edison or its willingness to make
payments under the Power Purchase Agreements.

    Edison  has  failed to pay  approximately  $76  million  due under the Power
Purchase  Agreements  for power  delivered  in November  and  December  2000 and
January 2001,  although the Power  Purchase  Agreements  provide for billing and
payment on a schedule  where payments would have normally been received in early
January,  February and March 2001.  Edison has not notified the Imperial  Valley
Projects as to when they can expect to receive these  payments.  This  continued
non-payment  by Edison could result in an untenable  situation for the continued
operation of the Imperial Valley Projects unless  additional  funds are obtained
in the near future.

    On February 21, 2001,  certain  Guarantors filed a lawsuit against Edison in
California's  Imperial  County  Superior  Court seeking a court order  requiring
Edison to make the required  payments under the Power Purchase  Agreements.  The
lawsuit  also  requested,  among other  things,  that the court order permit the
Guarantors to suspend deliveries of power to Edison and to permit the Guarantors
to sell such power to other purchasers in California.

    On March 22, 2001, the Superior Court granted Guarantors' Motion for Summary
Adjudication  and a  Declaratory  Judgment  ordering  that:  1) under  the Power
Purchase Agreements, Guarantors have the right to temporarily suspend deliveries
of  capacity  and energy to Edison,  2)  Guarantors  are  entitled to resell the
energy  and  capacity  to other  purchasers  and 3) the  interim  suspension  of
deliveries  to Edison shall not in any respect  result in the  modifications  or
termination of the Power Purchase  Agreements and the Power Purchase  Agreements
shall in all respects continue in full force and effect other than the temporary
suspension of deliveries to Edison.  The Guarantors  intend to vigorously pursue
their other remedies in this action in light of Edison's continuing non-payment.

    The Funding  Corporation  is hopeful  that the current  Edison  situation is
temporary and the proceedings in the legal, regulatory,  financial and political
arenas will lead to the improvement of Edison's financial  condition in the near
future  and the  payment  by Edison  of  amounts  due  under the Power  Purchase
Agreements. However, no assurance can be given that this will be the case.
<PAGE>

     As a result of SoCal  Edison's  failure to make the  payments due under the
Power  Purchase  Agreements and the recent  downgrades of SoCal Edison's  credit
ratings, Moody's has downgraded the ratings for the Securities to Caa2 (negative
outlook) and S&P has  downgraded  the ratings for the Securities to BBB- and has
placed the  Securities  on "credit  watch  negative".  Accordingly,  the Funding
Corporation does not believe it is currently able to obtain funds in the banking
or capital markets.

5.   REVOLVING CREDIT AGREEMENT

     On July 21,  1995,  Salton Sea Funding  Corporation  obtained a $15 million
seven year revolving  credit  agreement  between Credit Suisse as bank and agent
and other lenders.  The interest rate is at the Adjusted Base Rate plus .375% or
at the LIBOR rate plus 100 basis  points.  On May 26,  2000,  Salton Sea Funding
Corporation borrowed $15 million under its revolving credit agreement.  The loan
was repaid in two  installments,  $5 million on July 26, 2000 and $10 million on
August 28, 2000.


<PAGE>




                          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, 2000 and 1999, and the related combined statements
of operations,  Guarantors' equity and cash flows for each of the three years in
the  period  ended  December  31,  2000.  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  auditing  standards  generally
accepted in the United States of America.  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, 2000 and 1999 and the results of its  operations and its cash flows
for each of the three years in the period ended  December 31, 2000 in conformity
with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 18, 2001

(March 27, 2001 as to Note 6)




<PAGE>


                              SALTON SEA GUARANTORS
                             COMBINED BALANCE SHEETS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                                     December 31,
--------------------------------------------------------------------------------------------------------------
                                                                                2000              1999
--------------------------------------------------------------------------------------------------------------
ASSETS

<S>                                                                          <C>               <C>
Accounts receivable                                                          $  24,396         $  11,537
Prepaid expenses and other assets                                                8,699            11,695
                                                                                 -----            ------
Total current assets                                                            33,095            23,232

Restricted cash                                                                     17            10,001
Property, plant, contracts and equipment, net                                  566,577           552,903
Excess of cost over fair value of net assets acquired, net                      45,574            46,878
                                                                             ---------         ---------
                                                                             $ 645,263         $ 633,014
                                                                             =========         =========
LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                                                             $       5         $      33
Accrued liabilities                                                             10,826             7,862
Current portion of long term debt                                               17,319             9,737
                                                                             ---------         ---------
Total current liabilities                                                       28,150            17,632

Due to affiliates                                                               18,720            27,993
Senior secured project note                                                    266,898           284,217
                                                                             ---------         ---------
Total liabilities                                                              313,768           329,842

Commitments and contingencies (Notes 4, 5 and 6)

Total Guarantors' equity                                                       331,495           303,172
                                                                             ---------         ---------
                                                                             $ 645,263         $ 633,014
                                                                             =========         =========
</TABLE>

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


<PAGE>


                              SALTON SEA GUARANTORS
                        COMBINED STATEMENTS OF OPERATIONS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                              Year Ended  December 31,
-----------------------------------------------------------------------------------------------------------------
                                                                          2000           1999           1998
-----------------------------------------------------------------------------------------------------------------
Revenues:
<S>                                                                   <C>            <C>            <C>
Sales of electricity                                                  $   98,057     $   81,850     $  106,274
Interest and other income                                                    353          1,868            817
                                                                      ----------     ----------     ----------
Total Revenues                                                            98,410         83,718        107,091
                                                                      ----------     ----------     ----------
Expenses:
Operating, general and administrative expenses                            40,804         28,772         30,306
Depreciation and amortization                                             16,016         16,891         14,857
Interest expense                                                          23,075         24,251         21,730
Less capitalized interest                                                 (9,808)        (9,241)        (5,741)
                                                                      ----------    -----------     ----------
Total expenses                                                            70,087         60,673         61,152
                                                                      ----------     ----------     ----------
Net income                                                            $   28,323     $   23,045     $   45,939
                                                                      ==========     ==========     ==========

</TABLE>

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


<PAGE>


                              SALTON SEA GUARANTORS
                    COMBINED STATEMENTS OF GUARANTORS' EQUITY
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000
                             (Dollars in Thousands)

Balance, January 1, 1998            $ 234,188

Net income                             45,939
                                 ------------
Balance, December 31, 1998            280,127

Net income                             23,045
                                 ------------
Balance, December 31, 1999            303,172

Net income                             28,323
                                 ------------
Balance, December 31, 2000          $ 331,495
                                 ============

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


<PAGE>


                              SALTON SEA GUARANTORS
                        COMBINED STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                            Years Ended December 31,
-----------------------------------------------------------------------------------------------------------------
                                                                        2000             1999             1998
-----------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S>                                                              <C>               <C>              <C>
Net income                                                       $     28,323      $     23,045     $     45,939
Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation and amortization                                     16,016            16,891           14,857
     Changes in assets and liabilities:
       Accounts receivable                                            (12,859)            4,420             (134)
       Prepaid expenses and other assets                                2,996               715              633
       Accounts payable and accrued liabilities                         2,936               225             (546)
                                                                 ------------      ------------     ------------
Net cash flows from operating activities                               37,412            45,296           60,749
                                                                 ------------      ------------     ------------
Cash flows from investing activities:
Capital expenditures                                                  (28,386)          (88,197)         (15,845)
Decrease (Increase) in restricted cash                                  9,984            61,672          (71,673)
                                                                 ------------      ------------     ------------
Net cash flows from investing activities                              (18,402)          (26,525)         (87,518)
                                                                 ------------      ------------     ------------
Cash flows from financing activities:
Repayments of senior secured project note                              (9,737)          (16,076)         (39,450)
Proceeds from offering of senior secured
   project note                                                           ---               ---           83,272
Due to affiliates                                                      (9,273)           (2,695)         (17,053)
                                                                 ------------      ------------     ------------
Net cash flows from financing activities                              (19,010)          (18,771)          26,769
                                                                 ------------      ------------     ------------
Net change in cash                                                        ---               ---             ---
Cash at beginning of period                                               ---               ---             ---
                                                                 ------------      ------------     ------------
Cash at end of period                                            $        ---      $        ---     $       ---
                                                                 ============      ============     ============
Supplemental disclosure:
Cash paid for interest                                           $     21,871      $     24,394     $     21,434
                                                                 ============      ============     ============
</TABLE>

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


<PAGE>


                              SALTON SEA GUARANTORS
                     NOTES TO COMBINED FINANCIAL STATEMENTS

1. ORGANIZATION AND OPERATIONS

     Salton Sea  Guarantors  (the  "Guarantors")  (not a legal  entity) own 100%
interests in five operating  geothermal electric power generating plants (Salton
Sea I, II, III, IV and V)  (collectively,  the "Salton Sea Projects").  All five
plants  are  located  in the  Imperial  Valley of  California.  The  Salton  Sea
Guarantors  guarantee  loans  from  Salton  Sea  Funding  Corporation  ("Funding
Corporation"),  an  indirect  wholly-owned  subsidiary  of Magma  Power  Company
("Magma") which in turn was wholly-owned by MidAmerican  Energy Holdings Company
("MidAmerican").

     On February 8, 1999,  MidAmerican  created a new subsidiary,  CE Generation
LLC ("CE  Generation") and subsequently  transferred its interest in the Company
and its power  generation  assets in the Imperial Valley to CE Generation,  with
certain  assets being  retained by  MidAmerican.  On March 3, 1999,  MidAmerican
closed the sale of 50% of its ownership interests in CE Generation to El Paso CE
Generation  Holding  Company,  which was  merged  into El Paso  Merchant  Energy
Holding   Company  on  December  31,  2000,  an  affiliate  of  El  Paso  Energy
Corporation.

   The financial  statements  consist of the combination of (1) Salton Sea Brine
Processing,  L.P.,  a  California  limited  partnership  between  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, (3)
assets  and  liabilities  attributable  to  Salton  Sea IV which are held 99% by
Salton Sea Power Generation, L.P. and 1% by Fish Lake Power LLC ("FLPC") and (4)
Salton Sea Power L.L.C., a Delaware limited liability company. 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 CE Generation.

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 from sales
of electricity on an accrual basis. All of the Guarantors' sales of electricity,
except for Salton Sea V, are to Southern  California  Edison Company  ("Edison")
under long term power purchase  contracts.  During the first 10 years for Salton
Sea II and III, the  Guarantors  earn  payments for energy as scheduled in their
SO4 Agreements.  After the 10-year fixed 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 a rate which is based
on the cost that Edison avoids by purchasing  energy from the project instead of
obtaining the energy from other sources ("Avoided Cost of Energy").

   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 5.7 and 5.3
cents per kWh during 2000 and 1999, respectively. 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 $1.1 million per annum.
<PAGE>

   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 expired in April
2000 for Salton Sea II and in February  1999 for Salton Sea III are levelized at
a time period  weighted  average of 10.6 cents per kWh and 9.8 cents per kWh for
Salton Sea II and Salton Sea III, respectively.  Thereafter,  the monthly energy
payments are 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 $3.3 million and
$9.7 million, 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.

   For the year ended December 31, 2000 and 1999,  Edison's average Avoided Cost
of  Energy  was 5.8 cents and 3.1  cents  per kWh,  respectively.  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.

   If Edison was unable to perform,  the  Guarantors  could incur an  accounting
loss  equal to the  entire  accounts  receivable  balance  from  Edison of $16.1
million, at December 31, 2000.

    Salton Sea Unit V Project,  which commenced  operations in the third quarter
of 2000, will sell approximately one-third of its net output to a zinc facility,
which is owned by a  subsidiary  of  MidAmerican  and is  expected  to  commence
operations  in mid-2001.  The  remainder of the Salton Sea Unit V output in 2000
was sold through other market transactions.

    On January 17,  2001,  Salton Sea Power  entered  into an  agreement to sell
available  power  from  Salton  Sea  Unit V to El  Paso  Merchant  Energy,  L.P.
("EPME").  Under the terms of the agreement,  at the option of Salton Sea Power,
EPME will purchase all available power from Salton Sea Unit V based on day ahead
price quotes received from EPME.

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  Guarantors   will  use  to  fund  capital
expenditures.

Property, Plant, Contracts and Equipment

   Property, plant, contracts and equipment are carried at cost less accumulated
depreciation.  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 is computed on
the straight line method over the estimated  useful lives of the related assets,
which range from three to ten years.
<PAGE>

    Power sale agreements  have been assigned values  separately for each of (1)
the remaining  portion of the fixed 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.

    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, 2000 and 1999, accumulated amortization of the excess of
cost over fair value was $7.7 million and $6.4 million, respectively.

Capitalization of Interest and Deferred Financing Costs

    Prior to the  commencement  of  operations,  interest is  capitalized on the
costs of the plants and geothermal resource  development to the extent incurred.
Capitalized  interest and other deferred charges are amortized over the lives of
the related assets.

    Deferred  financing  costs  are  amortized  over  the  term  of the  related
financing using the effective interest method.

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.

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,  based on discounted cash flows or various models, whenever evidence
exists that the carrying value is not recoverable.

Use of Estimates

    The  preparation  of financial  statements  in  conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  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.
<PAGE>

Accounting Pronouncements

     In June 1998, the Financial  Accounting  Standards Board (FASB) issued SFAS
133, "Accounting for Derivative  Instruments and Hedging Activities",  which was
delayed by SFAS 137 and amended by SFAS 138. SFAS 133/138  requires an entity to
recognize  all of  its  derivatives  as  either  assets  or  liabilities  in its
statement of financial  position and measure  those  instruments  at fair value.
Salton Sea Funding Corporation implemented the new standards on January 1, 2001.
The initial adoption of SFAS133/138 did not have a material impact on Salton Sea
Funding Corporation's financial position, results of operations or any impact on
its cash flows.

     The FASB's  Derivatives  Implementation  Group  continues  to identify  and
provide guidance on various  implementation  issues related to SFAS 133/138 that
are in varying stages of review and clearance by the  Derivative  Implementation
Group and  FASB.  Salton  Sea  Funding  Corporation  has not  determined  if the
ultimate  resolution  of  those  issues  would  have a  material  impact  on its
financial statements.

      The Company is  considering  adopting a new policy of accounting for major
maintenance,   overhaul  and  well  workover  costs.   These  costs  which  have
historically been accounted for using the deferral method,  would be expensed as
incurred.  As of January 1, 2001 the cumulative effect of this change would be a
decrease to net income of approximately $5.0 million.

3.  PROPERTY, PLANT, CONTRACTS AND EQUIPMENT

    Property, plant, contracts and equipment consisted of the following:
                                                  December 31,
                                            2000                1999
                                         -----------       -----------
Plant and equipment                         $443,762           $333,109
Power sale agreements                         64,609             64,609
Mineral reserves                              90,119             86,762
Wells and resource development                43,585             43,584
                                         -----------       ------------
                                             642,075            528,064
Less accumulated depreciation
    and amortization                         (75,498)           (60,786)
                                         -----------       ------------
                                             566,577            467,278
Construction in progress:
Salton Sea V                                     ---             85,625
                                         -----------       ------------
                                            $566,577           $552,903
                                         ===========       ============

4. SENIOR SECURED PROJECT NOTE

    The Guarantors have a project note payable to Salton Sea Funding Corporation
with  interest  rates  ranging from 7.37% to 7.84%.  They have also  guaranteed,
along with other guarantors,  the debt of Salton Sea Funding Corporation,  which
amounted  to $543.9  million at  December  31,  2000.  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 (in
thousands):

                           2001                                 $ 17,319
                           2002                                   20,487
                           2003                                   22,765
                           2004                                   24,409
                           2005                                   23,917
                           Thereafter                            175,320
                                                               ---------
                                                                $284,217
                                                               =========
<PAGE>

    The estimated fair values of the senior  secured  projects notes at December
31, 2000 and 1999 were $249.8 million and $282.4 million, respectively.

5.  RELATED PARTY TRANSACTIONS

    The Guarantors have entered into the following agreements:

     o    Amended  and  Restated  Easement  Grant Deed and  Agreement  Regarding
          Rights for Geothermal Development dated February 23, 1994, as amended,
          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, 2000, 1999 and 1998 was $4.1 million,
          $3.7 million and $4.9 million, respectively.

     o    Administrative  Services  Agreement  dated  April 1, 1993 with  Magma,
          whereby Magma will provide  administrative and management  services to
          the Guarantors,  excluding  Salton Sea IV and V. Fees payable to Magma
          amount to 3% of total  electricity  revenues.  The amount expensed for
          the years ended  December  31, 2000,  1999 and 1998 was $1.4  million,
          $1.5 million and $2.3 million, respectively.

     o    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  2000,  1999  and  1998,  the  Guarantors  reimbursed  CEOC for
          expenses of $7.4 million, $6.7 million and $6.3 million, respectively.

     Salton Sea Power LLC ("Salton Sea Power"),  a Salton Sea Guarantor,  and El
Paso Merchant  Energy L.P.  ("EPME")  entered into a power  marketing  agreement
commencing  June 13,  2000 and ending on June 30,  2000.  Under the terms of the
agreement, EPME purchased and Salton Sea Power sold all available power from the
Salton Sea Unit V  project.  EPME sold the  available  power into the bulk power
market.  The  purchase  price of the  available  power is the  value of the cash
actually  received  by EPME  for  the  sale of such  power,  plus  any  realized
renewable premiums.

     On June 9, 2000,  Salton Sea Power,  entered  into an agreement to sell all
available  power from the Salton Sea Unit V project to EPME.  Under the terms of
the agreement  commencing on July 1, 2000 and ending on September 30, 2000, EPME
purchased  up to 25 MW of  available  power for $53 per MWh,  together  with any
premiums  related to such power.  EPME also marketed any  available  power which
exceeded 25 MW on behalf of Salton Sea Power.

     On September  29, 2000,  Salton Sea Power entered into an agreement to sell
all available power from the Salton Sea Unit V project to EPME.  Under the terms
of the agreement, commencing October 1, 2000 and ending September 30, 2001, EPME
will purchase all available  power and sell available  power on behalf of Salton
Sea Power, into the California ISO markets. The purchase price for the available
power shall be equivalent to the value actually received by EPME for the sale of
such power, including renewable premiums.

6.  CONTINGENCY

    Edison,  a  wholly-owned  subsidiary  of Edison  International,  is a public
utility primarily engaged in the business of supplying electric energy to retail
customers in Central and Southern California, excluding Los Angeles. The Funding
Corporation  is aware that there have been public  announcements  that  Edison's
financial condition has deteriorated as a result of reduced liquidity.  Based on
public  announcements,  the Funding Corporation  understands that Edison has not
made payments to other qualifying facilities ("QFs") from which Edison purchases
power and has not made scheduled payments of debt service. Edison's


<PAGE>


senior  unsecured  debt  obligations  are  currently  rated  Caa2 (on  watch for
possible downgrade) by Moody's and D by S&P.

    The Funding  Corporation is aware that there have been public  announcements
that Edison,  other industry  participants and governmental  entities have taken
actions in response to Edison's financial  condition.  These actions include the
following:

     o    The Federal Energy Regulatory  Commission ("FERC") has issued an order
          eliminating  requirements  that Edison and other California  utilities
          purchase power from the structured power market in California known as
          the  California  Power  Exchange  in order  to  provide  them  with an
          opportunity to obtain power from alternative sources at a lower cost.

     o    The State of  California  has enacted  legislation  to provide for the
          California  Department of Water Resources to purchase  wholesale power
          and sell it to retail  customers,  which will be funded by a surcharge
          on retail rates. The California  legislature is also considering other
          legislation  to improve  the  financial  condition  of the  California
          electric utilities.

     o    The  California  Public  Utilities   Commission  ("CPUC")  approved  a
          decision  on March 27, 2001 to increase  retail  electricity  rates by
          approximately  40%. In another  decision  that day,  the CPUC  ordered
          Edison  to pay the QFs on a go  forward  basis  within  15 days of the
          invoice and purportedly  modified the calculation of Short Run Avoided
          Cost.

     o    The State of  California  and  Edison  have  announced  a  preliminary
          agreement for the State to purchase Edison's  transmission  assets for
          $2.7  billion  and to allow  Edison to issue  bonds for a  substantial
          portion of its undercollection of revenues.

    The Funding Corporation can give no assurance as to the likely result of any
of the  actions  described  above or as to  whether  such  actions  will  have a
positive effect on the financial  condition of Edison or its willingness to make
payments under the Power Purchase Agreements.

    Edison  has  failed to pay  approximately  $76  million  due under the Power
Purchase  Agreements  for power  delivered  in November  and  December  2000 and
January 2001,  although the Power  Purchase  Agreements  provide for billing and
payment on a schedule  where payments would have normally been received in early
January,  February and March 2001.  Edison has not notified the Imperial  Valley
Projects as to when they can expect to receive these  payments.  This  continued
non-payment  by Edison could result in an untenable  situation for the continued
operation of the Imperial Valley Projects unless  additional  funds are obtained
in the near future.

    On February 21, 2001,  certain  Guarantors filed a lawsuit against Edison in
California's  Imperial  County  Superior  Court seeking a court order  requiring
Edison to make the required  payments under the Power Purchase  Agreements.  The
lawsuit  also  requested,  among other  things,  that the court order permit the
Guarantors to suspend deliveries of power to Edison and to permit the Guarantors
to sell such power to other purchasers in California.

    On March 22, 2001, the Superior Court granted Guarantors' Motion for Summary
Adjudication  and a  Declaratory  Judgment  ordering  that:  1) under  the Power
Purchase Agreements, Guarantors have the right to temporarily suspend deliveries
of  capacity  and energy to Edison,  2)  Guarantors  are  entitled to resell the
energy  and  capacity  to other  purchasers  and 3) the  interim  suspension  of
deliveries  to Edison shall not in any respect  result in the  modifications  or
termination of the Power Purchase  Agreements and the Power Purchase  Agreements
shall in all respects continue in full force and effect other than the temporary
suspension of deliveries to Edison.  The Guarantors  intend to vigorously pursue
their other remedies in this action in light of Edison's continuing non-payment.

    The Funding  Corporation  is hopeful  that the current  Edison  situation is
temporary and the proceedings in the legal, regulatory,  financial and political
arenas will lead to the improvement of Edison's financial  condition in the near
future  and the  payment  by Edison  of  amounts  due  under the Power  Purchase
Agreements. However, no assurance can be given that this will be the case.
<PAGE>

     As a result of Edison's  failure to make the  payments  due under the Power
Purchase  Agreements  and the recent  downgrades  of  Edison's  credit  ratings,
Moody's has downgraded the ratings for the Securities to Caa2 (negative outlook)
and S&P has downgraded the ratings for the Securities to BBB- and has placed the
Securities on "credit watch negative". Accordingly, the Funding Corporation does
not  believe  it is  currently  able to obtain  funds in the  banking or capital
markets.


<PAGE>



                          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, 2000 and 1999, and the related combined statements
of operations,  Guarantors' equity and cash flows for each of the three years in
the  period  ended  December  31,  2000.  These  financial  statements  are  the
responsibility of the Partnership Guarantors' management.  Our responsibility is
to express an opinion on these financial statements based on our audits.

    We conducted our audits in  accordance  with  auditing  standards  generally
accepted in the United States of America.  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, 2000 and 1999 and the results of its  operations and its cash flows
for each of the three years in the period ended  December 31, 2000 in conformity
with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 18, 2001

(March 27, 2001 as to Note 8A)



<PAGE>


                             PARTNERSHIP GUARANTORS
                             COMBINED BALANCE SHEETS
                             (Dollars in Thousands)
                                                              December 31,
--------------------------------------------------------------------------------
                                                         2000            1999
--------------------------------------------------------------------------------
ASSETS
Accounts receivable                                    $  28,319       $ 16,295
Prepaid expenses and other assets                         26,661         22,200
                                                       ---------       --------
Total current assets                                      54,980         38,495

Restricted cash                                              106         60,454
Property, plant, contracts and equipment, net            636,264        531,427
Management fee                                            70,855         71,489
Due from affiliates                                       35,066         72,033
Excess of fair value over net assets acquired, net       124,430        127,994
                                                       ---------       --------
                                                       $ 921,701       $901,892
                                                       =========       ========
LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                                       $     101       $  3,925
Accrued liabilities                                       17,722         13,534
Current portion of long term debt                          1,907         10,562
                                                       ---------       --------
Total current liabilities                                 19,730         28,021

Senior secured project note                              248,743        250,650
Deferred income taxes                                    101,734         98,907
                                                       ---------       --------
Total liabilities                                        370,207        377,578

Commitments and contingencies (Notes 4, 5 and 8)

Guarantors' equity:
Common stock                                                   3              3
Additional paid-in capital                               387,663        387,663
Retained earnings                                        163,828        136,648
                                                       ---------       --------
Total Guarantors' equity                                 551,494        524,314
                                                       ---------       --------
                                                       $ 921,701       $901,892
                                                       =========       ========


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


<PAGE>


                             PARTNERSHIP GUARANTORS
                        COMBINED STATEMENTS OF OPERATIONS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                                Years Ended December 31,
-----------------------------------------------------------------------------------------------------------------
                                                                           2000            1999           1998
-----------------------------------------------------------------------------------------------------------------
Revenues:
<S>                                                                    <C>            <C>            <C>
Sales of electricity                                                      $103,250       $105,921       $165,779
Interest and other income                                                    4,934          9,067          6,786
                                                                       -----------     ----------    -----------
Total revenues                                                             108,184        114,988        172,565

Costs and expenses:
Operating, general and administrative costs                                 52,996         47,967         63,717
Depreciation and amortization                                               19,743         22,566         48,615
Interest expense                                                            20,092         22,200         13,836
Less capitalized interest                                                  (19,521)       (15,773)       (10,266)
                                                                       -----------     ----------    -----------
Total expenses                                                              73,310         76,960        115,902
                                                                       -----------     ----------    -----------
Income before income taxes                                                  34,874         38,028         56,663
Provision for income taxes                                                   7,694         12,547         19,529
                                                                       -----------     ----------    -----------
Net income                                                                $ 27,180       $ 25,481       $ 37,134
                                                                       ===========     ==========    ===========
</TABLE>



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


<PAGE>


                             PARTNERSHIP GUARANTORS
                    COMBINED STATEMENTS OF GUARANTORS' EQUITY
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                      Additional
                                                Common Stock            Paid-in      Retained          Total
                                             Shares      Amount         Capital      Earnings         Equity
                                         ----------    ----------   ------------  ------------    ------------
<S>                                        <C>         <C>          <C>             <C>            <C>
Balance, January 1, 1998                          3    $        3       $387,663      $ 74,033        $461,699

Net income                                        -             -              -        37,134          37,134
                                           --------    ----------   ------------    ----------     -----------
Balance, December 31, 1998                        3             3        387,663       111,167         498,833

Net income                                        -             -              -        25,481          25,481
                                           --------    ----------   ------------    ----------    ------------
Balance, December 31, 1999                        3             3        387,663       136,648         524,314

Net income                                        -             -              -        27,180          27,180
                                           --------    ----------   ------------    ----------    ------------
Balance, December 31, 2000                        3    $        3       $387,663      $163,828        $551,494
                                           ========    ==========   ============    ==========    ============
</TABLE>


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


<PAGE>


                             PARTNERSHIP GUARANTORS
                        COMBINED STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                               Years Ended December 31,
-----------------------------------------------------------------------------------------------------------------
                                                                           2000               1999         1998
-----------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S>                                                                   <C>              <C>            <C>
 Net income                                                           $     27,180     $   25,481     $   37,134
 Adjustments  to  reconcile  net  income  to  net  cash
   provided  by  operating activities:
  Depreciation and amortization                                             19,743         22,566         48,615
  Deferred income taxes                                                      2,827          1,266         (9,210)
  Changes in assets and liabilities:
    Accounts receivable                                                    (12,024)        17,109         (9,923)
    Prepaid expenses and other assets                                       (4,461)         4,129         (9,967)
    Accounts payable and accrued liabilities                                   364           (310)        30,903
                                                                      ------------     ----------     ----------
Net cash flows from operating activities                                    33,629         70,241         87,552
                                                                      ------------     ----------     ----------
Cash flows from investing activities:
Capital expenditures                                                      (118,205)      (147,801)       (74,202)
Decrease (increase) in restricted cash                                      60,348        104,529       (164,983)
Management fee                                                              (2,177)        (2,704)        (1,514)
                                                                      ------------     ----------     ----------
Net cash flows from investing activities                                   (60,034)       (45,976)      (240,699)
                                                                      ------------     ----------     ----------
Cash flows from financing activities:
Repayments of senior secured project notes                                 (10,562)       (32,364)       (51,762)
Proceeds of offering from senior secured project notes                         ---            ---        201,728
Due from affiliates                                                         36,967          8,099          3,181
                                                                      ------------     ----------     ----------
Net cash flows from financing activities                                    26,405        (24,265)       153,147
                                                                      ------------     ----------     ----------
Net change in cash                                                             ---            ---            ---
Cash at beginning of period                                                    ---            ---            ---
                                                                      ------------     ----------     ----------
Cash at the end of period                                             $        ---     $      ---     $      ---
                                                                      ============     ==========     ==========
Supplemental disclosure:
Cash paid for interest                                                $     19,610     $   21,715     $   13,361
                                                                      ============     ==========     ==========
Income taxes paid                                                     $      4,867     $   11,281     $   28,739
                                                                      ============     ==========     ==========
</TABLE>

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


<PAGE>


                             PARTNERSHIP GUARANTORS
                     NOTES TO COMBINED FINANCIAL STATEMENTS

1. ORGANIZATION AND OPERATIONS

     Partnership  Guarantors (the "Guarantors") (not a legal entity) consists of
the combination of Vulcan Power Company ("VPC"), CalEnergy Operating Corporation
("CEOC"), both 99% owned by Magma Power Company ("Magma") and 1% owned by Salton
Sea Funding Corporation (the "Funding Corporation");  CE Turbo LLC ("CE Turbo"),
indirectly wholly-owned by Magma; and CalEnergy Minerals LLC, a Delaware limited
liability  company  ("Minerals LLC").  Minerals LLC is an indirect  wholly-owned
subsidiary of MidAmerican  Energy Holdings  Company  ("MidAmerican").  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 have guaranteed the loans to such  partnerships from
Funding Corporation,  an indirect  wholly-owned  subsidiary of Magma. Magma is a
wholly-owned  subsidiary of CE Generation LLC ("CE Generation"),  which is owned
equally by  MidAmerican  and El Paso CE Generation  Holding  Company,  which was
merged into El Paso  Merchant  Energy  Holding  Company on December 31, 2000, an
affiliate of El Paso Energy Corporation.

    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.

     Minerals LLC is constructing  the Zinc Recovery  Project which will recover
zinc from the  geothermal  brine (the "Zinc Recovery  Project").  Facilities are
being  installed  near Imperial  Valley Project sites to extract a zinc chloride
solution  from the  geothermal  brine  through  an ion  exchange  process.  This
solution will be  transported  to a central  processing  plant where zinc ingots
will  be  produced  through  solvent  extraction,   electrowinning  and  casting
processes.  The  Zinc  Recovery  Project  is  designed  to  have a  capacity  of
approximately  30,000  metric  tonnes  per year  and is  scheduled  to  commence
commercial operation in mid-2001. In September 1999, Minerals LLC entered into a
sales agreement  whereby all zinc produced by the Zinc Recovery  Project will be
sold to Cominco,  Ltd.  The initial  term of the  agreement  expires in December
2005.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

     The  accompanying  financial  statements  of  the  Guarantors  present  the
accounts of CEOC,  VPC, CE Turbo LLC and  Minerals  LLC 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.  All of the  Guarantors'  sales of
electricity,  except  for  Turbo,  are to  Southern  California  Edison  Company
("Edison") under long-term power purchase contracts.

   The Partnership Projects, except for Turbo, sell 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 a rate which is based on the cost that Edison
avoids by  purchasing  energy from the project  instead of obtaining  the energy
from other sources ("Avoided Cost of Energy").
<PAGE>

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

      For the year ended December 31, 2000 and 1999,  Edison's  average  Avoided
Cost of Energy was 5.8 cents and 3.1 cents per kWh,  respectively.  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.

       If Edison was unable to perform the Guarantors  could incur an accounting
loss  equal to the  entire  accounts  receivable  balance  from  Edison of $28.4
million, at December 31, 2000.

    The Turbo Project, which commenced commercial operation in the third quarter
of 2000,  sold its output through other market  transactions.  The Turbo Project
may sell its  output  to a zinc  facility,  which  is owned by a  subsidiary  of
MidAmerican and is expected to commence operations in mid-2001.

    On January 17, 2001,  CE Turbo  entered into an agreement to sell  available
power from CE Turbo to El Paso Merchant Energy,  L.P. ("EPME").  Under the terms
of the  agreement,  at the option of CE Turbo,  EPME will purchase all available
power from CE Turbo based on day ahead price quotes received from EPME.

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  Guarantors   will  use  to  fund  capital
expenditures.

Property, Plant, Contracts and Equipment

     Property,   plant,  contracts  and  equipment  are  carried  at  cost  less
accumulated  depreciation.  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 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 fixed 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.
<PAGE>

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, 2000 and 1999 accumulated  amortization of the excess of
cost over fair value of net assets acquired was $21.1 million and $17.5 million,
respectively.

Capitalization of Interest and Deferred Financing Costs

    Prior to the  commencement  of  operations,  interest is  capitalized on the
costs of the plants and geothermal resource  development to the extent incurred.
Capitalized  interest and other deferred charges are amortized over the lives of
the related assets.

    Deferred  financing  costs  are  amortized  over  the  term  of the  related
financing using the effective interest method.

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.

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,  based on discounted cash flows or various models, whenever evidence
exists that the carrying value is not recoverable.

Use of Estimates

    The  preparation  of financial  statements  in  conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  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.
<PAGE>

Accounting Pronouncements

     In June 1998, the Financial  Accounting  Standards Board (FASB) issued SFAS
133, "Accounting for Derivative  Instruments and Hedging Activities",  which was
delayed by SFAS 137 and amended by SFAS 138. SFAS 133/138  requires an entity to
recognize  all of  its  derivatives  as  either  assets  or  liabilities  in its
statement of financial  position and measure  those  instruments  at fair value.
Salton Sea Funding Corporation implemented the new standards on January 1, 2001.
The initial adoption of SFAS133/138 did not have a material impact on Salton Sea
Funding Corporation's financial position, results of operations or any impact on
its cash flows.

     The FASB's  Derivatives  Implementation  Group  continues  to identify  and
provide guidance on various  implementation  issues related to SFAS 133/138 that
are in varying stages of review and clearance by the  Derivative  Implementation
Group and  FASB.  Salton  Sea  Funding  Corporation  has not  determined  if the
ultimate  resolution  of  those  issues  would  have a  material  impact  on its
financial statements.

     The Company is  considering  adopting a new policy of accounting  for major
maintenance,   overhaul  and  well  workover  costs.   These  costs  which  have
historically been accounted for using the deferral method,  would be expensed as
incurred. As of January 1, 2001, the cumulative effect of this change would be a
decrease to net income of approximately $7.2 million, net of tax.

3. PROPERTY, PLANT, CONTRACTS AND EQUIPMENT

Property,  plant,  contracts  and  equipment  consisted  of  the  following  (in
thousands):
                                                         December 31,
------------------------------------------------------------------------------
                                                  2000                  1999
------------------------------------------------------------------------------
Plant and equipment                             $196,113             $ 116,316
Power sale agreements                            123,588               123,588
Process license                                   46,290                46,290
Mineral reserves                                 175,362               156,563
Wells and resource development                    95,570                95,329
                                              ----------            ----------
                                                 636,923               538,086
Less accumulated depreciation
    and amortization                            (153,592)             (140,224)
                                              ----------            ----------
                                                 483,331               397,862
Construction in progress:
Zinc recovery project                            152,933                92,794
Turbo and Region 2 brine facilities upgrade          ---                40,771
                                              ----------            ----------
                                              $ 636,264              $ 531,427
                                              ==========             =========
4. SENIOR SECURED PROJECT NOTE

     The  Guarantors   have  a  project  note  payable  to  Salton  Sea  Funding
Corporation  with  interest  rates  ranging from 7.37% to 8.30%.  They have also
guaranteed,  along  with  other  guarantors,  the  debt of  Salton  Sea  Funding
Corporation,  which  amounted  to $543.9  million  at  December  31,  2000.  The
guarantee is collateralized by a lien on the available cash flow of and a pledge
of  stock  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  (in
thousands):

                           2001                             $     1,907
                           2002                                   4,625
                           2003                                   5,017
                           2004                                   5,771
                           2005                                   6,022
                           Thereafter                           227,308
                                                             -----------
                                                            $   250,650
                                                                =======
<PAGE>

     The estimated  fair values of the senior  secured  project note at December
31, 2000 and 1999 were $210.6 million and $244.7 million, respectively.

5. 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  $709,000  and  $676,000,
respectively,  for the year ended  December  31, 2000,  $423,000  and  $472,000,
respectively,  for the year ended  December  31, 1999,  $363,000  and  $416,000,
respectively, for the year ended December 31, 1998, respectively.

     In addition, the Guarantors entered into the following agreements:

     o    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  2000,  1999 and 1998  were $9.6
          million, $11.9 million and $22.6 million, respectively.

     o    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 2000, 1999 and 1998 were
          $70,000 per year.

     o    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  $60,000  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 2000, 1999 and 1998
          amounted to $2.3 million, $2.7 million and $4.5 million, respectively.

     o    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 2000, 1999 and
          1998 reimbursed  CEOC for expenses of $10.6 million,  $7.5 million and
          $8.9 million,  respectively, and accrued a guaranteed capacity payment
          of $1.9  million,  $3.3 million and $4.7 million at December 31, 2000,
          1999 and 1998, respectively.

     On September  29, 2000,  CE Turbo LLC entered into an agreement to sell all
available power from the CE Turbo project to El Paso Merchant Energy.  Under the
terms of the  agreement,  commencing  October 1, 2000 and ending  September  30,
2001,  El Paso  Merchant  Energy  will  purchase  all  available  power and sell
available  power on behalf of CE Turbo,  into the  California  ISO markets.  The
purchase price for the available power shall be equivalent to the value actually
received  by El Paso  Merchant  Energy  for the  sale of such  power,  including
renewable premiums.
<PAGE>

6. CONDENSED FINANCIAL INFORMATION

Condensed  balance sheet information of the Guarantors' pro rata interest in the
respective  entities  as of  December  31,  2000  and  1999  is as  follows  (in
thousands):
<TABLE>
<CAPTION>

                                   Vulcan
                                   Power         CEOC        Elmore      Del Ranch     Leathers
                                ---------    ---------    ---------  -------------  -----------
December 31, 2000 Assets:

<S>                              <C>        <C>           <C>           <C>         <C>
Restricted cash                  $      -   $        -    $       -     $        -  $         -
Accounts receivable and
    other assets                        -       15,304       10,019          8,105        9,946
Due from affiliates                (4,218)      36,919       31,307         42,659       31,353
Property, plant, contracts and
    equipment, net                  7,377       15,173       61,078         52,953       69,179
Management fee and

     goodwill, net                      -            -            -              -            -
Investments in

    partnerships                   98,656      312,381            -              -            -
                                 --------    ---------    ---------     ----------  -----------
                                 $101,815   $  379,777    $ 102,404     $  103,717  $   110,478
                                 ========   ==========    =========     ==========  ===========
Liabilities and Equity:
Accounts payable, accrued

  liabilities and deferred taxes $  1,098   $    7,849    $   1,244     $    1,554  $     1,419
Senior secured project note             -            -            -              -            -
    ----------                   --------   ----------    ---------     ---------- ------------
Total liabilities                   1,098        7,849        1,244          1,554        1,419
Guarantors' equity                100,717      371,928      101,160        102,163      109,059
                                 --------   ----------    ---------     ----------  -----------
                                 $101,815   $  379,777    $ 102,404     $  103,717  $   110,478
                                 ========   ==========    =========     ==========  ===========
</TABLE>
<PAGE>

6. CONDENSED FINANCIAL INFORMATION (Continued)

Condensed  balance sheet information of the Guarantors' pro rata interest in the
respective  entities  as of  December  31,  2000  and  1999  is as  follows  (in
thousands):
<TABLE>
<CAPTION>

                                       Vulcan                             Adjustments/       Combined
                                         BNG      Minerals     Turbo      Eliminations       Total
                                    ---------  ---------------------------------------   ------------
December 31, 2000 Assets:

<S>                               <C>         <C>          <C>           <C>              <C>
Restricted cash                   $         - $          - $          -  $         106    $       106
Accounts receivable and
    other assets                        7,923          195        1,922          1,566         54,980
Due from affiliates                    42,002      (16,747)      (8,358)      (119,851)        35,066
Property, plant, contracts and
    equipment, net                     49,852      152,933       10,114        217,605        636,264
Management fee and

     goodwill, net                          -            -            -        195,285        195,285
Investments in

    partnerships                            -            -            -       (411,037)             -
                                  ----------- ------------ ------------  -------------    -----------
                                  $    99,777 $    136,381 $      3,678  $    (116,326)   $   921,701
                                  =========== ============ ============  =============    ===========
Liabilities and Equity:
Accounts payable, accrued

  liabilities and deferred taxes  $     1,121 $     (1,208)$      1,252  $     105,228    $   119,557
Senior secured project note                 -      140,528            -        110,122        250,650
                                  ----------- ------------ ------------  -------------    -----------
Total liabilities                       1,121      139,320        1,252        215,350        370,207
Guarantors' equity                     98,656       (2,939)       2,426       (331,676)       551,494
                                  -----------  ----------- ------------   ------------    -----------
                                  $    99,777 $    136,381 $      3,678  $    (116,326)   $   921,701
                                  =========== ============ ============  =============    ===========
</TABLE>


<PAGE>


6. CONDENSED FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>

                                     Vulcan
                                      Power          CEOC        Elmore    Del Ranch     Leathers
                                   ---------     ---------    ----------------------  -----------
December 31, 1999 Assets:

<S>                               <C>            <C>         <C>        <C>           <C>
Restricted cash                   $        -     $       -   $        - $          -  $         -
Accounts receivable and
    other assets                           -        16,493        3,564        3,555       10,413
Due from affiliates                    1,522        32,417       26,109       30,180       27,581
Property, plant, contracts and
    equipment, net                       153        13,638       66,116       63,119       66,786
Management fee and

     goodwill, net                         -             -            -            -            -
Investments in

    partnerships                      88,121       292,784            -            -            -
                                  ----------     ---------   ---------- ------------  -----------
                                  $   89,796     $ 355,332   $   95,789 $     96,854  $   104,780
                                  ==========     =========   ========== ============  ===========
Liabilities and Equity:
Accounts payable, accrued

  liabilities and deferred taxes  $      291     $   7,658   $    1,504 $      1,435  $     1,699
Senior secured project note                -             -            -            -            -
--------                          ----------     ---------   ---------- ------------  -----------
Total liabilities                        291         7,658        1,504        1,435        1,699
Guarantors' equity                    89,505       347,674       94,285       95,419      103,081
                                    --------     ---------    ---------   ---------- ------------
                                  $   89,796     $ 355,332   $   95,789 $     96,854  $   104,780
                                  ==========     =========   ========== ============  ===========
</TABLE>


<PAGE>
6. CONDENSED FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>

                                       Vulcan                         Adjustments/         Combined
                                         BNG         Minerals         Eliminations           Total
                                      ---------    ------------    ---------------      ------------
December 31, 1999 Assets:

<S>                                 <C>             <C>               <C>                <C>
Restricted cash                     $         -     $    44,092       $     16,362       $    60,454
Accounts receivable and
    other assets                          2,373               -              2,097            38,495
Due from affiliates                      31,052           3,634            (80,462)           72,033
Property, plant, contracts and
    equipment, net                       56,360          92,794            172,461           531,427
Management fee and

     goodwill, net                            -               -            199,483           199,483
Investments in

    partnerships                              -               -           (380,905)                -
                                    -----------     -----------       ------------       -----------
                                    $    89,785     $   140,520       $    (70,964)      $   901,892
                                    ===========     ===========       ============       ===========
Liabilities and Equity:
Accounts payable, accrued
    liabilities and deferred taxes  $     1,664     $        (8)      $    102,123       $   116,366
Senior secured project note                   -         140,528            120,684           261,212
                                    -----------     -----------       ------------       -----------
Total liabilities                         1,664         140,520            222,807           377,578
Guarantors' equity                       88,121               -           (293,771)          524,314
                                    -----------      ----------       ------------       -----------
                                    $    89,785     $   140,520       $    (70,964)      $   901,892
                                    ===========     ===========       ============       ===========
</TABLE>


<PAGE>


6. 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, 2000, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>

                                   Vulcan
                                   Power         CEOC       Elmore     Del Ranch    Leathers
                                 ---------    ---------   ---------    ---------   ---------
December 31, 2000
<S>                             <C>          <C>          <C>          <C>         <C>
Revenues                        $   1,386    $   4,657    $ 25,762     $  25,610   $  25,662
Expenses                              709            -      18,887        18,866      19,684
                                ----------   ----------  ----------    ---------   ----------
Net income                      $     677    $   4,657    $  6,875     $   6,744   $   5,978
                                   ======       ======      ======        ======      ======
December 31, 1999
Revenues                        $     892    $   6,104    $ 16,908     $  17,299   $  56,127
Expenses                              485            -      15,764        13,914      36,320
                               ----------   ----------  ----------    ----------  ----------
Net income                      $     407    $   6,104    $  1,144     $   3,385   $  19,807
                                =========    =========    ========     =========   =========
December 31, 1998
Revenues                        $     772    $  47,009    $ 49,212     $  52,241   $  50,436
Expenses                              383            -      38,583        37,998      38,166
                                ---------    ---------    --------     ---------   ---------
Net income                      $     389    $  47,009    $ 10,629     $  14,243   $  12,270
                                =========    =========    ========     =========   =========
</TABLE>

<PAGE>
6. 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, 2000, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>

                                  Vulcan                           Adjustments/      Combined
                                    BNG     Minerals    Turbo      Eliminations        Total
                               --------- ----------- -------------------------   ------------
December 31, 2000
<S>                           <C>          <C>         <C>       <C>              <C>
Revenues                      $   22,749   $     576   $ 4,652   $   (2,870)      $   108,184
Expenses                          12,214       4,962     1,031        4,651            81,004
                              ----------   ---------   -------   ------------     -----------
Net income                    $   10,535   $ (4,386)   $ 3,621   $   (7,521)      $    27,180
                              ==========   =========   =======   ============      -----======
December 31, 1999
Revenues                      $   15,756   $     ---   $   ---   $    1,902       $   114,988
Expenses                           9,663         ---       ---       13,361            89,507
                              ---------- ---------------------   ------------     -----------
Net income                    $    6,093   $     ---   $   ---   $  (11,459)      $    25,481
                              ==========   =========   =======   ============     ===========
December 31, 1998
Revenues                      $   14,608   $     ---   $   ---   $  (41,713)      $   172,565
Expenses                           9,458         ---       ---       10,843           135,431
                              ----------   ---------   --------  -----------    -------------
Net income                    $    5,150   $     ---   $   ---   $  (52,556)      $    37,134
                              ==========   =========   ========  ===========    =============
</TABLE>


<PAGE>

7. INCOME TAXES

The provision for income taxes for the years ended  December 31, 2000,  1999 and
1998 consisted of the following (in thousands):

                        Current          Deferred          Total
2000                   --------        ----------       ----------
--------------------
Federal               $   3,956          $    946         $  4,902
State                       911             1,881            2,792
                      ---------         ---------       ----------
Total                 $   4,867           $ 2,827         $  7,694
                          =====             =====           ======
1999

 --------------------
Federal                $  8,527           $   991         $  9,518
State                     2,754               275            3,029
                      ---------         ---------       ----------
Total                   $11,281            $1,266          $12,547
                          =====             =====           ======
1998

--------------------
Federal                 $22,021           $(7,212)         $14,809
State                     6,718            (1,998)           4,720
                      ---------         ---------       ----------
Total                   $28,739           $(9,210)         $19,529
                          =====             =====           ======

    Deferred  tax  liabilities  at  December  31,  2000  and 1999  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.

8.  COMMITMENTS AND CONTINGENCIES

A.  Financial Condition of Edison

    Edison,  a  wholly-owned  subsidiary  of Edison  International,  is a public
utility primarily engaged in the business of supplying electric energy to retail
customers in Central and Southern California, excluding Los Angeles. The Funding
Corporation  is aware that there have been public  announcements  that  Edison's
financial condition has deteriorated as a result of reduced liquidity.  Based on
public  announcements,  the Funding Corporation  understands that Edison has not
made payments to other qualifying facilities ("QFs") from which Edison purchases
power and has not made  scheduled  payments  of debt  service.  Edison's  senior
unsecured  debt  obligations  are  currently  rated Caa2 (on watch for  possible
downgrade) by Moody's and D by S&P.

    The Funding  Corporation is aware that there have been public  announcements
that Edison,  other industry  participants and governmental  entities have taken
actions in response to Edison's financial  condition.  These actions include the
following:

     o    The Federal Energy Regulatory  Commission ("FERC") has issued an order
          eliminating  requirements  that Edison and other California  utilities
          purchase power from the structured power market in California known as
          the  California  Power  Exchange  in order  to  provide  them  with an
          opportunity to obtain power from alternative sources at a lower cost.
<PAGE>

     o    The State of  California  has enacted  legislation  to provide for the
          California  Department of Water Resources to purchase  wholesale power
          and sell it to retail  customers,  which will be funded by a surcharge
          on retail rates. The California  legislature is also considering other
          legislation  to improve  the  financial  condition  of the  California
          electric utilities.

     o    The  California  Public  Utilities   Commission  ("CPUC")  approved  a
          decision  on March 27, 2001 to increase  retail  electricity  rates by
          approximately  40%. In another  decision  that day,  the CPUC  ordered
          Edison  to pay the QFs on a go  forward  basis  within  15 days of the
          invoice and purportedly  modified the calculation of Short Run Avoided
          Cost.

     o    The State of  California  and  Edison  have  announced  a  preliminary
          agreement for the State to purchase Edison's  transmission  assets for
          $2.7  billion  and to allow  Edison to issue  bonds for a  substantial
          portion of its undercollection of revenues.

    The Funding Corporation can give no assurance as to the likely result of any
of the  actions  described  above or as to  whether  such  actions  will  have a
positive effect on the financial  condition of Edison or its willingness to make
payments under the Power Purchase Agreements.

    Edison  has  failed to pay  approximately  $76  million  due under the Power
Purchase  Agreements  for power  delivered  in November  and  December  2000 and
January 2001,  although the Power  Purchase  Agreements  provide for billing and
payment on a schedule  where payments would have normally been received in early
January,  February and March 2001.  Edison has not notified the Imperial  Valley
Projects as to when they can expect to receive these  payments.  This  continued
non-payment  by Edison could result in an untenable  situation for the continued
operation of the Imperial Valley Projects unless  additional  funds are obtained
in the near future.

    On February 21, 2001,  certain  Guarantors filed a lawsuit against Edison in
California's  Imperial  County  Superior  Court seeking a court order  requiring
Edison to make the required  payments under the Power Purchase  Agreements.  The
lawsuit  also  requested,  among other  things,  that the court order permit the
Guarantors to suspend deliveries of power to Edison and to permit the Guarantors
to sell such power to other purchasers in California.

    On March 22, 2001, the Superior Court granted Guarantors' Motion for Summary
Adjudication  and a  Declaratory  Judgment  ordering  that:  1) under  the Power
Purchase Agreements, Guarantors have the right to temporarily suspend deliveries
of  capacity  and energy to Edison,  2)  Guarantors  are  entitled to resell the
energy  and  capacity  to other  purchasers  and 3) the  interim  suspension  of
deliveries  to Edison shall not in any respect  result in the  modifications  or
termination of the Power Purchase  Agreements and the Power Purchase  Agreements
shall in all respects continue in full force and effect other than the temporary
suspension of deliveries to Edison.  The Guarantors  intend to vigorously pursue
their other remedies in this action in light of Edison's continuing non-payment.

    The Funding  Corporation  is hopeful  that the current  Edison  situation is
temporary and the proceedings in the legal, regulatory,  financial and political
arenas will lead to the improvement of Edison's financial  condition in the near
future  and the  payment  by Edison  of  amounts  due  under the Power  Purchase
Agreements. However, no assurance can be given that this will be the case.

    As a result of  Edison's  failure to make the  payments  due under the Power
Purchase  Agreements  and the recent  downgrades  of  Edison's  credit  ratings,
Moody's has downgraded the ratings for the Securities to Caa2 (negative outlook)
and S&P has downgraded the ratings for the Securities to BBB- and has placed the
Securities on "credit watch negative". Accordingly, the Funding Corporation does
not  believe  it is  currently  able to obtain  funds in the  banking or capital
markets.

B.  Minerals

     CalEnergy Minerals LLC, a Partnership Guarantor ("Minerals LLC"), developed
and owns the rights to  proprietary  processes  for the  extraction of zinc from
elements  in  solution  in the  geothermal  brine  and  fluids  utilized  at the
Company's  Imperial  Valley  plants.  A pilot  plant has  successfully  produced
commercial quality zinc at the Company's Imperial Valley Project.  The Company's

<PAGE>

affiliates  intend to  sequentially  develop  facilities  for the  extraction of
manganese,  silver,  gold, lead, boron, lithium and other products as it further
develops  the  extraction   technology.   The  Company's   affiliates  are  also
investigating  producing  silica as an extraction  project.  Silica is used as a
filler for such products as paint, plastics and high temperature cement.

     Minerals LLC is constructing  the Zinc Recovery  Project which will recover
zinc from the geothermal brine (the "Zinc Recovery Project"). Facilities will be
installed  near the Imperial  Valley  Project  sites to extract a zinc  chloride
solution  from the  geothermal  brine  through  an ion  exchange  process.  This
solution will be  transported  to a central  processing  plant where zinc ingots
will  be  produced  through  solvent  extraction,   electrowinning  and  casting
processes.  The  Zinc  Recovery  Project  is  designed  to  have a  capacity  of
approximately  30,000  metric  tonnes  per year  and is  scheduled  to  commence
commercial operation in mid-2001. In September 1999, Minerals LLC entered into a
sales agreement  whereby all zinc produced by the Zinc Recovery  Project will be
sold to Cominco,  Ltd.  The initial  term of the  agreement  expires in December
2005.

     The Zinc  Recovery  Project is being  constructed  by  Kvaerner  U.S.  Inc.
("Kvaerner")  pursuant  to a date  certain,  fixed-price,  turnkey  engineering,
procurement  and   construction   contract  (the  "Zinc  Recovery   Project  EPC
Contract").  Kvaerner is a wholly-owned  indirect subsidiary of Kvaerner ASA, an
internationally  recognized engineering and construction firm experienced in the
metals, mining and processing industries.


<PAGE>


                          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
LLC as of December 31, 2000 and 1999 and the related  statements of  operations,
equity and cash flows for each of the three years in the period  ended  December
31, 2000.  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  auditing  standards  generally
accepted in the United States of America.  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 LLC as of December
31, 2000 and 1999 and the results of its  operations and its cash flows for each
of the three years in the period  ended  December  31, 2000 in  conformity  with
accounting principles generally accepted in the United States of America.

    As discussed in Note 2 to the financial  statements,  Salton Sea Royalty LLC
was  converted  to a  limited  liability  company  during  1999  and as such the
statements of operations and cash flows for the year ended December 31, 2000 and
1999 are not comparable  due to the change in reporting  entity which results in
no tax expense in fiscal 2000.

DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 18, 2001

(March 27, 2001 as to Note 5)


<PAGE>


                             SALTON SEA ROYALTY LLC
                                 BALANCE SHEETS
                (Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>

                                                                              December 31,
------------------------------------------------------------------------------------------------------
                                                                         2000               1999
------------------------------------------------------------------------------------------------------

ASSETS

<S>                                                                  <C>                 <C>
Prepaid expenses and other assets                                    $        82         $      235
                                                                     -----------         ----------
Total current assets                                                          82                235

Royalty stream, net                                                       15,719             16,776
Excess of cost over fair value of net assets acquired, net31,372          32,280
Due from affiliates                                                       26,497             21,825
                                                                     -----------         ----------
                                                                     $    73,670         $   71,116
                                                                     ===========         ==========

LIABILITIES AND EQUITY
Liabilities:
Accrued liabilities                                                  $        57         $       82
Current portion of long term debt                                          4,434              4,773
                                                                     -----------         ----------
Total current liabilities                                                  4,491              4,855

Senior secured project note                                                4,607              9,041
                                                                     -----------         ----------
    Total liabilities                                                      9,098             13,896

Commitments and contingencies (Note 3 and 5)

Equity:
Common stock, par value $.01 per share; 100 shares
    authorized, issued and outstanding                                         -                 -
Additional paid-in capital                                                 1,561              1,561
Retained earnings                                                         63,011             55,659
                                                                     -----------         ----------
    Total equity                                                          64,572             57,220
                                                                     -----------         ----------
                                                                     $    73,670         $   71,116
                                                                     ===========         ==========
</TABLE>


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


<PAGE>


                             SALTON SEA ROYALTY LLC
                            STATEMENTS OF OPERATIONS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                                 Years Ended December 31,
-----------------------------------------------------------------------------------------------------------------
                                                                            2000           1999            1998
-----------------------------------------------------------------------------------------------------------------

Revenues:
<S>                                                                    <C>             <C>           <C>
Royalty income                                                         $    14,130     $   26,274    $    51,703

Expenses:
Operating, general and administrative expenses                               3,859          4,610          8,120
Amortization of royalty stream and goodwill                                  1,965          7,064          9,794
Interest expense                                                               954          1,682          2,784
                                                                       -----------     ----------    -----------
Total expenses                                                               6,778         13,356         20,698
                                                                       -----------     ----------    -----------
Income before income taxes                                                   7,352         12,918         31,005
Provision (benefit) for income taxes                                           ---         (6,304)        11,508
                                                                       -----------     ----------    -----------
Net income                                                             $     7,352     $   19,222    $    19,497
                                                                       ===========     ==========    ===========
</TABLE>

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


<PAGE>


                             SALTON SEA ROYALTY LLC
                              STATEMENTS OF EQUITY
                   FOR THE THREE YEARS ENDED DECEMBER 31, 2000
                             (Dollars in Thousands)
<TABLE>
<CAPTION>

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

<S>                                         <C>        <C>             <C>               <C>           <C>
Balance, January 1, 1998                         100   $          -    $     1,561       $   16,940    $    18,501

Net income                                         -              -              -           19,497         19,497
                                            --------    -----------    -----------       ----------     ----------
Balance, December 31, 1998                       100              -          1,561           36,437         37,998

Net income                                         -              -              -           19,222         19,222
                                            --------    -----------    -----------       ----------    -----------
Balance, December 31, 1999                       100              -          1,561           55,659         57,220

Net income                                         -              -              -            7,352          7,352
                                            --------    -----------    -----------       ----------    -----------
Balance, December 31, 2000                       100    $         -    $     1,561       $   63,011    $    64,572
                                            ========    ===========    ===========       ==========    ===========
</TABLE>


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


<PAGE>


                             SALTON SEA ROYALTY LLC
                            STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                                     Years Ended December 31,
-----------------------------------------------------------------------------------------------------------------
                                                                               2000           1999         1998

-----------------------------------------------------------------------------------------------------------------
Cash flow from operating activities:

<S>                                                                       <C>            <C>          <C>
Net income                                                                $    7,352     $   19,222   $   19,497
Adjustments to reconcile net income to net cash provided by
  operating activities:
     Amortization of royalty stream and goodwill                               1,965          7,064        9,794
     Deferred income taxes                                                       ---         (6,769)        (499)
     Changes in assets and liabilities:
     Prepaid expenses and other assets                                           153            278          468
     Accrued liabilities                                                         (25)        (9,373)      18,280
                                                                          ----------     ----------   ----------
Net cash flows from operating activities                                       9,445         10,422       47,540
                                                                          ----------     ----------   ----------
Net cash flows from financing activities:

Increase in due from affiliates                                               (4,672)        (1,026)     (31,814)
Repayment of senior secured project note                                      (4,773)        (9,396)     (15,726)
                                                                          ----------     ----------   ----------
Net cash flows from financing activities                                      (9,445)       (10,422)     (47,540)
                                                                          ----------     ----------   ----------
Net change in cash                                                                 -              -           -
Cash at beginning of period                                                        -              -           -
                                                                          ----------     ----------   ----------
Cash at end of period                                                     $        -     $        -   $       -
                                                                          ==========     ==========   ==========
Supplemental disclosure:
  Interest paid                                                           $      978     $    1,738   $    2,874
                                                                          ==========     ==========   ==========
  Income taxes paid                                                       $        -     $      465   $   12,007
                                                                          ==========     ==========   ==========
</TABLE>

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


<PAGE>


                             SALTON SEA ROYALTY LLC
                          NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION

         Salton Sea Royalty LLC (the  "Royalty  Company")  is a  special-purpose
entity,  99% owned by Magma Power  Company  ("Magma") and 1% owned by Salton Sea
Funding  Corporation  (the  "Funding  Corporation").  Magma  is  a  wholly-owned
subsidiary  of CE  Generation  LLC ("CE  Generation")  which is owned equally by
MidAmerican  Energy Holdings Company  ("MidAmerican")  and El Paso CE Generation
Holding  Company,  which was merged into El Paso Merchant Energy Holding Company
on December 31, 2000, an affiliate of El Paso Energy Corporation.

  The Royalty Company  receives an assignment of royalties and certain fees paid
by three partnership projects, Del Ranch, Elmore and Leathers (collectively, the
"Partnership  Projects").  In  addition,  the Royalty  Company  has  received an
assignment of certain  resource-related and contract assignment payments 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 Partnership  Projects.  Included in royalty income
are payments from East Mesa related to a settlement  agreement in 1998 for prior
years.

  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.  In 1998, the East Mesa Project
entered into a Termination Agreement, to which Magma consented, which terminated
its SO4 Agreement upon CPUC approval becoming final in 1999.

  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 earned  payments for energy as scheduled in the SO4  Agreements.  After
the 10-year  scheduled  payment  period  expired (1998 for Del Ranch and Elmore;
1999 for  Leathers),  the energy payment per kWh throughout the remainder of the
contract period are at Edison's Avoided Cost of Energy.

  For the year ended December 31, 2000 and 1999,  Edison's  average Avoided Cost
of  Energy  was 5.8 cents and 3.1  cents  per kWh,  respectively.  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.

  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 Magma.

  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.

  The Company was converted to a limited  liability  company  during 1999 and as
such the statements of operations and cash flows for the year ended December 31,

<PAGE>

2000 and 1999 are not  comparable  due to the change in  reporting  entity which
results  in  no  tax  expense  in  fiscal   2000.   Income  taxes  are  now  the
responsibility  of the  partners  and the Company has no  obligation  to provide
funds to the  partners  for  payment of any tax  liabilities.  Accordingly,  the
Company has no tax obligations.

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 fixed  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, 2000 and 1999,  accumulated  amortization was $44.8
million and $43.7 million, 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, 2000 and 1999, accumulated amortization of the excess of
cost over fair value was $5.4 million and $4.5 million, 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.  On February 19, 1999,  the Royalty  Company was converted to a limited
liability company which is not taxed. Therefore, since that date, no recognition
has been given to federal or state income taxes as that is the responsibility of
the individual members of the LLC.

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,  based on discounted cash flows or various models, whenever
evidence exists that the carrying value is not recoverable.

Accounting Pronouncements

     In June 1998, the Financial  Accounting  Standards Board (FASB) issued SFAS
133, "Accounting for Derivative  Instruments and Hedging Activities",  which was
delayed by SFAS 137 and amended by SFAS 138. SFAS 133/138  requires an entity to
recognize  all of  its  derivatives  as  either  assets  or  liabilities  in its
statement of financial  position and measure  those  instruments  at fair value.
Salton Sea Funding Corporation implemented the new standards on January 1, 2001.
The initial adoption of SFAS133/138 did not have a material impact on Salton Sea
Funding Corporation's financial position, results of operations or any impact on
its cash flows.

     The FASB's  Derivatives  Implementation  Group  continues  to identify  and
provide guidance on various  implementation  issues related to SFAS 133/138 that
are in varying stages of review and clearance by the  Derivative  Implementation
Group and  FASB.  Salton  Sea  Funding  Corporation  has not  determined  if the
ultimate  resolution  of  those  issues  would  have a  material  impact  on its
financial statements.
<PAGE>

Use of Estimates

  The  preparation  of  financial   statements  in  conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  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 an interest rate of 7.37%. They have also guaranteed,  along with
other guarantors, the debt of Salton Sea Funding Corporation,  which amounted to
$543.9 million at December 31, 2000. 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  (in
thousands):

                  2001                                 $ 4,434
                  2002                                   3,460
                  2003                                     304
                  2004                                     408
                  2005                                     435
                                                    ----------
                                                       $ 9,041
                                                    ==========
    The estimated fair values of the senior secured project note at December 31,
2000 and 1999 were $8.3 million and $13.5 million, respectively.

4.  INCOME TAXES

    The  provision  for income  taxes for the years ended  December 31, 1999 and
1998, consisted of the following:

                 Current         Deferred          Total
                ---------       -----------       --------
1999

Federal          $   363          $(5,921)          $(5,558)
State                102             (848)             (746)
               ---------      -----------          --------
Total            $   465          $(6,769)          $(6,304)
               =========      ===========          ========
1998

Federal          $ 9,267          $  (294)          $ 8,973
State              2,740             (205)            2,535
               ---------      -----------          --------
Total            $12,007          $  (499)          $11,508
               =========      ===========          ========

    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.

5. CONTINGENCY

    Edison,  a  wholly-owned  subsidiary  of Edison  International,  is a public
utility primarily engaged in the business of supplying electric energy to retail

<PAGE>

customers in Central and Southern California, excluding Los Angeles. The Funding
Corporation  is aware that there have been public  announcements  that  Edison's
financial condition has deteriorated as a result of reduced liquidity.  Based on
public  announcements,  the Funding Corporation  understands that Edison has not
made payments to other qualifying facilities ("QFs") from which Edison purchases
power and has not made  scheduled  payments  of debt  service.  Edison's  senior
unsecured  debt  obligations  are  currently  rated Caa2 (on watch for  possible
downgrade) by Moody's and D by S&P.

    The Funding  Corporation is aware that there have been public  announcements
that Edison,  other industry  participants and governmental  entities have taken
actions in response to Edison's financial  condition.  These actions include the
following:

     o    The Federal Energy Regulatory  Commission ("FERC") has issued an order
          eliminating  requirements  that Edison and other California  utilities
          purchase power from the structured power market in California known as
          the  California  Power  Exchange  in order  to  provide  them  with an
          opportunity to obtain power from alternative sources at a lower cost.

     o    The State of  California  has enacted  legislation  to provide for the
          California  Department of Water Resources to purchase  wholesale power
          and sell it to retail  customers,  which will be funded by a surcharge
          on retail rates. The California  legislature is also considering other
          legislation  to improve  the  financial  condition  of the  California
          electric utilities.

     o    The  California  Public  Utilities   Commission  ("CPUC")  approved  a
          decision  on March 27, 2001 to increase  retail  electricity  rates by
          approximately  40%. In another  decision  that day,  the CPUC  ordered
          Edison  to pay the QFs on a go  forward  basis  within  15 days of the
          invoice and purportedly  modified the calculation of Short Run Avoided
          Cost.

     o    The State of  California  and  Edison  have  announced  a  preliminary
          agreement for the State to purchase Edison's  transmission  assets for
          $2.7  billion  and to allow  Edison to issue  bonds for a  substantial
          portion of its undercollection of revenues.

    The Funding Corporation can give no assurance as to the likely result of any
of the  actions  described  above or as to  whether  such  actions  will  have a
positive effect on the financial  condition of Edison or its willingness to make
payments under the Power Purchase Agreements.

    Edison  has  failed to pay  approximately  $76  million  due under the Power
Purchase  Agreements  for power  delivered  in November  and  December  2000 and
January 2001,  although the Power  Purchase  Agreements  provide for billing and
payment on a schedule  where payments would have normally been received in early
January,  February and March 2001.  Edison has not notified the Imperial  Valley
Projects as to when they can expect to receive these  payments.  This  continued
non-payment  by Edison could result in an untenable  situation for the continued
operation of the Imperial Valley Projects unless  additional  funds are obtained
in the near future.

    On February 21, 2001,  certain  Guarantors filed a lawsuit against Edison in
California's  Imperial  County  Superior  Court seeking a court order  requiring
Edison to make the required  payments under the Power Purchase  Agreements.  The
lawsuit  also  requested,  among other  things,  that the court order permit the
Guarantors to suspend deliveries of power to Edison and to permit the Guarantors
to sell such power to other purchasers in California.

    On March 22, 2001, the Superior Court granted Guarantors' Motion for Summary
Adjudication  and a  Declaratory  Judgment  ordering  that:  1) under  the Power
Purchase Agreements, Guarantors have the right to temporarily suspend deliveries
of  capacity  and energy to Edison,  2)  Guarantors  are  entitled to resell the
energy  and  capacity  to other  purchasers  and 3) the  interim  suspension  of
deliveries  to Edison shall not in any respect  result in the  modifications  or
termination of the Power Purchase  Agreements and the Power Purchase  Agreements
shall in all respects continue in full force and effect other than the temporary
suspension of deliveries to Edison.  The Guarantors  intend to vigorously pursue
their other remedies in this action in light of Edison's continuing non-payment.
<PAGE>

    The Funding  Corporation  is hopeful  that the current  Edison  situation is
temporary and the proceedings in the legal, regulatory,  financial and political
arenas will lead to the improvement of Edison's financial  condition in the near
future  and the  payment  by Edison  of  amounts  due  under the Power  Purchase
Agreements. However, no assurance can be given that this will be the case.

    As a result of  Edison's  failure to make the  payments  due under the Power
Purchase  Agreements  and the recent  downgrades  of  Edison's  credit  ratings,
Moody's has downgraded the ratings for the Securities to Caa2 (negative outlook)
and S&P has downgraded the ratings for the Securities to BBB- and has placed the
Securities on "credit watch negative". Accordingly, the Funding Corporation does
not  believe  it is  currently  able to obtain  funds in the  banking or capital
markets.


<PAGE>


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

     Not applicable.



<PAGE>


                                    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

     Gregory E. Abel*           Director
     Brian K. Hankel            Vice President and Treasurer
     Joseph M. Lillo            Vice President and Controller
     Douglas L. Anderson        Director, Vice President, and General Counsel
     Patrick J. Goodman         Director
     Larry Kellerman*           Director
     John L. Harrison*          Director

* Gregory E. Abel is Director of CalEnergy  Minerals LLC and Salton Sea Minerals
Corp.  only. * Larry  Kellerman is Director  for all entities  except  CalEnergy
Minerals  LLC and Salton Sea Minerals  Corp. * John L.  Harrison is Director for
all entities except CalEnergy Minerals LLC and Salton Sea Minerals Corp.

     GREGORY E. ABEL,  38,  Director for  CalEnergy  Minerals LLC and Salton Sea
Minerals  Corp.  only.  Mr.  Abel  joined  MidAmerican  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.

     BRIAN K.  HANKEL,  38,  Vice  President  and  Treasurer  of each  Guarantor
subsidiary.  Mr. Hankel joined  MidAmerican in February 1992 as Treasury Analyst
and served in that position to December 1995. Mr. Hankel was appointed Assistant
Treasurer in January 1996 and was appointed  Treasurer in January 1997. Prior to
that, Mr. Hankel was a Money  Position  Analyst at FirsTier Bank of Lincoln from
1988 to 1992 and Senior Credit Analyst at FirsTier from 1987 to 1988.

     JOSEPH M. LILLO,  31, Vice  President  and  Controller.  Mr.  Lillo  joined
MidAmerican in November  1996, and served as Manager of Financial  Reporting and
was  promoted  to  Controller/IPP  in March  1998.  Mr  Lillo  was  promoted  to
Controller  in July 1999.  Prior to joining the Company,  Mr. Lillo was a senior
associate with Coopers & Lybrand LLP.

     DOUGLAS L. ANDERSON,  43,  Director,  Vice President and General Counsel of
each Guarantor  subsidiary.  Mr. Anderson  joined  MidAmerican in February 1993.
From 1990 to 1993, Mr.  Anderson was a business  attorney with Fraser,  Stryker,
Meusey,  Olson,  Boyer & Bloch, P.C. in Omaha.  Prior to that Mr. Anderson was a
principal in the firm Anderson & Anderson.

     PATRICK J. GOODMAN,  34, Director.  Mr. Goodman joined  MidAmerican in June
1995, and served as Manager of  Consolidation  Accounting  until  September 1996
when he was promoted to Controller.  Mr. Goodman was promoted to Chief Financial
Officer in April 1999. Prior to joining MidAmerican, Mr. Goodman was a financial
manager  for  National  Indemnity  Company and a senior  associate  at Coopers &
Lybrand.

     LARRY  KELLERMAN,  45,  President of El Paso Power  Services  Company and a
Director of each Guarantor  subsidiary except CalEnergy  Minerals LLC and Salton
Sea Minerals Corp. Mr.  Kellerman  joined El Paso Energy in February 1998. Prior
to  joining  El Paso  Energy,  he was  President  of  Citizens  Power,  where he
initiated  Citizens'  activities  in the  power  marketing  field in 1988,  when
Citizens was the initial power marketer  granted FERC  authorization.  From 1982
through 1988,  Mr.  Kellerman was General  Manager of Power  Marketing and Power
Supply for Portland General Electric.  From 1979 through 1982, Mr. Kellerman was
Financial Analyst and Power Contract Negotiator with Southern California Edison,
where he negotiated  some of the first Public  Utility  Regulatory  Policies Act
qualifying facility contracts in the nation.
<PAGE>

     JOHN L. HARRISON,  42, Senior Managing Director and Chief Financial Officer
of El Paso Merchant  Energy and a Director of each Guarantor  subsidiary  except
CalEnergy Minerals LLC and Salton Sea Minerals Corp. Mr. Harrison joined El Paso
Energy in June 1996. Prior to joining El Paso Energy, Mr. Harrison was a partner
with Coopers & Lybrand LLP for five years.




<PAGE>


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,  2000,  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,  1999,  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.

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
MidAmerican

     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, SSPG,  Elmore,  Leathers,  Del Ranch and Vulcan,  the
general partners thereof) have been organized and are operated as legal entities
separate and apart from MidAmerican, El Paso, CE Generation, Magma and any other
Affiliates of MidAmerican,  El Paso, CE Generation or Magma,  and,  accordingly,
the assets of the Funding  Corporation  and the Guarantors  (and, in the case of
SSBP,  SSPG,  Elmore,  Leathers,  Del Ranch and  Vulcan,  the  general  partners
thereof)  will  not  be  generally  available  to  satisfy  the  obligations  of
MidAmerican,  El  Paso,  CE  Generation,   Magma  or  any  other  Affiliates  of

<PAGE>

MidAmerican,   El  Paso,  CE  Generation  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  MidAmerican,  El Paso, CE
Generation, Magma or Affiliates thereof.


<PAGE>


                                     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

         Not applicable.

     (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


<PAGE>


                                   Signatures

     Pursuant  to the  requirements  of Section  13 or 15 (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                         SALTON SEA FUNDING CORPORATION

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
(Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

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

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

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

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

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

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           FISH LAKE POWER LLC

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           VULCAN POWER COMPANY

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           CALENERGY OPERATING CORPORATION

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           SALTON SEA ROYALTY LLC

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           LEATHERS, L.P., a
                           California limited partnership

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

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           ELMORE L.P., a California  limited partnership
                           By:  CalEnergy Operating Corporation, a
                           Delaware corporation, its general partner

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           DEL RANCH L.P., a
                           California limited partnership

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

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           VPC GEOTHERMAL LLC., a
                           Delaware corporation

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           NIGUEL ENERGY COMPANY, a
                           California corporation

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           CONEJO ENERGY COMPANY, a
                           California corporation

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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.

                                                         Date
-----------------------------------------------------------------------------

/s/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           SAN FELIPE ENERGY COMPANY, a
                           California corporation

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           VULCAN/BN GEOTHERMAL POWER COMPANY, a
                           Nevada general partnership

                           By: VULCAN POWER COMPANY, a
                           Nevada corporation, Partner

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           SALTON SEA POWER L.L.C., a
                           Delaware Limited Liability Company

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           CE TURBO LLC, a
                           Delaware Limited Liability Company

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           CE SALTON SEA INC., a
                           Delaware Corporation

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Larry Kellerman *                            March 29, 2001
--------------------
Larry Kellerman
Director

/s/  John L. Harrison *                           March 29, 2001
---------------------
John L. Harrison
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           CALENERGY MINERALS LLC, a
                           Delaware Limited Liability Company

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Greg E. Abel *                               March 29, 2001
-----------------
Greg E. Abel
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                   Signatures

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2001.

                           SALTON SEA MINERALS CORP., a
                           Delaware Corporation

                           By:/s/ Douglas L. Anderson
                           Douglas L. Anderson
                           Director, Vice President and General Counsel

     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/  Douglas L. Anderson                          March  29, 2001
------------------------
Douglas L. Anderson

Director, Vice President and General Counsel
 (Principal Executive Officer)

/s/  Joseph M. Lillo                              March  29, 2001
--------------------
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/s/   Patrick J. Goodman*                         March 29, 2001
------------------------
Patrick J. Goodman
Director

/s/  Greg E. Abel *                               March 29, 2001
-----------------
Greg E. Abel
Director

* By: /s/ Douglas L. Anderson

          Douglas L. Anderson
          Attorney-in-fact


<PAGE>


                                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  Certificate of Formation of Fish Lake, LLC  (incorporated by reference
          to  Exhibit  3.5 to the  Amendment  No. 1 dated  June 29,  1999 of the
          Funding Corporation Form S-4 ("99 Form S 4)).

     3.6  Limited  Liability  Company  Agreement of Fish Lake  (incorporated  by
          reference to Exhibit 3.6 to the Funding Corporation Form 99 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).

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

     3.11 Certificate  of Formation of the Royalty  Guarantor  (incorporated  by
          reference to Exhibit 3.11 to the Funding Corporation 99 Form S-4).

     3.12 Limited   Liability   Company   Agreement  of  the  Royalty  Guarantor
          (incorporated by reference to Exhibit 3.12 to the Funding  Corporation
          99 Form S-4).

     3.13 Certificate of Formation of VPC Geothermal  (incorporated by reference
          to Exhibit 3.13 to the Funding Corporation 99 Form S 4).

     3.14 Limited Liability Company Agreement of VPG Geothermal (incorporated by
          reference to Exhibit 3.14 to the Funding Corporation 99 Form S-4).

     3.15 Articles of Incorporation of San Felipe  (incorporated by reference to
          Exhibit 3.15 to the Funding Corporation Registration Statement of Form
          S-4  dated  July 2,  1996,  333-07527  ("Funding  Corporation  II Form
          S-4")).

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

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

     3-18 By-laws of Conejo  (incorporated  by  reference to Exhibit 3.18 to the
          Funding Corporation II Form S-4).
<PAGE>

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

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

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

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

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

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

     3.25 Certificate of Formation of Minerals LLC (incorporated by reference to
          Exhibit 3.25 to the Funding Corporation 99 Form S-4)

     3.26 Limited  Liability  Company Agreement of Minerals LLC (incorporated by
          reference to Exhibit 3.26 to the Funding Corporation 99 Form S-4).

     3.27 Certificate  of Formation of Turbo LLC  (incorporated  by reference to
          Exhibit 3.27 to the Funding Corporation 99 Form S-4).

     3.28 Limited  Liability  Company  Agreement of turbo LLC  (incorporated  by
          reference to Exhibit 3.28 to the Funding Corporation 99 Form S-4).

     3.29.Articles  of  Incororation  of  CESS  (incorporated  by  reference  to
          Exhibit 3.29 to the Funding Corporation 99 Form S-4).

     3.30 By-laws of CESS  (incorporated  by  reference  to Exhibit  3.30 to the
          Funding Corporation 99 Form S-4).

     3.31 Articles  of  Incorporation  of SSMC  (incorporated  by  reference  to
          Exhibit 3.31 to the Funding Corporation 99 Form S-4).

     3.32 By-laws of SSMC  (incorporated  by  reference  to Exhibit  3.32 to the
          Funding Corporation 99 Form S-4).

     3.33 Certificate  of Formation of Power LLC  (incorporated  by reference to
          Exhibit 3.33 to the Funding Corporation 99 Form S-4).

     3.34 Limited  Liability  Company  Agreement of Power LLC  (incorporated  by
          reference to Exhibit 3.34 to the Funding Corporation 99 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).
<PAGE>

     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).

     4.1(e) Fourth  Supplemental  Indenture  between  Chemical  Trust Company of
          California and the Funding  Corporation  (incorporated by reference to
          Exhibit  4.1(e) to the  Funding  Corporation  Form 10-K/A for the year
          ending December 31, 1998).

     4.2  Amended and Restated  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  Second Amended and Restated  Partnership  Secured  Limited  Guarantee,
          dated as of October 13, 1998 by 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(c) to the  Funding  Corporation  Form 10-K/A for the year
          ending December 31, 1998).

     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).

     4.5(c) Exchange and Registration  Rights Agreement,  dated October 13, 1998
          by and among CS First Boston Corporation, Goldman Sachs & Co., and the
          Funding  Corporation  (incorporated  by reference to Exhibit 4.5(c) of
          the 99 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 asm 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).

     4.6(c)  Second  Amendment  to  the  Collateral   Agency  and  Intercreditor
          Agreement,  dated as of October 13, 1998, by and among Credit  Suisse,
          Chemical Trust Company of California,  the Funding Corporation and the
          Guarantors (incorporated by reference to Exhibit 4.6(c) to the Funding
          Corporation Form 10-K/A for the year ending December 31, 1998).

     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).
<PAGE>

     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).

     4.8(c) Purchase  Agreement,  dated  October  13, 1998 by and among CS First
          Boston  Corporation,   the  Guarantors  and  the  Funding  Corporation
          (incorporated   by  reference   to  Exhibit   4.8(c)  to  the  Funding
          Corporation Form 10-K/A for the year ending December 31, 1998).

     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).

     4.10 Debt 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).

     4.10(a) Amendment to Notes and to Amended  Debt Service  Reserve  Letter of
          Credit and  Reimbursement  Agreement,  dated  October 13, 1998, by and
          among the Funding  Corporation,  certain banks and Credit  Suisse,  as
          agent  (incorporated  by reference  to Exhibit  4.10(a) to the Funding
          Corporation Form 10-K/A for the year ending December 31, 1998).

     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).

     4.12 Amended and Restated  Salton Sea Credit  Agreement,  dated October 13,
          1998, by and among SSBP, SSPG,  Power LLC and Fish Lake  (incorporated
          by reference to Exhibit 4.12 to the Funding Corporation 99 Form S-4).

     4.13 Salton Sea Project Note (SSI),  dated October 13, 1998, by SSBP, SSPG,
          Power  LLC  and  Fish  Lake  in  favor  of  the  Funding   Corporation
          (incorporated by reference to Exhibit 4.13 to the Funding  Corporation
          99 Form S-4).

     4.13aSalton Sea Project Note  (SSIII),  dated  October 13,  1998,  by SSBP,
          SSPG,  Power  LLC and Fish  Lake in favor of the  Funding  Corporation
          (incorporated   by  reference  to  Exhibit   4.13(a)  to  the  Funding
          Corporation 99 Form S-4).

     4.14 Amended and Restated Deposit and Disbursement  Agreement,  dated as of
          October 13, 1998, 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 99 Form S-4).

     4.15 Partnership  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).

     4.16 Partnership  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).

     4.17 Stock  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).

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

     4.19 Second Amended and Restated  Partnership  Guarantors Credit Agreement,
          dated October 13, 1998, by and among the  Partnership  Guarantors  and
          the Funding Corporation  (incorporated by reference to Exhibit 4.19(c)
          to the Funding Corporation Form 10-K/A).

     4.20 Partnership  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).

     4.21 Stock 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).

     4.22 Stock 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).

     4.23 Royalty  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).

     4.24 Royalty  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).

     4.25 Royalty  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).

     4.26 Royalty  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).

     4.27 Stock 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).

     4.28 Collateral  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).

     4.29 Collateral  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).

     4.30 Debt  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).

     4.31 Partnership  Project Note (SSI),  dated  October 13, 1998,  by VPC and
          CEOC, Conejo, San Felipe,  Niguel, VPC Geothermal,  Del Ranch, Elmore,
          Leathers,  Vulcan,  Turbo LLC and Minerals LLC in favor of the Funding
          Corporation  (incorporated  by  reference  to  Exhibit  4.31(a) to the
          Funding Corporation Form 10-K/A).
<PAGE>

     4.31(a) Partnership Project Note (SSII), dated October 13, 1998, by VPC and
          CEOC, Conejo, San Felipe,  Niguel, VPC Geothermal,  Del Ranch, Elmore,
          Leathers,  Vulcan,  Turbo LLC and Minerals LLC in favor of the Funding
          Corporation  (incorporated  by  reference  to  Exhibit  4.31(b) to the
          Funding Corporation Form 10-K/A).

     4.31(b)  Partnership  Project Note (SSIII),  dated October 13, 1998, by VPC
          and CEOC,  Conejo,  San Felipe,  Niguel,  VPC  Geothermal,  Del Ranch,
          Elmore,  Leathers,  Vulcan, Turbo LLC and Minerals LLC in favor of the
          Funding  Corporation  (incorporated by reference to Exhibit 4.31(c) to
          the Funding Corporation Form 10-K/A).

     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 Intentionally Omitted

     4.36 Intentionally Omitted

     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).

     4.37(a) First Amendment to Deed of Trust,  dated October 13, 1998 by Vulcan
          to Chicago  Title  Company for the use and  benefit of Chemical  Trust
          Company of California (incorporated by reference to Exhibit 4.37(a) to
          the Form 10-K/A).

     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).

     4.38(a) First Amendment to Deed of Trust, dated October 13, 1998, by Elmore
          to Chicago  Title  Company for the use and  benefit of Chemical  Trust
          Company of California (incorporated by reference to Exhibit 4.38(a) to
          the Form 10-K/A).

     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).

     4.39(a) First  Amendment  to Deed of Trust,  dated  October  13,  1998,  by
          Leathers to Chicago  Title Company for the use and benefit of Chemical
          Trust  Company of  California  (incorporated  by  reference to Exhibit
          4.39(a) to the Form 10-K/A).

     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).

     4.40(a) First  Amendment to Deed of Trust,  dated  October 13, 1998, by Del
          Ranch to Chicago  Title  Company  for the use and  benefit of Chemical
          Trust  Company of  California  (incorporated  by  reference to Exhibit
          4.40(a) to the Form 10-K/A).

     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).
<PAGE>

     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 4.45 to the Funding Corporation II Form S-4).

     5.1  Opinion of Willkie  Farr & Gallagher  (incorporated  by  reference  to
          Exhibit 5.1 of the 99 Form S-4).

     5.2  Opinion of Latham & Watkins  (incorporated by reference to Exhibit 5.2
          of the 99 Form S-4).

     5.3  Opinion of Lionel  Sawyer & Collines  (incorporated  by  reference  to
          Exhibit 5.3 of the 99 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).

     10.1(c) Second Amendment to Salton Sea Deed of Trust,  Assignment of Rents,
          Security Agreement and Fixed Filing,  dated as of October 13, 1998, 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(c) to the Form 10-K/A).

     10.2 Collateral   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 10.3 to the Funding Corporation Form S-4).

     10.3 Contract 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 10.4 to the Funding
          Corporation Form S-4).

     10.4 Amendment 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 10.5 to the Funding
          Corporation Form S-4).
<PAGE>

     10.5 Amendment No. 2 to Unit 1 Power Purchase Agreement, dated November 29,
          1994,   between   Southern   California   Edison   Company   and  SSPG
          (incorporated by reference to Exhibit 10.6 to the Funding  Corporation
          Form S-4).

     10.6 Contract 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 10.7 to the Funding  Corporation
          Form S-4).

     10.7 Amendment  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 10.8 to the
          Funding Corporation Form S-4).

     10.8 Power  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
          10.9 to the Funding Corporation Form S-4).

     10.9 Power 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  10.10 to the
          Funding Corporation Form S-4).

     10.10Plant  Connection  Agreement (Unit 2), dated October 3, 1989,  between
          the Imperial Irrigation District and Earth Energy, Inc.  (incorporated
          by reference to Exhibit 10.11 to the Funding Corporation Form S-4).

     10.11Plant  Connection  Agreement,  dated August 2, 1988 (Unit 3),  between
          the   Imperial   Irrigation   District   and  Desert   Power   Company
          (incorporated by reference to Exhibit 10.12 to the Funding Corporation
          Form S-4).

     10.12Imperial  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 10.13
          to the Funding Corporation Form S-4).

     10.13Transmission Service Agreement,  dated as of October 3, 1989 (Unit 2),
          between  the  Imperial  Irrigation  District  and Earth  Energy,  Inc.
          (incorporated by reference to Exhibit 10.14 to the Funding Corporation
          Form S-4).

     10.14Transmission  Service Agreement,  dated as of August 2, 1988 (Unit 3),
          between the Imperial  Irrigation  District  and Desert  Power  Company
          (incorporated by reference to Exhibit 10.15 to the Funding Corporation
          Form S-4).

     10.15Plant  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 10.16 to the Funding Corporation
          Form S-4).

     10.16Letter Agreement,  dated February 2, 1995, between Magma Power Company
          and the Imperial  Irrigation  District  (incorporated  by reference to
          Exhibit 10.17 to the Funding Corporation Form S-4).

     10.17Transmission  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 10.18 to the Funding Corporation
          Form S-4).
<PAGE>

     10.18Transmission  Line  Construction  Agreement  (Unit 4),  dated July 14,
          1995,  between the Imperial  Irrigation  District,  SSPG and Fish Lake
          (incorporated by reference to Exhibit 10.19 to the Funding Corporation
          Form S-4).

     10.19Funding  Agreement,  dated June 15,  1988 (Unit 2),  between  Southern
          California  Edison  Company and Earth Energy,  Inc.  (incorporated  by
          reference to Exhibit 10.20 to the Funding Corporation Form S-4).

     10.20Second 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 10.21 to the Funding Corporation
          Form S-4).

     10.21Second  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 10.22 to the
          Funding Corporation Form S-4).

     10.22 Intentionally Omitted.

     10.23Collateral   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).

     10.24Administrative 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).

     10.25Amended  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).

     10.26Long 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).

     10.27Transmission  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).

     10.28Plant 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).

     10.29Amended 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).

     10.30Amended 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).

     10.31Long 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).

     10.32Transmission  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).

     10.33Plant  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).
<PAGE>

     10.34Amended 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).

     10.35Amended 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).

     10.36Long 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).

     10.37Transmission  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).

     10.38Plant  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).

     10.39Amended 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).

     10.40Amended 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).

     10.41Long 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).

     10.42Transmission  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).

     10.43Plant 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).

     10.44Funding  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).

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

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

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

     10.48Funding  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


<PAGE>