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, 1996
                         Commission File No. 33-95538

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


                                47-0790493
                              (IRS Employer
                           Identification No.)

Salton Sea Brine Processing, L.P.              California  33-0601721
Salton Sea Power Generation, L.P.              California  33-0567411
Fish Lake Power Company                        Delaware    33-0453364
Vulcan Power Company                           Nevada      95-3992087
CalEnergy Operating Company                    Delaware    33-0268085
Salton Sea Royalty Company                     Delaware    47-0790492
BN Geothermal Inc.                             Delaware    91-1244270
San Felipe Energy Company                      California  33-0315787
Conejo Energy Company                          California  33-0268500
Niguel Energy Company                          California  33-0268502
Vulcan/BN Geothermal Power Company             Nevada      33-3992087
Leathers, L.P.                                 California  33-0305342
Del Ranch, L.P.                                California  33-0278290
Elmore, L.P.                                   California  33-0278294
(Exact name of Registrants                 (State or other (I.R.S. Employer
as specified in their charters)            jurisdiction of Identification No.)
                                           incorporation or
                                           organization)

                302 S. 36th Street, Suite 400-A, Omaha, NE  68131
(Address of principal executive offices and Zip Code of Salton Sea
Funding Corporation)

Salton Sea Funding Corporation's telephone number,
including area code: (402) 231-1641

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

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

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

              Yes  X                  No

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

All common stock of Salton Sea Funding Corporation is indirectly held by
Magma Power Company.
100 Shares of Common Stock were outstanding on March 17, 1997

Documents incorporated by reference:  N/A


                        TABLE OF CONTENTS
                                
                                


PART I                                                          2
     ITEM 1.  Business                                          2
     The Exchange Offer                                         3
     Structure of and Collateral for the Securities             4
     The Projects                                               6
     Transaction Structure                                      7
          Salton Sea Projects                                   7
          Partnership Projects                                  7
          Royalties and Royalty Projects                        8
          Reliance on Single Utility Customer                   8
     Terms of the New Securities and the Old Securities         9
          Priority of Payments                                 12
          Debt Service Reserve Fund                            12
          Optional Redemption                                  13
          Mandatory Redemption                                 13
          Distributions                                        13
          Ranking and Security for the Securities              14
          Recourse Only to the Funding Corporation and the
               Guarantors                                      14
          Incurrence of Additional Debt                        14
          Principal Covenants                                  15
          The Project Notes                                    15
          Principal Covenants                                  16
          Considerations Regarding Limitation on Remedies      16
          Uncertainties Relating to Exploration and
               Development of Geothermal Energy Resources      16
     Insurance                                                 17
     Regulatory and Environmental Matters                      17
     Employees                                                 18
     ITEM 2:  Properties                                       18
     ITEM 3:  Legal Proceedings                                18
     ITEM 4:  Submission of Matters to a Vote of Security
          Holders                                              18



PART II                                                        19
     ITEM 5:  Market for Registrant's Common Equity and
          Related Stockholder's Matters                        19
     ITEM 6:  Selected Financial Data                          19
     Salton Sea Funding Corporation                            19
     Salton Sea Guarantors                                     20
     Partnership Guarantors                                    21
     Royalty Guarantor                                         22
     ITEM 7:  Management's Discussion and Analysis of
          Financial Condition and Results
                of Operations                                  23
     Factors Affecting Results of Operations                   23
     Power Purchase Agreements                                 23
     Capacity Utilizations                                     24
     Results of Operations for the Years Ended December 31,
          1996 and 1995                                        25
          Revenues                                             25
          Operating Expenses                                   25
          Depreciation and Amortization                        26
          Interest Expense                                     26
          Income Tax Provision                                 26
          Net Income                                           27
     Results of Operations for the Years Ended December 31,
          1995 and 1994                                        27
          Revenues                                             27
          Operating Expenses                                   27
          Depreciation and Amortization                        28
          Interest Expense                                     28
          Income Tax Provision                                 28
          Net Income                                           29
          Capital Resources and Liquidity                      29
          Changing Prices and the Effect of Inflation          30
     ITEM 8:  Financial Statements and Supplementary Data      31
     Index to Financial Statements - Salton Sea Funding
          Corporation                                          31
     Index to Financial Statements - Salton Sea Guarantors     31
     Index to Financial Statements - Partnership Guarantors    32
     Index to Financial Statements - Salton Sea Royalty
          Company                                              32
     Index to Financial Statements - Salton Sea Royalty
          Company - Predecessor                                32
     ITEM 9.  Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure               82


PART III                                                       83
     ITEM 10.  Directors and Executive Officers of the
          Registrant                                           83
     ITEM 11.  Executive Compensation                          84
     ITEM 12.  Security Ownership of Certain Beneficial
          Owners and Management                                84
          Description of Capital Stock                         84
          Principal Holders                                    84
     ITEM 13.  Certain Relationships and Related
          Transactions                                         84
     Other Relationships and Related Transactions              84
     Relationship of the Funding Corporation and the
          Guarantors to Magma and CalEnergy                    84


PART IV                                                        86
     ITEM 14.  Exhibits, Financial Statements Schedule and
          Reports on Form 8-K                                  86
     Signatures                                                87
     Index to Exhibits                                        102
     
PART 1

ITEM 1.   Business

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

   CalEnergy was formed in 1971 and is engaged in the exploration
for,   and   development   and  operation   of,   environmentally
responsible  independent  power production  facilities  worldwide
utilizing geothermal resources or other energy sources,  such  as
hydroelectric, natural gas, oil and coal.  CalEnergy owns all  of
the  capital  stock of Magma Power Company ("Magma").   CalEnergy
has an aggregate net ownership interest of 1,623 MW of electrical
generating  capacity  in  power  plants  in  operation  or  under
construction  in the United States and overseas,  which  have  an
aggregate  net capacity of 3,765 MW (including its  interests  in
the  Salton Sea Projects and the Partnership Projects as  defined
below).  As of December 31, 1996, CalEnergy had over $5.7 billion
in  assets  and its common stock is publicly traded  on  the  New
York,  Pacific and London Stock Exchanges under the symbol  "CE".
Approximately  32%  of CalEnergy's common stock  is  beneficially
owned, through indirect subsidiaries, by Peter Kiewit Sons,  Inc.
("Kiewit"),   a   privately   held   construction,   mining   and
telecommunications company headquartered in Omaha, Nebraska.

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

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

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

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

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

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

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

The Exchange Offer

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

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

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

Structure of and Collateral for the Securities

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

(i) in  the  case of the Salton Sea Guarantee, by a senior  first
    priority  lien  on  substantially all of the  assets  of  the
    Salton  Sea  Guarantors, a pledge of the equity interests  in
    the  Salton  Sea  Guarantors and an assignment  of  the  cost
    overrun  funding  commitment provided  by  CalEnergy  to  the
    Salton  Sea  Guarantors in connection  with  the  substantial
    completion  of  the Salton Sea Expansion (the  "Cost  Overrun
    Commitment");

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

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

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

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

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

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

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

The Projects

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

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

Salton Sea Projects

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

Subtotal                 119.4

Partnership Projects

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

Subtotal                 148.0

Total                    267.4


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


                     Transaction Structure

Salton Sea Projects

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

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

   Salton  Sea  Unit  I  and Salton Sea Unit IV  have  negotiated
contracts  with  Edison. The Salton Sea Unit 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 Unit IV  contract  also
provides  for fixed price capacity payments for the life  of  the
contract. Approximately 56% of the kWhs are sold under the Salton
Sea  Unit  IV  PPA at a fixed energy price, which is  subject  to
quarterly  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
Unit IV kWhs are sold according to a 10-year fixed price schedule
followed  by payments based on a modified Avoided Cost of  Energy
for the succeeding 5 years and at Edison's Avoided Cost of Energy
thereafter.

   All of the Salton Sea Projects, other than Salton Sea Unit IV,
have  been  operating for at least 5 years. The  three  operating
Salton  Sea  Projects  operated at a combined  facility  capacity
factor of 90.8% in 1994, 86.5% in 1995 and 90.4% in 1996.

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

Partnership Projects

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

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

   All  of  the Partnership Projects have been operating  for  at
least  5  years. The Partnership Projects operated at a  combined
facility  capacity factor of 103.8% in 1994, 105.9% in  1995  and
104.8% in 1996.

Royalties and Royalty Projects

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


              ROYALTIES TO BE PAID TO      ROYALTIES TO BE PAID TO
                 ROYALTY GUARANTOR         PARTNERSHIP GUARANTORS(1)
PROJECT   FACILITY  % ENERGY   % CAPACITY   % ENERGY% CAPACITY
          CAPACITY  REVENUES  REVENUES      REVENUES  REVENUES
                                 (MW)
Del Ranch     38     23.33       1.00       5.67      3.00
Elmore        38     23.33       1.00       5.67      3.00
Leathers      38     21.50       0.00       7.50      3.00
Vulcan        34      0.00       0.00       4.17      0.00
East Mesa Sr.
 Royalty(2)   37      4.00       4.00       0.00      0.00
Jr. Royalty   --     10.00      10.00       0.00      0.00

  Total      185


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

(2)The  East  Mesa Junior Royalties (which are due but  have  not
been  paid to date), are junior to debt service of the East  Mesa
Project.   The  East  Mesa Senior Royalties are  senior  to  debt
service of the East Mesa Project.

   The  East  Mesa Project has executed a long term  power  sales
agreement with Edison providing for fixed price capacity payments
for the life of the agreement and fixed price energy payments for
the first 10 years. Thereafter, the energy payments will be based
on Edison's Avoided Cost of Energy. The fixed price energy period
for  the East Mesa Project expires on December 31, 1999. The East
Mesa Project has been operating for over 5 years.

Reliance on Single Utility Customer

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

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

   Estimates  of  Edison's future Avoided  Cost  of  Energy  vary
substantially from year to year. The Funding Corporation and  the
Guarantors  cannot predict the likely level of  Avoided  Cost  of
Energy  prices  under  the  SO4 Agreements  with  Edison  at  the
expiration of the Scheduled Price Periods. Edison's Avoided  Cost
of  Energy  as  determined by the CPUC is currently substantially
below the scheduled energy prices for the Scheduled Price Periods
under the respective SO4 Agreements.  For the year ended December
1996,  the time period-weighted average of Edison's Avoided  Cost
of  Energy  was 2.5 cents per kWh, compared to the  time  period-
weighted  average  for  1996  energy  selling   prices
pursuant  to  the SO4 Agreements of approximately 9.7  cents  per
kWh,  for the combined Salton Sea and Partnership Projects. Thus,
the  revenues  generated by each of the Projects operating  under
SO4  Agreements  are  likely to decline significantly  after  the
expiration of the relevant Scheduled Price Period.

       Terms of the New Securities and the Old Securities

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

   The Securities are issued by Funding Corporation.  Payment  of
the  Securities  is guaranteed by the Partnership Guarantors  and
the Royalty Guarantor to the extent of their Available Cash Flow,
and  the  Salton Sea Guarantors.  The Interest Payment Dates  for
the  Securities  are May 30 and November 30, commencing  November
30, 1995.

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

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

  PAYMENT DATE           PERCENTAGE OF
                        PRINCIPAL AMOUNT
                         PAYABLE

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

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

  PAYMENT DATE           PERCENTAGE OF
                        PRINCIPAL AMOUNT
                          PAYABLE

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

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

  PAYMENT DATE           PERCENTAGE OF
                        PRINCIPAL AMOUNT
                          PAYABLE

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

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

  PAYMENT DATE           PERCENTAGE OF
                        PRINCIPAL AMOUNT
                          PAYABLE

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

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

  PAYMENT DATE           PERCENTAGE OF
                        PRINCIPAL AMOUNT
                          PAYABLE

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


Priority of Payments

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

Debt Service Reserve Fund

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

Optional Redemption

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


Mandatory Redemption

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


Distributions

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

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

Ranking and Security for the Securities

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

Recourse Only to the Funding Corporation and the Guarantors

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


Incurrence of Additional Debt

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

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

Principal Covenants

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

The Project Notes

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

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

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

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

Principal Covenants

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

Considerations Regarding Limitation on Remedies

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

Uncertainties   Relating  to  Exploration  and   Development   of
Geothermal Energy Resources

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

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

                               Insurance

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

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

              Regulatory and Environmental Matters

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


                           Employees

   Employees  necessary  for  the operation  of  the  Salton  Sea
Projects and the Partnership Projects are provided by CEOC, under
the operation and maintenance agreements described below.  As  of
December 31, 1996, CEOC employed approximately 209 people at  the
Salton  Sea  Projects and the Partnership Projects, collectively.
CEOC  employees  are  not  covered by any  collective  bargaining
agreement.  The Funding Corporation believes that CEOC's employee
relations are good.

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

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


Item 2.  Properties

  The Funding Corporation does not separately own or lease office
space  but  has  arranged  for a separate  suite  at  CalEnergy's
offices  in Omaha, Nebraska.  (See page 6 for a schedule  of  the
Guarantors facilities.)


Item 3.  Legal Proceedings

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


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

  Not applicable.

                            Part II


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

  Not applicable.

Item 6.  Selected Financial Data (Dollars in thousands)

Salton Sea Funding Corporation

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


                           Year Ended
                          December 31,    From June 20, 1995 (Inception Date)
                           1996 (2)          through December 31, 1995 (1)
                       ----------------  -----------------------------------
Total revenues              $40,567             $17,577
Interest expense             36,761              15,022
Provision for income taxes    1,273               1,048
Total expenses               38,746              16,070
Net income                    1,821               1,507



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

Notes receivables from affiliates          $538,982              $452,088
Total assets                                575,989               522,521
Senior secured notes and bonds              538,982               452,088
Total liabilities                           567,295               515,571
Stockholder's equity                          8,694                 6,950


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

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



Salton Sea Guarantors

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


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

Sales of electricity    $ 90,982$  71,605 $  74,576  $ 60,158
Total revenues            91,123   71,605    74,998    60,158
Operating expenses        27,175   26,096    24,766    19,336
Depreciation and 
 amortization             14,272   10,556    10,049     7,425
Interest expense, net of
 capitalized interest     14,645   15,605     8,240     4,267
Total expenses            56,092   52,257    43,055    31,027
Net income                35,031   17,955    31,943    29,131

Property, plant, contracts
 and equipment, net      484,182  417,287   204,329   211,409
Total assets             565,934  500,400   232,914   223,066
Loans payable                 --       --   114,308   140,000
Senior secured project
 note                    299,840  321,500      --          --
Total liabilities        374,562  330,801   114,936   140,566
Guarantors' equity       191,372  169,599   117,978    82,500

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

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

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

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

                                     Year Ended December 31,

                                    1996(1)   1995(2)    1994     1993    1992
Sales of electricity               $132,212  $76,909   $70,692  $65,579 $60,979
Total revenues                      140,226   87,483    76,050   70,057  65,523
Operating expenses                   58,945   32,143    35,306   35,597  34,357
Depreciation and amortization        33,974   18,958     9,037    9,249   8,597
Interest expense, net of
 capitalized interest                 4,848    8,826     3,285    3,712   4,782
Total expenses                       97,767   59,927    47,628   48,558  47,736
Provision for income taxes           16,700   11,492    11,284    8,405   6,973
Net income                           25,759   14,637    17,138   13,094   6,620

Property, plant, contracts
 and equipment, net                 364,849  298,956   137,265  138,664 145,060
Total assets                        742,183  602,172   180,443  178,894 183,899
Loans payable                             -   43,766    52,340   60,119  67,365
Senior secured project note         182,204   62,706         -        -       -
Total liabilities                   314,121  228,440    74,048   75,507  78,192
Guarantors' equity                  428,062  373,732   106,395  103,387 105,707

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

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

Royalty Guarantor

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

                                            Year Ended December 31,
                                    1996    1995 (2)   1994 (3)   1993    1992
Total revenues(1)                $30,143    $28,383    $29,410  $26,942 $29,355
Operating expenses                 7,288      6,822    20,753    5,710    5,203
Depreciation and amortization     10,280     11,239         -        -        -
Interest expense                   5,246      4,757         -        -        -
Provision for income taxes         2,560        963      N/A      N/A       N/A
Total expenses(1) (3)             25,374     24,873    20,753    5,710    5,203
Net income(1)                      4,769      3,510     8,657   21,232   24,152

Royalty stream, net               44,372     53,744
Total assets                      91,073    117,341
Senior secured project note       56,936     67,882
Total liabilities                 81,233     89,290
Guarantor's equity                 9,840     28,051

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

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

(3)During  1994,  the  Royalty Guarantor charged  off  is  entire
  outstanding  accrued  Junior SO4 royalty  receivable  from  GEO
  East  Mesa.  The charge amounted to $14,502 and is included  in
  operating  expenses.  Excluding the one time charge,  operating
  expenses would have been $6,251 and net income would have  been
  $23,159.
Item  7.    Management's  Discussion and  Analysis  of  Financial
Condition and Results of Operations
(Dollars in thousands)


Factors Affecting Results of Operations

   Funding  Corporation was organized for  the  sole  purpose  of
acting  as issuer of the Securities.  The Securities are  payable
from  the proceeds of payments made of principal and interest  on
the  Senior  Secured  Notes and Bonds by the Guarantors,  to  the
Funding  Corporation.  The Securities are guaranteed on  a  joint
and  several  basis  by the Guarantors.  The  guarantees  of  the
Partnership  Guarantors  and Royalty  Guarantor  are  limited  to
available  cash flow.  The Funding Corporation does  not  conduct
any operations apart from issuing the Securities.

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


Power Purchase Agreements

   Each of the Projects sells electricity to Edison pursuant to a
separate  SO4 Agreement or a negotiated power purchase agreement.
Each  power purchase agreement is independent of the others,  and
performance  requirements  specified within  one  such  agreement
apply  only  to  the Project which is subject to that  agreement.
The  power purchase agreements provide for three basic  types  of
payments:  energy  payments, capacity payments  and,  in  certain
cases,  capacity  bonus  payments.   Edison  makes  fixed  annual
capacity  payments  to  the projects, and,  to  the  extent  that
capacity factors exceed certain benchmarks, is required  to  make
capacity  bonus  payments.  The price for capacity  and  capacity
bonus  payments  is fixed for the life of the SO4 Agreements  and
are significantly higher in the months of June through September.
Energy is sold at increasing fixed rates for the first ten  years
of  each  contract  and thereafter at Edison's  Avoided  Cost  of
Energy.

   The Partnership Projects sell all electricity generated by the
respective  plants  pursuant  to four  long-term  SO4  Agreements
between the project and Edison.  These SO4 Agreements provide for
capacity  payments, capacity bonus payments and energy  payments.
Edison makes fixed annual capacity payments to the projects,  and
to  the extent that capacity factors exceed certain benchmarks is
required to make capacity bonus payments.  The price for capacity
and  capacity  bonus payments is fixed for the life  of  the  SO4
Agreements.   Energy is sold at increasing fixed  rates  for  the
first  ten  years  of  each contract and thereafter  at  Edison's
Avoided Cost of Energy.

  The scheduled energy price periods of the Partnership Projects'
SO4  Agreements  extended  until February  1996  for  the  Vulcan
Partnership  and extend until December 1998, December  1998,  and
December  1999  for  each of the Del Ranch, Elmore  and  Leathers
Partnerships, respectively.  Excluding Vulcan, which is receiving
Edison's  Avoided Cost of Energy, the Parthership  Projects'  SO4
Agreements provide for energy rates ranging from 12.6  cents  per
kWh in 1996 to 15.6 cents per kWh in 1999.

   The  Salton Sea I Project sells electricity to Edison pursuant
to a 30-year negotiated power purchase agreement, as amended (the
"Salton  Sea  I  PPA"), which provides for  capacity  and  energy
payments.   The energy payment is calculated using a  Base  Price
which  is  subject to quarterly adjustments based on a basket  of
indices.   The  time period weighted average energy  payment  for
Unit  I was 5.1 cents per kWh during 1996.  As the Salton  Sea  I
PPA is not an SO4 Agreement, the energy payments do not revert to
Edison's  Avoided  Cost  of  Energy.   The  capacity  payment  is
approximately $1,100 per annum.

   The Salton Sea II and Salton Sea III Projects sell electricity
to  Edison  pursuant  to  30-year modified  SO4  Agreements  that
provide for capacity payments, capacity bonus payments and energy
payments.  The price for contract capacity and contract  capacity
bonus  payments  is  fixed  for the  life  of  the  modified  SO4
Agreements.   The energy payments for the first ten year  period,
which  period  expires  in  April 2000  and  February  1999,  are
levelized at a time period weighted average of 10.6 cents per kWh
and  9.8  cents  per kWh for Salton Sea II and  Salton  Sea  III,
respectively.  Thereafter, the monthly energy payments will be at
Edison's Avoided Cost of Energy.  For Salton Sea II only,  Edison
is entitled to receive, at no cost, 5% of all energy delivered in
excess  of 80% of contract capacity for the period April 1,  1994
through  March 31, 2004.   The annual capacity and bonus payments
for Salton Sea II and Salton Sea III are approximately $3,300 and
$9,700, respectively.

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

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

Capacity Utilizations

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

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

                                   Year Ended December 31,
                                 1996        1995        1994
 Overall capacity factor          90.4%      86.5%        90.8%
 Capacity NMW (average)          103.0       79.8         79.8
 Kwh produced (in thousands)   817,400    604,300      634,890

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

                                   Year Ended December 31,
                                    1996        1995        1994
 Operating capacity factor          104.8%     105.9%       103.8%
 Capacity NMW (average)             148.0      148.0        148.0
  Kwh  produced  (in thousands)   1,361,800  1,373,310    1,346,000


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

Revenues

     The Salton Sea Guarantors' sales of electricity increased to
$90,982 for the year ended December 31, 1996 from $71,605 for the
same  period last year, a 27.1% increase.  This increase was  due
primarily  to  the  addition of Salton  Sea  IV  which  commenced
operations in June 1996 and increased electric production at  the
other plants.


      The  Partnership Guarantors' sales of electricity increased
to $132,212 for the year ended December 31, 1996 from $76,909 for
the same period in 1995, a 71.9% increase.  This increase was due
primarily to the Partnership Interest Acquisition in April  1996.
This  increase  was  offset by a decline in revenue  from  Vulcan
which  reached the end of its scheduled price period and  started
receiving revenue at avoided cost rates in February 1996.

      The Royalty Guarantor revenue increased to $30,143 for  the
year  ended  December 31, 1996 from $28,383 for the  same  period
last year.  The increase in royalty revenue is the result of  the
higher  energy sales at the Partnership Projects compared to  the
prior year resulting in higher royalties.

   Interest  and  other  income  for the  Partnership  Guarantors
decreased  to  $8,014 for the year ended December 31,  1996  from
$10,574   for  the  same  period  in  1995.   The  decrease   was
attributable to lower cash balances.


Operating Expenses

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

       The  Partnership  Guarantors'  operating  expenses,  which
include   royalty,  operating,  and  general  and  administrative
expenses,  increased to $58,945, or 4.90 cents per kWh,  for  the
year ended December 31, 1996, from $32,143 or 5.52 cents per  kWh
for the same period in 1995.  The 83.4% increase in costs was due
primarily to the Partnership Interest Acquisition.

      The  Royalty  Guarantor's operating expenses  increased  to
$7,288  for the year ended December 31, 1996 from $6,822 for  the
same period of 1995, a 6.8% increase.  This increase was due to a
scheduled increase in third party lessor royalties related to the
increases in the Partnership Projects' sales of electricity.

Depreciation and Amortization

      The  Salton  Sea Guarantors' depreciation and  amortization
increased  to $14,272 for the year ended December 31,  1996  from
$10,556  for  the year ended December 31, 1995,  an  increase  of
35.2%.  This  increase was primarily due to the  commencement  of
operations  at Salton Sea Unit IV.  Depreciation and amortization
for  the  year  ended December 31, 1996 was 1.75  cents  per  kWh
compared  to  1.75 cents per kWh in the year ended  December  31,
1995.

      The  Partnership Guarantors' depreciation and  amortization
increased  to $33,974 for the year ended December 31,  1996  from
$18,958  for  the  same period in 1995, a 79.2%  increase.   This
increase   was   primarily  due  to  the   Partnership   Interest
Acquisition in April 1996.

   The  Royalty Guarantor's amortization was $10,280 for the year
ended  December 31, 1996 compared with $11,239 for the year ended
December  31,  1995.  This decrease is consistent with  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 $14,645  for  the  year  ended
December 31, 1996 from $15,605 for the same period in 1995.  This
decrease  is  due  primarily  to the capitalization  of  interest
related   to  the  Salton  Sea  Unit  IV  expansion  during   the
construction  period and the mineral extraction project  and  the
timing  of  current  year  debt  payments  partially  offset   by
increased  indebtedness from the issuance of the  senior  secured
project notes in July of 1995.

      The  Partnership  Guarantors'  interest  expense,  net   of
capitalized  amounts,  decreased to $4,848  for  the  year  ended
December  31, 1996 from $8,826 for the same period in 1995.   The
decrease   is   a  result  of   scheduled  debt  repayments   and
capitalization  of  interest on the mineral  extraction  project,
partially  offset by the issuance of $135,000 of  senior  secured
project notes in June of 1996.

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


Income Tax Provision

      The  Salton  Sea Guarantors are substantially comprised  of
partnerships.   Income  taxes  are  the  responsibility  of   the
partners and Salton Sea Guarantors have no obligation to  provide
funds  to  the  partners  for payment  of  any  tax  liabilities.
Accordingly, the Salton Sea Guarantors have no tax obligations.

      The  Partnership Guarantors' income tax provision increased
to  $16,700 for the year ended December 31, 1996 from $11,492 for
the  same  period in 1995.  The increase in the  provision  is  a
result  of  the  additional income from the Partnership  Interest
Acquisition.   Income taxes will be paid by  the  parent  of  the
Guarantors  from  distributions to  the  parent  company  by  the
Guarantors which occur after operating expenses and debt service.

   The  Royalty  Guarantor's income tax  provision  increased  to
$2,560  for  the year ended December 31, 1996 from $963  for  the
same  period  in  1995.   The increase in the  provision  can  be
attributed  to  an  increase  in  current  year  earnings.    Tax
obligations  of  the Royalty Guarantor will be  remitted  to  the
parent  company only to the extent of cash flows available  after
operating expenses and debt service.

Net Income

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

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

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

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

Results  of Operations for the Years Ended December 31, 1995  and
1994

Revenues

     The Salton Sea Guarantors' sales of electricity decreased to
$71,605 for the year ended December 31, 1995 from $74,576 for the
same  period last year, a 4.0% decrease.  This was due to a  4.8%
decrease  in electric kWh sales to 604.3 million kWh  from  634.9
million  kWh,  which was a result of the scheduled  overhauls  at
Salton  Sea Units I, II and III, partially offset by an  increase
in the energy price for Salton Sea Unit I.

      The  Partnership Guarantors' sales of electricity increased
to  $76,909 for the year ended December 31, 1995 from $70,692 for
the  same  period in 1994, an 8.8% increase.  This was due  to  a
2.0%  increase in electric kWh sales to 1,373.3 million kwh  from
1,346.0  million kWh and an increased price per kWh in accordance
with the SO4 Agreements.

      The Royalty Guarantor revenue decreased to $28,383 for  the
year  ended  December 31, 1995 from $29,410 for the  same  period
last year.  The decrease in royalty revenue is the result of  the
Royalty Guarantor no longer recording the earned but unpaid  East
Mesa  Junior  Royalties,  which is a result  of  the  uncertainty
related   to  the  East  Mesa  Project  obtaining  the  long-term
financing  which  is  a  prerequisite to  the  payment  of  these
royalties.

      Interest  and  other income for the Partnership  Guarantors
increased  to $10,574 for the year ended December 31,  1995  from
$5,358   for   the  same  period  in  1994.   The  increase   was
attributable  to  higher  cash balances and  the  Magma  Services
Agreement  which went into effect on July 20, 1995.   Fee  income
related  to  the  Magma Services Agreement  for  the  year  ended
December 31, 1995 was $4,457.


Operating Expenses

     The Salton Sea Guarantors' operating expenses, which include
royalty,  operating,  and  general and  administrative  expenses,
increased  to $26,096, or 4.32 cents per kWh, for the year  ended
December  31, 1995, from $24,766 or 3.90 cents per  kWh  for  the
same  period  in  1994.   The increase in  expenses  was  due  to
scheduled overhauls at Salton Sea Units I, II and III.

     The Partnership Guarantor' operating expenses, which include
royalty,  operating,  and  general and  administrative  expenses,
decreased  to $32,143, or 5.52 cents per kWh, for the year  ended
December  31, 1995, from $35,306 or 6.21 cents per  kWh  for  the
same  period  in 1994.  The 9.0% decrease in costs was  primarily
due to the implementation of certain cost savings measures at the
partnership  level, including a reduction in labor costs  at  the
time of the Magma acquisition.

      The  Royalty  Guarantor's operating expenses  increased  to
$6,822  for the year ended December 31, 1995 from $6,251 for  the
same period of 1994, a 9.1% increase.  This increase was due to a
scheduled increase in third party lessor royalties related to the
increases in the Partnership Projects' sales of electricity.


Depreciation and Amortization

      The  Salton  Sea Guarantors' depreciation and  amortization
increased  to $10,556 for the year ended December 31,  1995  from
$10,049  for  the year ended December 31, 1994,  an  increase  of
5.0%.   Depreciation and amortization for the year ended December
31, 1995 was 1.75 cents per kWh compared to 1.58 cents per kWh in
the year ended December 31, 1994.

      The  Partnership Guarantors' depreciation and  amortization
increased  to $18,958 for the year ended December 31,  1995  from
$9,037  for  the  same period in 1994, a 109.8%  increase.   This
increase  was  due  to the Magma Acquisition purchase  accounting
effect  which  results in the allocation of  goodwill,  including
amortization, and the additional depreciation due to  the  excess
of  fair  market value assigned to assets over the previous  book
value.

   The  Royalty Guarantor's amortization totaled $11,239 for  the
year ended December 31, 1995 and represented amortization of  the
royalty stream and goodwill.


Interest Expense

       The  Salton  Sea  Guarantors'  interest  expense,  net  of
capitalized  amounts, increased to $15,605  for  the  year  ended
December  31, 1995 from $8,240 for the same period in 1994.   The
increase  is a result of increased indebtedness from the issuance
of  the  Senior Secured Project Notes and the purchase accounting
allocation of the indebtedness incurred in conjunction  with  the
Magma Acquisition.

    The   Partnership  Guarantors'  interest  expense,   net   of
capitalized  amounts,  increased to $8,826  for  the  year  ended
December  31, 1995 from $3,285 for the same period in 1994.   The
increase  is a result of increased indebtedness from the issuance
of  the  Senior Secured Project Notes and the purchase accounting
allocation of the indebtedness incurred in conjunction  with  the
Magma Acquisition.

      The Royalty Guarantors' interest expense for the year ended
December 31, 1995 was $4,757 which related to the issuance of the
Senior Secured Project Notes and the aforementioned allocation of
indebtedness incurred in conjunction with the Magma acquisition.


Income Tax Provision

      The Salton Sea Guarantors are comprised of partnerships and
one  company  which  has a partial interest  in  the  Salton  Sea
expansion.   Income taxes are the responsibility of the  partners
and Salton Sea Guarantors have no obligation to provide funds  to
the  partners  for payment of any tax liabilities.   Accordingly,
the Salton Sea Guarantors have no tax obligations.

      The Partnership Guarantor income tax provision increased to
$11,492 for the year ended December 31, 1995 from $11,284 for the
same period in 1994.  Income taxes will be paid by the parent  of
the  Guarantors from distributions to the parent company  by  the
Guarantors which occur after operating expenses and debt service.


   The Royalty Guarantor's income tax provision was $963 for  the
year  ended  December 31, 1995.  Tax obligations of  the  Royalty
Guarantor  will  be remitted to the parent company  only  to  the
extent of cash flows available after operating expenses and  debt
service.

Net Income

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

      The  Salton Sea Guarantors' net income decreased to $17,955
for the year ended December 31, 1995, compared to $31,943 for the
year  ended December 31, 1994 due primarily to increased interest
expense  and  depreciation and amortization  resulting  from  the
Magma Acquisition.

      The Partnership Guarantors' net income decreased to $14,637
for the year ended December 31, 1995, compared to $17,138 for the
year  ended December 31, 1994 due primarily to increased interest
expense  and  depreciation and amortization  resulting  from  the
Magma Acquisition.

      The Royalty Guarantor's net income decreased to $3,510  for
the year ended December 31, 1995, compared to $8,657 for the year
ended  December  31,  1994 due primarily  to  increased  interest
expense and amortization resulting from the Magma Acquisition.

Capital Resources and Liquidity

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

   On April 17, 1996 CalEnergy completed the indirect acquisition
of   Edison   Mission   Energy's   partnership   interests   (the
"Partnership Interest Acquisition") in four geothermal  operating
facilities  in  California for a cash purchase price  of  $71,000
including  acquisition costs and transferred these  interests  to
Vulcan  Power Company and CalEnergy Operating Company.  The  four
projects,  Vulcan,  Hoch  (Del Ranch), Leathers  and  Elmore  are
located  in  the Imperial Valley of California.   Prior  to  this
transaction, Magma was a 50% owner of these facilities.

      CalEnergy  had  acquired  all  of  the  outstanding  equity
interest  in Magma in a two-step transaction accounted for  as  a
purchase according to the terms of a merger agreement whereby  on
January  10, 1995, CalEnergy acquired approximately  51%  of  the
outstanding  shares  of  Magma common stock  (the  "Magma  Common
Stock")  through a cash tender offer (the "Magma  Tender  Offer")
and on February 24, 1995 CalEnergy acquired the remaining 49%  of
Magma  Common Stock not owned by CalEnergy through a merger  (the
"Merger").

      In  July  1995 CalEnergy recapitalized Magma and  the  debt
required   to   complete  the  Magma  Acquisition  ("the   Merger
Facilities") from proceeds received through the issuance of notes
and bonds as described below.

      On July 21,1995 CalEnergy issued $200,000 of 9 7/8% Limited
Recourse Senior Secured Notes Due 2003 (the "Notes").  The  Notes
are   secured  by  an  assignment  and  pledge  of  100%  of  the
outstanding  capital stock of Magma.  On or  prior  to  June  30,
1998, CalEnergy may, at its option, redeem up to an aggregate  of
35%  of the principal amount of the Notes originally issued at  a
redemption price equal to 109.875% of the

principal  amount thereof plus accrued interest to the redemption
date.   The  Notes are redeemable at the option of CalEnergy,  in
whole  or  in  part,  at  the  redemption  prices  of  104.9375%,
102.46875%  and 100%, on or after June 30, 2000, 2001  and  2002,
respectively, plus accrued interest to the date of redemption.

    On  June  20, 1996 and July 21, 1995, the Funding Corporation
completed  sales  to  institutional  investors  of  $135,000  and
$475,000, respectively, of Salton Sea Notes and Bonds (the "Notes
and  Bonds").   The  Funding  Corporation  debt  securities  were
offered as follows:
                Senior Secured Series          Due       Rate         Amount
July 21, 1995        A Notes              May 30, 2000   6.69%      $232,750
July 21, 1995        B Bonds              May 30, 2005   7.37%       133,000
July 21, 1995        C Bonds              May 30, 2010   7.84%       109,250
June 20, 1996        D Notes              May 30, 2000   7.02%        70,000
June 20, 1996        E Bonds              May 30, 2011   8.30%        65,000

    The  Salton Sea Notes and Bonds are secured by the  Company's
four  existing Salton Sea plants as well as an assignment of  the
right to receive various royalties payable to Magma in connection
with  its  Imperial Valley properties and distributions from  the
Partnership Project.


Changing Prices and the Effect of Inflation

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

Item 8.     Financial Statements and Supplementary Data.


                 SALTON SEA FUNDING CORPORATION
                 INDEX TO FINANCIAL STATEMENTS



SALTON SEA FUNDING CORPORATION

Independent auditors' report--Deloitte & Touche LLP         33

Balance sheets as of December 31, 1996 and 1995             34

Statements of operations for the year ended December 31,
1996 and for the  period from June 20, 1995 (inception 
date) through  December 31, 1995                            35

Statements  of  stockholder's equity for the year ended
December 31, 1996 and for the period from June 20, 1995
(inception date) through  December 31, 1995                 36

Statements of cash flows for the year ended December 31,
1996 and for the  period from June 20, 1995 (inception 
date) through  December 31, 1995                            37

Notes to financial statements                               38


SALTON SEA GUARANTORS

Independent auditors' report--Deloitte & Touche LLP         40

Reports of independent accountants--Coopers
& Lybrand L.L.P.                                            41

Combined balance sheets as of December 31, 1996  and 1995   42

Combined  statements of operations for the years
ended  December 31, 1996 and 1995 (Successor) and
1994 (Predecessor)                                          43

Combined  statements of Guarantors' equity for  the
years  ended December 31, 1996 and 1995 (Successor)
and 1994 (Predecessor)                                      44

Combined  statements of cash flows for the years
ended  December 31, 1996 and 1995 (Successor) and
1994 (Predecessor)                                          45

Notes to combined financial statements                      46
PARTNERSHIP GUARANTORS

Independent auditors' report--Deloitte & Touche LLP         52

Reports  of  independent accountants--Coopers
&  Lybrand  L.L.P.                                          53

Combined balance sheets as of December 31, 1996 and 1995    54

Combined  statements of operations for the years
ended  December 31, 1996 and 1995 (Successor) and
1994 (Predecessor)                                           55

Combined  statements of Guarantors' equity for  the
years  ended December 31, 1996 and 1995 (Successor)
and 1994 (Predecessor)                                       56

Combined  statements of cash flows for the years
ended  December 31, 1996 and 1995 (Successor) and
1994 (Predecessor)                                           57

Notes to combined financial statements                       58

SALTON SEA ROYALTY COMPANY

Independent auditors' report--Deloitte & Touche LLP         69

Balance sheets as of December 31, 1996 and 1995             70

Statements  of operations for the years ended
December  31,  1996 and 1995                                71

Statements of equity for the years ended December 31,
1996  and 1995                                              72

Statements of cash flows for the years ended December 31,
1996 and 1995                                               73

Notes to financial statements                               74


SALTON SEA ROYALTY COMPANY--PREDECESSOR

Report of independent accountants--Coopers & Lybrand L.L.P. 78

Predecessor summary of revenues and related expenses for
the year ended December 31, 1994                            79

Notes to predecessor summary of revenues and related
expenses                                                    80


                 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, 1996  and  1995  and  the
related  statements of operations, stockholder's equity and  cash
flows  for  the year ended December 31, 1996 and for  the  period
from  June  20, 1995 (inception date) through December 31,  1995.
These   financial  statements  are  the  responsibility  of   the
Company's  management.   Our  responsibility  is  to  express  an
opinion on these financial statements based on our audits.

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

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




DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 31, 1997


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




                                          December 31,
                                         1996         1995

ASSETS
Cash                                 $  13,218     $  4,393
Restricted cash                         14,044       57,256
Prepaid expenses and other assets        3,452        3,070
Secured project notes from Guarantors  538,982      452,088
Investment in 1% of net assets of
  Guarantors                            6,293         5,714
                                   -----------  -----------
                                      $575,989     $522,521
                                       =======      =======

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Accrued liabilities                  $   3,291    $   3,889
Due to affiliates                       25,022       59,594
Senior secured notes and bonds         538,982      452,088
                                   -----------  -----------
  Total liabilities                    567,295      515,571


Stockholder's equity:
Common stock--authorized 1,000
  shares, par value $.01 per share;
  issued and outstanding 100 shares          -            - 
Additional paid-in capital               5,366        5,443
Retained earnings                        3,328        1,507
                                   -----------  -----------
  Total stockholder's equity             8,694        6,950
                                   -----------  -----------
                                      $575,989     $522,521
                                       =======      =======


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


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


                                                          For the Period
                                                        From June 20, 1995
                                   For the Year          (inception date)
                                      Ended                   through
                                  December 31, 1996     December  31, 1995

Revenues:

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

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


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


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




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

Balance, June 20, 1995
    (inception  date)             100        -      3,267           -     3,267
Adjustments resulting from
 capital transactions of
 Guarantors                         -        -     2,176            -     2,176
Net income                          -        -         -        1,507     1,507
                              --------------------------------------------------
Balance, December 31, 1995        100        -     5,443        1,507     6,950
Adjustments resulting from capital
  transactions of Guarantors        -        -       (77)           -       (77)
Net income                          -        -         -        1,821     1,821
                             -------- --------  --------   ----------   --------
Balance, December 31, 1996        100   $    -    $5,366       $3,328    $8,694
                                =====    =====     =====   ==========   ========


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

                SALTON SEA FUNDING CORPORATION
                   STATEMENTS OF CASH FLOWS
                    (Dollars in Thousands)
                                                         For the Period
                                            For the      From June 20, 1995
                                           Year Ended  (Inception Date) through
                                        December 31, 1996  December 31, 1995

Cash flows from operating activities:
  Net income                                   $  1,821      $  1,507
  Adjustments to reconcile net income to net
   cash provided by operating activities:
  Equity in earnings of guarantors                 (656)         (271)
  Changes in assets and liabilities:
   Prepaid expenses and other assets               (382)       (3,070)
   Accrued liabilities                             (598)        3,889
                                              -----------  ------------
  Net cash flows from operating activities          185         2,055
                                              -----------  ------------
Cash flows from investing activities:
  Decrease (increase) in restricted cash         43,212       (57,256)
  Secured project notes of Guarantors          (135,000)     (475,000)
  Principal repayments of secured project
    notes of Guarantors                          48,106        22,912
                                             ------------  ------------
  Net cash flows from investing activities      (43,682)     (509,344)
                                             ------------  ------------
Cash flows from financing activities:
  Proceeds from offering of senior secured notes
   and bonds                                    135,000       475,000
  Repayment of senior secured project notes
   and bonds                                    (48,106)      (22,912)
  Due to affiliates                             (34,572)       59,594
                                              -----------  ------------
  Net cash flows from financing activities       52,322       511,682
                                              -----------  ------------
  Net change in cash                              8,825         4,393
  Cash at the beginning of period                 4,393             -
                                              ----------  ------------
  Cash at the end of period                    $ 13,218     $   4,393
                                                 =======       =======
Non-cash investing and financing activities:
  Adjustments resulting from capital transactions
   of Guarantors                              $     (77)    $   2,176
                                                  =======      =======

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


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


1. THE PURPOSE AND BUSINESS OF SALTON SEA FUNDING CORPORATION

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

   The  Securities are payable from the proceeds of payments made
of  principal and interest on the Senior Secured Notes and  Bonds
by  the Guarantors, as defined, to the Funding Corporation.   The
Securities  are guaranteed on a joint and several  basis  by  the
Salton Sea Guarantors, the Partnership Guarantors and Salton  Sea
Royalty  Company (collectively the "Guarantors").  The guarantees
of  the Partnership Guarantors and Salton Sea Royalty Company are
limited to available cash flow.  The Funding Corporation does not
conduct any operations apart from issuing the Securities.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Investment in Guarantors

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

Restricted Cash

The  restricted cash balance primarily includes commercial paper,
money  market  securities and mortgage backed securities  and  is
composed  of amounts deposited in restricted accounts from  which
the Funding Corporation will source its debt service requirements
for the Securities.

Income Taxes

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


Fair Values of Financial Instruments

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


Use of Estimates

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


3. SENIOR SECURED NOTES AND BONDS

  On  June  20,  1996 and July 21, 1995, the Funding  Corporation
completed  sales  to  institutional  investors  of  $135,000  and
$475,000, respectively, of Salton Sea Notes and Bonds (the "Notes
and  Bonds").  The  Funding Corporation's  debt  securities  were
offered as follows:
                       Senior Secured Series      Due        Rate     Amount
July 21, 1995                 A Notes         May 30, 2000   6.69%   $232,750
July 21, 1995                 B Bonds         May 30, 2005   7.37%    133,000
July 21, 1995                 C Bonds         May 30, 2010   7.84%    109,250
June 20, 1996                 D Notes         May 30, 2000   7.02%     70,000
June 20, 1996                 E Bonds         May 30, 2011   8.30%     65,000

Principal maturities of the Senior Secured Notes and Bonds are as follows:

         1997            $  90,228
         1998              106,938
         1999               57,836
         2000               25,072
         2001               22,376
         Thereafter        236,532
                       -----------
                          $538,982
                           =======

The  carrying  amounts and estimated fair values  of  the  Senior
Secured  Notes  and  Bonds at December 31,  1996  and  1995  were
$538,982 and $531,807 and $452,088 and $459,629, respectively.
                  INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

      We have audited the accompanying combined balance sheets of
the  Salton Sea Guarantors as of December 31, 1996 and 1995,  and
the   related   combined  successor  statements  of   operations,
Guarantors'  equity  and cash flows for  the  years  then  ended.
These  financial statements are the responsibility of the  Salton
Sea Guarantors' management.  Our responsibility is to express  an
opinion on these financial statements based on our audits.

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

      In  our opinion, such combined financial statements present
fairly, in all material respects, the financial position  of  the
Salton  Sea Guarantors as of December 31, 1996 and 1995  and  the
results  of its operations and its cash flows for the years  then
ended   in   conformity   with  generally   accepted   accounting
principles.



DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 31, 1997


               REPORT OF INDEPENDENT ACCOUNTANTS


Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

      We  have  audited  the  accompanying  combined  predecessor
statements  of operations, Guarantors' equity and cash  flows  of
Salton  Sea  Guarantors  for the year ended  December  31,  1994.
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 audit.

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

       In   our   opinion,  the  combined  predecessor  financial
statements  referred  to above present fairly,  in  all  material
respects, the historical combined results of operations and  cash
flows  of  the Salton Sea Guarantors for the year ended  December
31,   1994  in  conformity  with  generally  accepted  accounting
principles.




COOPERS & LYBRAND L.L.P.

San Diego, California
June 19, 1995,


                     SALTON SEA GUARANTORS
                    COMBINED BALANCE SHEETS
                     (Dollars in Thousands)


                                                          December 31,
                                                         1996     1995

Cash                                                  $     -  $   454
Accounts receivable                                    14,954   10,436
Prepaid expenses and other assets                      16,008   20,129
Property, plant, contracts and equipment, net4         84,182  417,287
Excess of cost over fair value of net assets 
 acquired,  net                                        50,790   52,094
                                                  ------------------------
                                                     $565,934 $500,400
                                                      =======  =======
LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                                     $    642 $    939
Accrued liabilities                                     9,989    4,043
Due to affiliates                                      64,091    4,319
Senior secured project note                           299,840  321,500
                                                  ------------------------
Total liabilities                                     374,562  330,801

Commitments and contingencies (Notes 2,5 and 6)

Total Guarantors' equity                              191,372  169,599
                                                 ------------------------
                                                     $565,934 $500,400
                                                      =======  =======



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


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



                                   Year Ended December 31,
                                1996     1995      1994
                                  Successor     Predecessor
Revenues:
Sales of electricity            $90,982  $71,605   $74,576
Interest and other income           141        -       422
                             ------------------------------
Total Revenues                   91,123   71,605    74,998
                             ------------------------------

Expenses:
Operating, general and
  administrative expenses        27,175   26,096    24,766
Depreciation and amortization    14,272   10,556    10,049
Interest expense                 24,866   24,783     8,240
Less capitalized interest      (10,221)  (9,178)         -
                             --------------------- ----------
Total expenses                   56,092   52,257    43,055
                             ------------------------------
Income before minority interest  35,031   19,348    31,943
Minority interest                     -    1,393         -
                             ------------------------------
Net income                      $35,031  $17,955   $31,943
                                 ======   ======    ======


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


                     SALTON SEA GUARANTORS
           COMBINED STATEMENTS OF GUARANTORS' EQUITY
           FOR THE THREE YEARS ENDED DECEMBER 31, 1996
                    (Dollars in Thousands)

Predecessor:

Balance, January 1, 1994                      $    82,500

Contributions                                      12,285
Distributions                                      (8,750)
Net income                                         31,943
                                               ------------
Balance, December 31, 1994                        117,978
Net income in 1995 prior to acquisition             1,393

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

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

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


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

                                                   Year  Ended  December 31,
                                                    1996     1995        1994

Successor
Predecessor
Cash flows from operating activities:
 Net income                                     $  35,031  $  17,955    $31,943
Adjustments to reconcile net income to net
 cash provided by operating activities:
  Minority interest                                     -      1,393          -
  Depreciation and amortization                    14,272     10,556     10,049
  Changes in assets and liabilities:
   Accounts receivable                             (4,518)       169       (993)
   Prepaid expenses and other assets                4,121    (19,236)      (869)
    Accounts  payable and accrued liabilities       5,649      4,354         62
   Other                                                -                  (583)
                                           ------------------------------------
Net cash flows from operating activities           54,555     15,191     39,609
                                           ------------------------------------
Cash flows from investing activities:
 Purchase of Guarantors by CalEnergy,
 net of cash acquired                                   -   (171,964)         -
 Capital expenditures                             (79,863)   (68,677)    (4,493)
  Net  decrease (increase) in marketable
  securities                                            -      4,988     (4,945)
 Decrease (Increase) restricted cash                    -      3,400     (3,400)
                                          ------------------------------------
Net cash flows from investing activities          (79,863)  (232,253)   (12,838)
                                          ------------------------------------
Cash flows from financing activities:
  Repayments of senior secured project note       (21,660)  (302,172)  (155,692)
 Loan proceeds                                          -    509,364    130,000
 Contributions from parent                              -     10,606     12,285
 Distributions to parent                          (13,258)    (5,000)    (8,750)
 Due to (from) affiliates                          59,772      4,718       (399)
                                           ------------------------------------
Net cash flows from financing activities           24,854    217,516    (22,556)
                                           ------------------------------------
Net change in cash                                   (454)       454      4,215
Cash at beginning of period                           454          -          -
                                           ------------------------------------
Cash at end of period                             $     -   $    454    $ 4,215
                                                   =======   =======    =======


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


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


1. ORGANIZATION AND OPERATIONS

 Salton Sea Guarantors (the "Guarantors") (not a legal entity) is
comprised  of  100% interests in three geothermal electric  power
generating plants (Salton Sea Units I, II and III) and  a  fourth
plant  (Salton  Sea  Unit IV or the Salton Sea  Expansion)  which
became  operational in June 1996 (collectively, the  "Salton  Sea
Projects").   Salton Sea Unit IV was created upon  combining  and
consolidating the Salton Sea Unit I power purchase agreement  and
the  Fish Lake modified SO4.  All four plants are located in  the
Imperial  Valley  of California.  The Salton  Sea  Projects  will
serve  to  guarantee  loans from Salton Sea  Funding  Corporation
("Funding  Corporation"), an indirect wholly-owned subsidiary  of
CalEnergy Company, Inc. ("CalEnergy").

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


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 December 31, 1995 successor financial statements reflect the
acquisition of Magma (see Note 3), the resulting push down to the
Guarantors  of the accounting as a purchase business  combination
and  minority  interest for the non-owned periods  consisting  of
100%  for  the  period January 1-9, 1995 and 49% for  the  period
January 10, 1995-February 23, 1995.

Revenue Recognition

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

 The Salton Sea I project sells electricity to Edison pursuant to
a  30-year  negotiated power purchase agreement, as amended  (the
"Salton  Sea  I  PPA"), which provides for  capacity  and  energy
payments.   The energy payment is calculated using a  Base  Price
which  is  subject to quarterly adjustments based on a basket  of
indices.   The  time period weighted average energy  payment  for
Salton  Sea  I was 5.1 cents per kWh during 1996.  As the  Salton
Sea  I  PPA is not an SO4 Agreement, the energy payments  do  not
revert  to Edison's Avoided Cost of Energy.  The capacity payment
is approximately $1,100 per annum.

  The  Salton Sea II and Salton Sea III projects sell electricity
to  Edison  pursuant  to  30-year modified  SO4  Agreements  that
provide for capacity payments, capacity bonus payments and energy
payments.  The price for contract capacity and contract  capacity
bonus  payments  is  fixed  for the  life  of  the  modified  SO4
Agreements.   The energy payments for the first ten year  period,
which  period  expires  in  April  2000  and  February  1999  are
levelized at a time period weighted average of 10.6 cents per kWh
and  9.8  cents  per kWh for Salton Sea II and  Salton  Sea  III,
respectively.   Thereafter, the monthly energy payments  will  be
Edison's Avoided Cost of Energy.  For Salton Sea II only,  Edison
is entitled to receive, at no cost, 5% of all energy delivered in
excess  of 80% of contract capacity for the period April 1,  1994
through  March 31, 2004.  The annual capacity and bonus  payments
for Salton Sea II and Salton Sea III are approximately $3,300 and
$9,700, respectively.

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

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

Property, Plant, Contracts and Equipment

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

 Depreciable lives for the periods through 1994 were as follows:

Plant and plant equipment                20 years
Office furniture and equipment           5-10 years
Other equipment                          7-10 years
Exploration and development costs        20 years

   Power  purchase contracts were amortized on the straight  line
method over 20 years which is the lesser of the remaining life of
the  contract  or  the remaining useful life of plant  and  plant
equipment.

   As  a  result of the purchase business combination, the assets
and  liabilities were adjusted to fair value and are  depreciated
over the remaining useful lives.  See "Purchase Accounting" below
and Note 4, "Property, Plant, Contracts and Equipment."



Purchase Accounting

   As a result of the purchase business combination accounted for
on  a  push  down basis by the Guarantors during the  year  ended
December  31,  1995, all identifiable assets and liabilities  are
stated at fair value (see Note 3).

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

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

   The  Salton  Sea reservoir contains commercial  quantities  of
extractable  minerals.  The  fair  value  allocated  to   mineral
extraction  was  based on the estimated net cash flows  generated
from  producing  such minerals.  The fair value assigned  to  the
mineral  reserves  will be amortized on the units  of  production
method 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, 1996 and  1995,
accumulated  amortization of the excess of cost over  fair  value
was $2,481 and $1,177, respectively.

Income Taxes

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

Statements of Cash Flows

     For purposes of the statements of cash flows, the Guarantors
consider only demand deposits at banks to be cash.  Cash paid for
interest during the years ended December 31, 1996 , 1995 and 1994
was $23,301, $4,716 and $7,163, respectively.

Fair Values of Financial Instruments

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

Impairment of Long-Lived Assets

   On  January  1,  1996,  the  Guarantor  adopted  Statement  of
Financial  Accounting Standards No. 121 ("SFAS 121"), "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to  be  Disposed  Of" which requires that long-lived  assets  and
certain  identifiable  intangibles be  reviewed  for  impairments
whenever  events  or changes in circumstances indicate  that  the
carrying amount of an asset may not be recoverable.  The adoption
of  SFAS  121  did not have a material effect on the  Guarantors'
financial statements.

Use of Estimates

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


3.  PURCHASE OF MAGMA POWER COMPANY

   On  January 10, 1995, CalEnergy acquired approximately 51%  of
the  outstanding  shares of common stock  of  Magma  (the  "Magma
Common  Stock")  through a cash tender offer (the  "Magma  Tender
Offer") and completed the Magma acquisition on February 24,  1995
by acquiring approximately 49% of the outstanding shares of Magma
Common Stock not owned by CalEnergy through a merger.

   The  transaction  was  accounted for as  a  purchase  business
combination.    All identifiable assets acquired and  liabilities
assumed  were assigned a portion of the cost of acquiring  Magma,
equal  to their fair values at the date of the acquisition.   The
adjustments  which  have  been made to  the  net  assets  of  the
Guarantors  to  reflect the effect of the  acquisition  of  Magma
accounted for as a purchase business combination pushed  down  to
the Guarantors are as follows:

Property, plant, contracts and equipment            $ 153,660
Goodwill                                               53,271
Deferred financing cost                                 6,412
Severance, relocation and litigation reserve           (2,312)
Debt                                                 (184,364)
                                                   ------------
Net increase in assets                              $  26,667
                                                   ============

   Unaudited  pro forma combined revenue and net  income  of  the
Guarantors on a purchase, push down basis of accounting, for  the
year  ended December 31, 1995, as if the acquisition had occurred
on  January  1,  1994 after giving effect to  certain  pro  forma
adjustments related to the acquisition, were $71,605 and $18,465,
respectively.


4.  PROPERTY, PLANT, CONTRACTS AND EQUIPMENT

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


December 31,
                                       1996      1995
                                --------------------------

Plant and equipment                $329,458  $173,509
Salton Sea Unit IV construction
 in progress                              -   108,632
Power sale agreements                64,609    64,609
Mineral extraction                   66,831    60,577
Exploration and development costs    42,220    17,793
                                  -----------------------
                                    503,118   425,120
Less accumulated depreciation
  and amortization                  (18,936)   (7,833)
                                  -----------------------
                                   $484,182  $417,287
                                    =======   =======


5. SENIOR SECURED PROJECT NOTE

  The Guarantors assumed their proportionate share of the secured
bank  financing incurred in connection with the purchase of Magma
(see  Note  3).  On July 21, 1995, CalEnergy recapitalized  Magma
and  the related Merger Facilities from proceeds received through
a  $200,000  high yield offering and a $475,000 investment  grade
offering  of  the Salton Sea Funding Corporation.  Proceeds  from
the  offering of Salton Sea Funding Corporation investment  grade
securities  were  used to repay certain loans of the  Guarantors.
The  Guarantors issued a project note in the amount  of  $325,000
payable  to  Salton Sea Funding Corporation with  interest  rates
ranging from 6.69% to 7.84%, and guaranteed the investment  grade
securities.  The guarantee issued is collateralized by a lien  on
substantially  all  the  assets of and a  pledge  of  the  equity
interests in the Guarantors.


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

               1997            $  33,632
               1998               39,450
               1999               16,076
               2000                9,737
               2001               16,944
               Thereafter        184,001
                            ------------
                                $299,840
                                 =======
   The  carrying amounts and estimated fair values of the  senior
secured  projects  notes  at December  31,  1996  and  1995  were
$299,840 and $295,849 and $321,500 and $326,337, respectively.

6.  RELATED PARTY TRANSACTIONS

  The Guarantors have entered into the following agreements:

  Easement  Grant  Deed and Agreement Regarding  Rights  for
  Geothermal  Development  dated  April  1,  1993,  whereby   the
  Guarantors acquired from Magma Land I, a wholly-owned subsidiary
  of Magma, rights to extract geothermal brine from the geothermal
  lease  rights property which is necessary to operate the Salton
  Sea  Power Generation, L.P. facilities in return for 5% of  all
  electricity  revenues received by the Guarantors.   The  amount
  expensed for the years ended December 31, 1996, 1995 and 1994 was
  $4,215, $3,579 and $3,732, respectively.
 
  Administrative Services Agreement dated April 1, 1993 with
  Magma,  whereby  Magma  will provide to the  Guarantors  adminis
  trative and management services. Fees payable to Magma amount to
  3%  of  total     electricity revenues  per  month.  The  amount
  expensed for the years ended December 31, 1996, 1995 and 1994 was
  $2,202, $2,153 and $2,239, respectively.

  Operating  and Maintenance Agreement dated April  1,  1993
  with  CalEnergy  Operating  Company  ("CEOC")  (formerly  Magma
  Operating Co.), 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 1996, 1995 and 1994, the Guarantors reimbursed CEOC  for
  expenses of $9,854, $6,939 and $5,973, respectively.

                 INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

  We have audited the accompanying combined balance sheets of the
Partnership Guarantors as of December 31, 1996 and 1995, and  the
related  combined successor statements of operations, Guarantors'
equity  and cash flows for the years then ended.  These financial
statements  are the responsibility of the Guarantors' management.
Our  responsibility is to express an opinion on  these  financial
statements based on our audits.

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

   In  our  opinion,  such combined financial statements  present
fairly, in all material respects, the financial position  of  the
Partnership Guarantors as of December 31, 1996 and 1995  and  the
results  of its operations and its cash flows for the years  then
ended   in   conformity   with  generally   accepted   accounting
principles.




DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 31, 1997


               REPORT OF INDEPENDENT ACCOUNTANTS


Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

   We  have audited the accompanying Partnership Guarantors  (the
"Guarantors")  combined  predecessor  statements  of  operations,
Guarantors' equity and cash flows for the year ended December 31,
1994.  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
audit.

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

   In  our opinion, the combined predecessor financial statements
referred  to above present fairly, in all material respects,  the
historical combined results of operations and cash flows  of  the
Partnership Guarantors for the year ended December 31,  1994,  in
conformity with generally accepted accounting principles.






COOPERS & LYBRAND L.L.P.

San Diego, California
June 19, 1995,


                    PARTNERSHIP GUARANTORS
                    COMBINED BALANCE SHEETS
                     (Dollars in Thousands)


                                            December 31,
                                          1996       1995
ASSETS
Cash                                      $      -  $ 11,146
Restricted cash                                  -     9,859
Accounts receivable                         22,766    11,841
Prepaid expenses and other assets           19,083     9,651
Due from affiliates                        129,278    54,949
Property, plant, contracts and equipment,
 net                                       364,849   298,956
Management fee                              67,521    63,520
Excess of fair value over net assets
 acquired, net                             138,686   142,250
                                       ----------------------
                                          $742,183  $602,172
                                           =======   =======
LIABILITIES AND GUARANTORS' EQUITY
Liabilities:
Accounts payable                        $      663 $   3,566
Accrued liabilities                         22,977    19,995
Loans payable                                    -    43,766
Senior secured project note                182,204    62,706
Deferred income taxes                      108,277    98,407
                                       ----------------------
Total liabilities                          314,121   228,440
Commitments and contingencies (Notes 2, 6 and 7)

Guarantors' equity:
Common stock                                     3         3
Additional paid-in capital                 387,663   359,092
Retained earnings                           40,396    14,637
                                       ----------------------
Total Guarantors' equity                   428,062   373,732
                                       ----------------------
                                          $742,183  $602,172
                                           =======   =======


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

                    PARTNERSHIP GUARANTORS
               COMBINED STATEMENTS OF OPERATIONS
                    (Dollars in Thousands)


                                                     Year Ended December 31,
                                                     1996      1995     1994
                                                       Successor     Predecessor
Revenues:
Sales of electricity                              $132,212  $76,909  $70,692
Interest and other income                            8,014   10,574    5,358
                                               --------------------------------
Total revenues                                     140,226   87,483   76,050

Costs and expenses:
Operating, general and administrative costs         58,945   32,143   35,306
Depreciation and amortization                       33,974   18,958    9,037
Interest expense                                    13,697   16,726    3,285
Less capitalized interest                           (8,849)  (7,900)     ---
                                               --------------------------------
Total expenses                                      97,767   59,927   47,628
                                               --------------------------------
Income before income taxes                          42,459   27,556   28,422
Provision for income taxes                          16,700   11,492   11,284
                                               --------------------------------
Income before minority interest                     25,759   16,064   17,138
Minority interest                                        -    1,427        -
                                               --------------------------------
Net income                                          25,759   14,637   17,138

Pro forma adjustment to reflect fee
  payable from affiliates, net of income taxes        N/A     N/A      1,956
                                               -------------------------------
Pro forma net income                                  N/A     N/A    $19,094
                                                   =======  ======   =======

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


                    PARTNERSHIP GUARANTORS
           COMBINED STATEMENTS OF GUARANTORS' EQUITY
           FOR THE THREE YEARS ENDED DECEMBER 31, 1996
                    (Dollars in Thousands)

                                                   Additional
                                 Common Stock     Paid-in    Retained  Total
                               Shares    Amount   Capital    Earnings  Equity
                  --------------------------------------------------------
Predecessor:
Balance, January 1, 1994          3     $   3   $103,384     $    -   $ 103,387
Cash distributions to Magma       -         -     (1,062)   (17,138)    (18,200)
Other distributions               -         -     (3,315)         -      (3,315)
Contribution for income taxes     -         -      7,385          -       7,385
Net income                        -         -          -     17,138      17,138
                    ----------------------------------------------------
Balance, December 31, 1994        3         3    106,392          -     106,395
Net income in 1995 prior to
 acquisition                      -         -          -      1,427       1,427

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

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


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


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

                                                     Year Ended December31,
                                                   1996        1995     1994
                                                     (Successor)   (Predecessor)
Cash flows from operating activities:
 Net income                                      $ 25,759  $ 14,637  $ 17,138
 Adjustments to reconcile net income to net
 cash provided by operating activities:
 Minority interest                                      -     1,427         -
 Depreciation and amortization                     33,974    18,958     9,037
 Deferred taxes                                       321     1,011     3,899
 Changes in assets and liabilities:
  Accounts receivable                               3,552       (993)  (3,103)
  Prepaid expenses and other assets                  (615)    (5,779)     178
  Accounts payable and accrued liabilities          3,278     12,047    2,421
  Other, net                                            -          -    8,251
                                               --------------------------------
Net cash flows from operating activities           66,269     41,308   37,821
                                               --------------------------------
Cash flows from investing activities:
Capital expenditures                              (18,483)    (4,066) (10,495)
Purchase of Guarantors by CalEnergy,
 net of cash acquired                                   -   (197,810)       -
Net (increase) decrease in marketable securities        -      7,457   (4,826)
Decrease (increase) in restricted cash             23,085     (1,206)  (3,058)
Management fee                                     (4,736)   (30,485)       -
                                               --------------------------------
Net cash flow from investing activities              (134)  (226,110) (18,379)
                                               --------------------------------
Cash flows from financing activities:
Loan repayments                                  (107,560)  (225,479)  (7,779)
Loan proceeds                                     135,000    288,185        -
Contributions from parent                               -    197,943        -
Distributions to parent                           (42,429)   (13,860) (18,200)
Decrease (increase) in amounts due from
 affiliates                                       (62,292)   (50,841)   4,077
                                               --------------------------------
Net cash flows from financing activities          (77,281)   195,948  (21,902)
                                               --------------------------------
Net increase (decrease) in cash                   (11,146)    11,146   (2,460)
Cash at beginning of period                        11,146          -    8,121
                                               --------------------------------
Cash at the end of period                         $     -   $ 11,146  $ 5,661
                                                  =======     ======   ======

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

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


                    PARTNERSHIP GUARANTORS
            NOTES TO COMBINED FINANCIAL STATEMENTS
                     (Dollars in Thousands)


1. ORGANIZATION AND OPERATIONS

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

     The December 31, 1995 successor financial statements reflect
the acquisition of Magma (see Note 3), the resulting push down to
the   Guarantors  of  the  accounting  as  a  purchase   business
combination  and  minority  interest for  the  non-owned  periods
consisting of 100% for the period January 1-9, 1995 and  49%  for
the period January 10, 1995--February 23, 1995.

Revenue Recognition

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

  The Partnership Projects sell all electricity generated by  the
respective  plants  pursuant  to four  long-term  power  purchase
agreements  ("SO4 Agreements") between the projects  and  Edison.
These  SO4  Agreements  provide for capacity  payments,  capacity
bonus  payments and energy payments.  Edison makes  fixed  annual
capacity  payments  to  the projects,  and  to  the  extent  that
capacity  factors exceed certain benchmarks is required  to  make
capacity  bonus  payments.  The price for capacity  and  capacity
bonus  payments  is  fixed for the life of  the  SO4  Agreements.
Energy is sold at increasing fixed rates for the first ten  years
of  each  contract  and thereafter at Edison's  Avoided  Cost  of
Energy.

  The scheduled energy price periods of the Partnership Projects'
SO4  Agreements  extended  until February  1996  for  the  Vulcan
Partnership  and extend until December 1998, December  1998,  and
December  1999  for  each of the Del Ranch, Elmore  and  Leathers
Partnerships, respectively.  Excluding Vulcan, which is receiving
Edison's  Avoided Cost of Energy, the Partnership  Projects'  SO4
Agreements provide for energy rates ranging from 12.6  cents  per
kWh  in 1996 to 15.6 cents per kWh in 1999.  The weighted average
energy  rate for all of the Partnership Projects' SO4  Agreements
was 9.7 cents per kWh in 1996.

      The Guarantors earn energy payments based on kilowatt hours
("kWhs") of energy provided to Edison. During the first 10 years,
the Guarantors earn payments for energy as scheduled in their SO4
Agreements.   After  the  10-year scheduled  payment  period  has
expired  (in 1996 for Vulcan, 1998 for Del Ranch and  Elmore  and
1999  for  Leathers), the energy payment per kWh  throughout  the
remainder of the contract period will be at Edison's Avoided Cost
of  Energy.   For  the  year ended December  31,  1996,  Edison's
average  Avoided Cost of Energy was 2.5 cents per  kWh  which  is
substantially  below the contract energy prices earned  in  1996.
Estimates  of  Edison's  future  Avoided  Cost  of  Energy   vary
substantially  from year to year.  The Guarantors cannot  predict
the  likely level of Avoided Cost of Energy prices under the  SO4
Agreements  at  the expiration of the scheduled payment  periods.
The  revenues  generated by each of the projects operating  under
SO4  Agreements could decline significantly after the  expiration
of the relevant scheduled payment periods.

Property, Plant, Contracts and Equipment

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

     Depreciable lives for the periods through 1994 were as
follows:
Plant and plant equipment               20 years
Office furniture and equipment          5-10 years
Other equipment                         7-10 years
Exploration and development costs       20 years

     Power purchase contracts were amortized on the straight line
method over 20 years which is the lesser of the remaining life of
the  contract  or  the remaining useful life of plant  and  plant
equipment.

      As  a  result  of  the purchase of Magma,  the  assets  and
liabilities were adjusted to fair value and are depreciated  over
the  remaining useful lives.  See "Purchase Accounting" below and
Note 4, "Property, Plant, Contracts and  Equipment".

Purchase Accounting

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

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

   The  Salton  Sea reservoir contains commercial  quantities  of
extractable  minerals.   The  fair  value  allocated  to  mineral
extraction  was  based on the estimated net cash flows  generated
from  such  production.  The fair value assigned to  the  mineral
reserves  will be amortized using the units of production  method
upon commencement of commercial production.

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

Excess of Cost over Fair Value

   Total  acquisition costs in excess of the fair values assigned
to  the  net assets acquired are amortized over a 40 year  period
using  the straight line method.   At December 31, 1996 and  1995
accumulated amortization of the excess of cost over fair value of
net assets acquired was $6,801 and $3,237, respectively.

Income Taxes

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

Management Fee

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

Statements of Cash Flows

   For  purposes  of the statement of cash flows, the  Guarantors
consider only demand deposits at banks to be cash.  Cash paid for
interest  during  1996,  1995 and 1994 was  $10,314,  $3,235  and
$2,949, respectively.

Fair Values of Financial Instruments

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

Pro Forma Adjustments (Unaudited)

   The accompanying combined predecessor statements of operations
contain  a  proforma adjustment to reflect a  fee  for  data  and
services management to CEOC from Magma under an agreement entered
into  in June 1995, equal to distributions to Magma from its  10%
interest  in  Leathers, Del Ranch and Elmore and  4.5%  of  total
energy sales from the Leathers Project as if such agreement  were
in effect during all periods presented. (See Note 7).

Impairment of Long-Lived Assets

   On January 1, 1996, the Company adopted Statement of Financial
Accounting  Standards No. 121 ("SFAS 121"), "Accounting  for  the
Impairment of Long-Lived Assets and for Long-Lived Assets  to  be
Disposed  Of" which requires that long-lived assets  and  certain
identifiable  intangibles  be reviewed  for  impairment  whenever
events  or  changes in circumstances indicate that  the  carrying
amount of an asset may not be recoverable.  The adoption of  SFAS
121  did  not have a material effect on the Guarantors' financial
statements.

Use of Estimates

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


3.    ACQUISITIONS

 Magma Power Company

   On  January 10, 1995, CalEnergy acquired approximately 51%  of
the  outstanding  shares of common stock  of  Magma  (the  "Magma
Common  Stock")  through a cash tender offer (the  "Magma  Tender
Offer") and completed the Magma acquisition on February 24,  1995
by acquiring approximately 49% of the outstanding shares of Magma
Common Stock not owned by CalEnergy through a merger.

   The  transaction  was  accounted for as  a  purchase  business
combination.   All identifiable assets acquired  and  liabilities
assumed  were assigned a portion of the cost of acquiring  Magma,
equal  to  their  fair  values at the date of  acquisition.   The
adjustments  which  have  been made to  the  net  assets  of  the
Guarantors  to  reflect the effect of the  acquisition  of  Magma
accounted for as a purchase business combination pushed  down  to
the Guarantors are as follows:

Property, plant, contracts and equipment            $ 214,513
Goodwill                                              145,487
Deferred financing cost                                 9,714
Other assets                                           (2,137)
Severance, relocation and litigation reserve           (3,313)
Deferred income taxes                                 (83,889)
Debt                                                 (213,185)
                                                  ------------
Net increase in assets                              $  67,190
                                                  ============

Edison Mission Energy's Partnership Interest

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

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

   The adjustments which have been made to the net assets of  the
Guarantors  to  reflect  the effect of the  Partnership  Interest
Acquisition accounted for as a purchase business combination  are
as follows:

Cash                               $  12,956
Restricted cash                       13,226
Power sales agreements                78,036
Other assets                          20,254
Project loans                        (48,161)
Liabilities                           (5,311)
                                   $  71,000

   Unaudited  pro forma combined revenue and net  income  of  the
Guarantors on a purchase, push down basis of accounting, for  the
year ended December 31, 1996, as if the acquisitions had occurred
on  January  1,  1994 after giving effect to  certain  pro  forma
adjustments  related  to  the  acquisition,  were  $158,912   and
$26,852,   respectively,  compared  to  $179,103   and   $28,869,
respectively, for the year ended December 31, 1995.


4. PROPERTY, PLANT, CONTRACTS AND EQUIPMENT

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

                                             December 31,
                                     1996       1995

Plant and equipment               $  60,272   $  58,532
Power sale agreements               123,588      44,966
Process license                      46,290      46,290
Mineral reserves                    121,199     112,350
Exploration and development costs    59,303      53,449
                                  ----------- -----------
                                    410,652     315,587
Less accumulated depreciation
  and amortization                  (45,803)    (16,631)
                                  ----------- -----------
                                   $364,849    $298,956
                                    =======     =======

5. LOANS PAYABLE

  Loans payable at December 31, 1995 included the Guarantors' pro
rata  share  of  the debt of the Del Ranch, Elmore  and  Leathers
partnerships which were repaid in 1996.


6. SENIOR SECURED PROJECT NOTES

      The  Guarantors assumed their proportionate  share  of  the
secured  bank financing incurred in connection with the  purchase
of Magma (see Note 3).  On July 21, 1995, CalEnergy recapitalized
Magma  and  the related Merger Facilities from proceeds  received
through  a $200,000 high yield offering and a $475,000 investment
grade offering of Salton Sea Funding Corporation.  The Guarantors
issued  a project note in the amount of $75,000 payable to Salton
Sea  Funding  Corporation  at  an interest  rate  of  6.69%,  and
guaranteed, to the extent of available cash flow, the  investment
grade  securities.  The guarantee is collateralized by a lien  on
the  available  cash  flow  of and  a  pledge  of  stock  in  the
Guarantors.  On June 20, 1996, the Salton Sea Funding Corporation
issued an additional investment grade offering for $135,000.   In
connection   with  this  offering,  the  Guarantors   issued   an
additional  project note in the amount of $135,000 with  interest
rates ranging between 7.02% and 8.30%.

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


               1997             $38,594
               1998              51,762
               1999              32,364
               2000              10,562
               2001               1,000
               Thereafter        47,922
                            -----------
                               $182,204
                                =======

     The carrying amounts and estimated fair values of the Senior
Secured Project Notes at December 31, 1996 and 1995 were $182,204
and $179,779 and $62,706 and $64,348, respectively.


7. 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
$370  and  $425,  respectively, for the year ended  December  31,
1996,   $745 and $620, respectively, for the year ended  December
31,  1995,  and $516 and $438, respectively, for the  year  ended
December 31, 1994.

In  addition,  the  Guarantors entered into  the  following agreements:

      Easement  Grant  Deed and Agreement Regarding  Rights  for
  Geothermal  Development, whereby the Guarantors  acquired  from
  Magma  rights  to extract geothermal brine from the  geothermal
  lease rights property which is necessary to operate the Leathers,
  Del Ranch and Elmore Plants in return for 17.333%, on a pro rata
  basis,  of  all  energy revenues received by each  plant.   The
  Guarantors' share of amounts expensed under this agreement  for
  1996,   1995   and  1994  were  $16,980,  $8,115  and   $7,488,
  respectively.

     Ground Leases dated March 15 and August 15, 1988 with Magma
  whereby the Guarantors lease from Magma for 32 years the surface
  of  the  land  as  described in the Imperial County  Assessor's
  official records.  Amounts expensed under the ground leases were
  $60 in 1996 and $30 in each of 1995 and 1994.

       Administrative  Services  Agreements  whereby  CEOC  will
  provide  to  the  Partnerships  administrative  and  management
  services for a period of 32 years through 2020.  Fees payable to
  CEOC amount to the greater of 3% of total electricity revenues or
  $60 per month.  The minimum monthly payments for years subsequent
  to  1989 are increased based on the consumer price index of the
  Bureau  of  Labor and Statistics.  Amounts expensed related  to
  these  agreements for 1996, 1995 and 1994 amounted  to  $3,545,
  $1,687,  and $1,573, respectively.


     Operating and Maintenance Agreements whereby the Guarantors
  retain  CEOC  to operate the plants for a period  of  32  years
  through  2020.   Payment  is  made  to  CEOC  in  the  form  of
  reimbursements  of expenses incurred and a guaranteed  capacity
  payment ranging from 10% to 25% of energy revenues over  stated
  amounts.  The Guarantors in 1996, 1995 and 1994 reimbursed CEOC
  for  expenses of $8,547, $4,471, and $2,391, respectively,  and
  accrued  a  guaranteed capacity payment of $3,888,  $1,731  and
  $1,548 at December 31, 1996, 1995 and 1994, respectively.
8. CONDENSED FINANCIAL INFORMATION

  Condensed balance sheet information of the Guarantors' pro rata interest in
the respective entities as of December 31, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>
                              Vulcan                                       Vulcan    Adjustments/    Combined
                              Power    CEOC   Elmore  Del Ranch  Leathers    BNG     Eliminations     Total
                 ----------------------------------------------------------------------------------
<S>                         <C>       <C>     <C>      <C>       <C>     <C>       <C>                <C>
December 31, 1996
Assets:
Accounts receivable and
  other                     $     -   $11,773 $ 9,479  $ 9,198   $10,130 $ 3,214   $(1,945)           $ 41,849
Due from affiliates               -    17,219   2,678    2,707         -  14,579    92,095             129,278
Property, plant, contracts and
  equipment, net                230     6,940  58,540   53,635    70,850  53,310   121,344             364,849
Management fee and
     goodwill, net                -         -       -        -         -       -   206,207             206,207
Investments in
  partnerships               70,571   195,061       -        -         -       -  (265,632)                  -
                  ---------------------------------------------------------------------------------
                            $70,801  $230,993 $70,697  $65,540  $80,980  $71,103  $152,069            $742,183
                             ======   =======  ======   ======    ======  ======   =======             =======

Liabilities and equity:
Accounts payable and
  accrued liabilities       $    65     6,296$    815$   1,678$   1,282$     532  $121,249            $131,917
Due to affiliate                  -         -       -        -    18,382       -   (18,382)                  -
Senior secured project note       -         -        -         -       -       -   182,204             182,204
                 ----------------------------------------------------------------------------------
Total liabilities                65     6,296     815    1,678    19,664     532   285,071             314,121
Guarantors' equity           70,736   224,697  69,882   63,862    61,316  70,571  (133,002)            428,062
                  --------------------------------------------------------------------------------
                            $70,801  $230,993 $70,697  $65,540  $80,980  $71,103  $152,069            $742,183
                             ======   =======  ======  =======    ======  ======    ======             =======
</TABLE>

8. CONDENSED FINANCIAL INFORMATION  (Continued)
<TABLE>
<CAPTION>
                             Vulcan                                        Vulcan  Adjustments/ Combined
                             Power     CEOC    Elmore  Del Ranch  Leathers  BNG    Eliminations  Total
                 -----------------------------------------------------------------------------------------
<S>                        <C>        <C>      <C>     <C>      <C>         <C>      <C>      <C>
December 31, 1995
Assets:
Cash and investments       $    -     $    -   $ 7,060 $  6,896 $   6,772   $  277   $     -  $ 21,005
Accounts receivable
  and other                     -        792     4,899    4,951     5,631    6,826    (1,607)   21,492
Due from affiliates          (232)    71,976      (988)    (763)   (1,066)     116   (14,094)   54,949
Property, plant, contracts
  and equipment, net          265      1,294    27,744   25,508    32,466   29,224   182,455   298,956
Management fee                  -          -         -        -         -        -    63,520    63,520
Goodwill, net                   -          -         -        -         -        -   142,250   142,250
Investments in
  partnerships             36,074     73,455         -        -         -        -  (109,529)        -
                 -------------------------------------------------------------------------------
                          $36,107   $147,517   $38,715  $36,592   $43,803  $36,443  $262,995  $602,172
                           ======    =======    ======   ======    ======  ======    =======  =======
Liabilities and Equity:
Accounts payable and
  accrued liabilities     $  369   $  8,557    $   443  $   794   $   652  $   369  $110,784  $121,968
Loans payable                  -          -     11,450   10,930    21,386        -         -    43,766
Senior secured project note    -          -          -        -         -        -    62,706    62,706
                 -------------------------------------------------------------------------------
Total liabilities            369      8,557     11,893   11,724    22,038      369   173,490   228,440
Guarantors' equity        35,738    138,960     26,822   24,868    21,765   36,074    89,505   373,732
                 -------------------------------------------------------------------------------
                         $36,107   $147,517    $38,715  $36,592   $43,803  $36,443  $262,995  $602,172
                          ======    =======     ======    =====    ======   ======   =======   =======
</TABLE>

8. 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, 1996, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
                        Vulcan                                       Vulcan   Adjustments/ Combined
                         Power    CEOC   Elmore  Del Ranch  Leathers    BNG   Eliminations   Total
                   ---------------------------------------------------------------------------------
<S>                    <C>     <C>     <C>      <C>       <C>        <C>      <C>        <C>
SUCCESSOR:
December 31, 1996
Revenues               $ 3,157 $49,399 $39,627  $40,235   $39,126    $14,271  $(45,589)  $140,226
Expenses                   431       -  25,762   25,382    27,055     12,102    23,735    114,467
                -----------------------------------------------------------------------------------
Net income             $ 2,726 $49,399 $13,865  $14,853   $12,071$     2,169  $(69,324)   $25,759
                        ======  ======  ======   ======    ======     ======    =======    ======
December 31, 1995
Revenues               $15,634 $24,121 $19,336  $18,941   $19,101    $20,878  $(30,528)   $87,483
Expenses                 1,547       -  12,866   12,523    14,161      7,974    23,775     72,846
                ---------------------------------------------------------------------------------
Net income             $14,087 $24,121$  6,470 $  6,418  $  4,940    $12,904  $(54,303)   $14,637
                        ======  ======  ======   ======    ======     ======    =======    =====
PREDECESSOR:
December 31, 1994
Revenues               $10,423 $19,290 $17,611  $18,116   $17,538    $18,430   $(25,358)  $76,050
Expenses                 4,901   7,674  12,973   12,908    14,241     10,395     (4,180)   58,912
                ---------------------------------------------------------------------------------
Net income             $ 5,522 $11,616  $4,638 $  5,208  $  3,297    $ 8,035   $(21,178)  $17,138
                        ======  ======  ======   ======    ======     ======    =======    =====
</TABLE>

9. INCOME TAXES

The provision for income taxes for the years ended December 31,
1996, 1995 and 1994 consisted of the following:

                          Current   Deferred   Total
                        --------- --------------------
Successor:
1996
--------------------
Federal                   $10,945    $ 1,976   $12,921
State                       5,434    (1,655)    3,779
                        ---------  -------------------
Total                     $16,379    $   321   $16,700
                           ======     ======    ======
1995
--------------------
Federal                   $ 6,697   $ 2,264   $ 8,961
State                       3,784    (1,253)    2,531
                        ---------  -------------------
Total                     $10,481   $ 1,011   $11,492
                            =====      =====    ======
Predecessor:
1994
--------------------
Federal                   $ 6,277    $ 3,314  $ 9,591
State                       1,108        585    1,693
                        ---------  -------------------
Total                     $ 7,385    $ 3,899   $11,284
                            =====      =====    ======


Deferred tax liabilities and assets at December 31, 1996 and 1995
consisted of the following:
        
                                         1996            1995
                                      ------------     -----------
Deferred liabilities:
Depreciation and  amortization         $108,277         $106,238
Deferred assets:
Tax credits                                 ---            7,831
                                      ------------      -----------
Net deferred tax liability             $108,277         $ 98,407
                                        =======           ======


The effective tax rate differs from the federal statutory tax
rate due primarily to percentage depletion in excess of cost
depletion, goodwill amortization and the realization for income
tax purposes of certain tax credits.


                 INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

        We    have   audited   the   accompanying   balance   sheets   of    the
Salton   Sea   Royalty  Company  as  of  December  31,   1996   and   1995   and
the   related   statements   of   operations,  equity   and   cash   flows   for
the    years    then    ended.     These   financial    statements    are    the
responsibility    of    the    Company's   management.     Our    responsibility
is   to   express   an   opinion  on  those  financial   statements   based   on
our audits.

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

       In   our   opinion,   such  financial  statements  present   fairly,   in
all   material   respects,   the   financial  position   of   the   Salton   Sea
Royalty   Company   as  of  December  31,  1996  and  1995   and   the   results
of   its   operations  and  its  cash  flows  for  the  years  then   ended   in
conformity with generally accepted accounting principles.



DELOITTE & TOUCHE LLP
Omaha, Nebraska
January 31, 1997


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


December 31,
                                    1996      1995

ASSETS
Due from affiliates                 $ 10,008  $ 25,110
Royalty stream, net                   44,372    53,744
Excess of cost over fair value
 of net assets acquired, net          35,004    35,912
Prepaid expenses and other assets      1,689     2,575
                                 ----------------------
                                    $ 91,073  $117,341
                                     =======   =======

LIABILITIES AND EQUITY
Liabilities:
Accrued liabilities                  $12,070  $  5,948
Senior secured project note           56,936    67,882
Deferred income taxes                 12,227    15,460
                                 ----------------------
  Total liabilities                   81,233    89,290

Commitments and contingencies (Notes 2 and 4)

Equity:
Common stock, par value $.01 per share; 100 shares
  authorized, issued and outstanding       -         -
Additional paid-in capital             1,561    24,541
Retained earnings                      8,279     3,510
                                 ----------------------
  Total equity                         9,840    28,051
                                 ----------------------
                                     $91,073  $117,341
                                     =======   =======


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


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



Year ended December 31,
                                      1996      1995

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

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


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


                  SALTON SEA ROYALTY COMPANY
                     STATEMENTS OF EQUITY
        FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
                    (Dollars in Thousands)




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

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

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

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


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

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


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


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


1. ORGANIZATION

    Salton   Sea   Royalty   Company   (the   "   Royalty   Company")    is    a
single-purpose   entity,   99%   owned  by   Magma   Power   Company   ("Magma")
and    1%    owned   by   Salton   Sea   Funding   Corporation   (the   "Funding
Corporation").     Effective    February    24,    1995,    Magma    became    a
wholly-owned    subsidiary    of   CalEnergy   Company,    Inc.    ("CalEnergy")
(see Note 3).

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

    All    of    the   Projects   have   executed   long-term   power   purchase
agreements    ("SO4   Agreements")   providing   for   capacity    and    energy
sales   to   Southern   California   Edison   Company   ("Edison").    Each   of
these   agreements   provides   for   fixed   price   capacity   payments    for
the life of the contract.

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

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


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

     The    December    31,    1995    financial    statements    reflect    the
acquisition   of  Magma  (see  Note  3),  the  resulting  push   down   to   the
Royalty    Company    of    the    accounting    as    a    purchase    business
combination    and    minority    interest    for    the    non-owned    periods
consisting   of   100%  for  the  period  January  1-9,   1995   and   49%   for
the period January 10, 1995--February 23, 1995.

Purchase Accounting

   As   a   result   of   the  purchase  business  combination   accounted   for
on   a   push  down  basis  by  the  Royalty  Company  during  the  year   ended
December    31,   1995,   all   identifiable   assets   and   liabilities    are
stated at fair value (see Note 3).

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

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

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,    1996    and    1995,
accumulated   amortization   of   the   excess   of   cost   over   fair   value
was $1,737 and $829, respectively.

Income Taxes

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

Fair Values of Financial Instruments

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

Impairment of Long-Lived Assets

    On   January   1,   1996,   the  Royalty  Company   adopted   Statement   of
Financial    Accounting   Standards   No.   121   ("SFAS   121"),    "Accounting
for   the   Impairment   of   Long-Lived  Assets  and  for   Long-Lived   Assets
to    be   Disposed   Of"   which   requires   that   long-lived   assets    and
certain     identifiable    intangibles    be    reviewed     for     impairment
whenever    events   or   changes   in   circumstances   indicate    that    the
carrying   amount   of   an  asset  may  not  be  recoverable.    The   adoption
of    SFAS   121   did   not   have   a   material   effect   on   the   Royalty
Company's financial statements.

Use of Estimates

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




3. PURCHASE OF MAGMA POWER COMPANY

   On   January  10,  1995,  CalEnergy  acquired  approximately   51%   of   the
outstanding   shares   of   common   stock   of   Magma   (the   "Magma   Common
Stock")   through   a   cash   tender   offer   (the   "Magma   Tender   Offer")
and    completed   the   Magma   acquisition   on   February   24,    1995    by
acquiring   approximately   49%   of   the   outstanding   shares    of    Magma
Common Stock not owned by CalEnergy through a merger.

    The    transaction    was   accounted   for   as   a    purchase    business
combination.     All    identifiable    assets    acquired    and    liabilities
assumed   were   assigned   a   portion  of  the  cost   of   acquiring   Magma,
equal   to   their   fair   values  at  the  date  of  the   acquisition.    The
adjustments   which  have  been  made  to  the  net  assets   of   the   Royalty
Company    to    reflect    the   effect   of   the   acquisition    of    Magma
accounted   for   as   a   purchase  business   combination   pushed   down   to
the Royalty Company are as follows:

Royalty stream                $64,155
Goodwill                       36,740
Deferred financing costs        1,843
Deferred income taxes         (25,341)
Debt                          (40,446)
                             ----------
Net increase in assets        $36,951
                               ======

    Unaudited   pro   forma   combined   revenue   and   net   income   of   the
Royalty   Company   on   a  purchase,  push  down  basis  of   accounting,   for
the    year   ended   December   31,   1995,   as   if   the   acquisition   had
occurred   on   January   1,   1994  after  giving   effect   to   certain   pro
forma    adjustments   related   to   the   acquisition,   were   $28,383    and
$3,753, respectively.


4. SENIOR SECURED PROJECT NOTE

     The   Royalty   Company   assumed   its   proportionate   share   of    the
secured    bank   financing   incurred   in   connection   with   the   purchase
of   Magma   (see   Note   3).   On  July  21,  1995,  CalEnergy   recapitalized
Magma    and   the   related   Merger   Facilities   from   proceeds    received
through   a   $200,000   high   yield  offering  and   a   $475,000   investment
grade    offering    of    the    Salton   Sea   Funding    Corporation.     The
Royalty   Company   issued   a   project  note  in   the   amount   of   $75,000
payable    to    Salton    Sea   Funding   Corporation   at    interest    rates
ranging   from   6.69%   to   7.37%,   and   guaranteed   to   the   extent   of
available    cash    flow,    the    investment    grade    securities.      The
guarantee   issued   is   collateralized  by  a  lien   on   substantially   all
the assets of and a pledge of stock in the Guarantor.

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

          1997             $18,001
          1998              15,726
          1999               9,396
          2000               4,773
          2001               4,434
          Thereafter         4,606
                        ----------
                           $56,936
                            ======

  The carrying amounts and estimated fair values of the senior
secured project note at December 31, 1996 and 1995 were $56,936
and $56,178 and $67,882 and $68,944, respectively.
5.        Income Taxes

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

                          Current    Deferred   Total
                        --------- ----------- --------
  1996
Federal                    $4,517    $(2,390)   $2,127
State                       1,276       (843)      433
                        --------- ----------- --------
Total                      $5,793    $(3,233)   $2,560
                            =====      ======    =====

    1995
Federal                    $4,323    $(3,644)     $679
State                       1,221       (937)      284
                        --------- ----------- --------
Total                      $5,544    $(4,581)     $963
                            =====      ======    =====

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

  Deferred tax liabilities and assets at December 31, 1996 and
1995, consisted of the following:

                                              1996        1995
Deferred liabilities:
Depreciation and amortization                $17,527     $20,760
Deferred assets:
Jr. SO4 royalty receivable                     5,300       5,300
                                          -----------  ----------
Net deferred tax liability                   $12,227     $15,460
                                              ======      ======

               REPORT OF INDEPENDENT ACCOUNTANTS


Board of Directors and Shareholder
Magma Power Company
Omaha, Nebraska

     We    have    audited    the    accompanying   Predecessor    Summary    of
Revenues    and    Related    Expenses   (the    "Predecessor    Summary")    of
Salton   Sea   Royalty   Company   (the   "Company")   for   the   year    ended
December   31,   1994.    The   Predecessor  Summary   is   the   responsibility
of   the   Company's   management.   Our  responsibility  is   to   express   an
opinion on the Predecessor Summary based on our audit.

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

    The   accompanying   Predecessor  Summary   was   prepared   for   inclusion
in   the   Prospectus   of  Salton  Sea  Funding  Corporation   on   the   basis
of   presentation  as  described  in  Note  2,  and  is  not  intended   to   be
a    complete    presentation    of   the   Company's    assets,    liabilities,
revenues and expenses.

     In    our   opinion,   the   Predecessor   Summary   referred   to    above
presents   fairly,    in    all   material   respects,    the    revenues    and
related   expenses   described  in  Notes  1  and   2   of   the   Company   for
the   year   ended   December   31,   1994,   in   conformity   with   generally
accepted accounting principles.


COOPERS & LYBRAND L.L.P.

San Diego, California
June 19, 1995,


                  SALTON SEA ROYALTY COMPANY
     PREDECESSOR SUMMARY OF REVENUES AND RELATED EXPENSES
                    (Dollars in Thousands)




                                        Year Ended
                                       December 31,
                                           1994
                                       ---------

Royalty income                           $29,410
Operating expenses                        20,753
                                       ---------
Excess of revenues over expenses         $ 8,657
                                          ======


The accompanying notes are an integral part of the summary.


                   SALTON SEA ROYALTY COMPANY
 NOTES TO PREDECESSOR SUMMARY OF REVENUES AND RELATED EXPENSES
                     (Dollars in Thousands)

1. ORGANIZATION

     Salton    Sea    Royalty   Company   (the   "Royalty   Company")    is    a
single-purpose   entity,   99%   owned  by   Magma   Power   Company   ("Magma")
and    1%    owned   by   Salton   Sea   Funding   Corporation   (the   "Funding
Corporation").     Effective    February    24,    1995,    Magma    became    a
wholly-owned    subsidiary    of   CalEnergy   Company,    Inc.    ("CalEnergy")
(see Note 3).

    In   June   1995,   the   Royalty  Company   received   an   assignment   of
royalties    and   certain   fees   paid   by   three   partnership    projects,
Del    Ranch,    Elmore   and   Leathers   (collectively,    the    "Partnership
Projects").    Magma   and  its  affiliates  have  a   50%   interest   in   the
Partnership    Projects.     In    addition,    the    Royalty    Company    has
received    an   assignment   of   certain   resource-related   royalties    and
contract    assignment    royalties   payable   by    the    geothermal    power
plant   located   in  Imperial  Valley,  California  which  is   owned   by   an
unaffiliated     third     party    (East    Mesa,     together     with     the
Partnership   Projects,   the   "Projects").    All   of   the   Projects    are
engaged    in    the   operation   of   geothermal   power   plants    in    the
Imperial   Valley   in   Southern  California.    Substantially   all   of   the
assigned    royalties   are   based   on   a   percentage    of    energy    and
capacity    revenues    of    the   Projects.     With    the    exception    of
royalties   from   East   Mesa   (Note  2),  the   royalties   are   senior   to
debt    service    and    are   pari   passu   with    other    operating    and
maintenance expenses of the Projects.

    All   of   the   Projects   have   executed   long-term   Interim   Standard
Offer    No.    4   power   purchase   agreements   ("ISO4s")   providing    for
capacity   and   energy   sales   to   Southern   California   Edison    Company
("Edison").     Each   of   these   agreements   provides   for   fixed    price
capacity payments for the life of the contract.

     The    Projects   earn   energy   payments   based   on   kilowatt    hours
(kWhs)   of   energy   provided  to  Edison.   During   the   first   10   years
of    the    agreement,   the   Projects   earn   payments   for    energy    as
scheduled    in   their   ISO4s.    After   the   10-year   scheduled    payment
period   has   expired   (1998   for   Del   Ranch   and   Elmore;   1999    for
Leathers   and   East   Mesa),   the   energy   payment   per   kWh   throughout
the   remainder   of   the  contract  period  will  be   at   Edison's   Avoided
Cost   of   Energy.    For   the  year  ended  December   31,   1994,   Edison's
average   Avoided   Cost   of  Energy  was  2.5   cents   per   kWh   which   is
substantially   below   the   contract   energy   prices   earned    in    1994.
Estimates    of    Edison's    future    Avoided    Cost    of    Energy    vary
substantially    from    year   to   year.    The   Royalty    Company    cannot
predict   the   likely   level  of  Avoided  Cost   of   Energy   prices   under
the    ISO4s   at   the   expiration   of   the   scheduled   payment   periods.
The   revenues   generated  by  each  of  the  units   operating   under   ISO4s
could   decline   significantly   after   the   expiration   of   the   relevant
scheduled payment period.

    As   discussed   above,  all  revenues  except  those  derived   from   East
Mesa are from or through related parties.


2. BASIS OF PRESENTATION

     The    accompanying   Predecessor   Summary   of   Revenues   and   Related
Expenses   present   predecessor  revenues   and   expenses   for   the   period
indicated   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    historical
information   from   Magma   and  certain  of   its   affiliates.    The   basis
of   presentation   described  herein  is  not  intended  to   be   a   complete
presentation     of     the     Royalty    Company's    assets,     liabilities,
revenues    and   expenses.    Such   revenues,   net   of   related   expenses,
will    serve    to    guarantee    loans   from    Funding    Corporation,    a
wholly-owned subsidiary of CalEnergy (see Note 4).

     During    1994,    the   entire   $14,502   balance   due    from    junior
royalties   from   East  Mesa  was  written  off  due  to  uncertainty   as   to
their   collectibility.    The   write-off   was   considered   necessary    due
to    the    inability    of   the   East   Mesa   plant    to    convert    its
construction    loans   to   term   loans   as   had   been   expected    during
1994.    The   timing   of  such  conversion,  which  is   a   prerequisite   to
the    collection   of   the   junior   royalties,   is   uncertain.    Revenues
related   to   the   East   Mesa   junior   royalties   for   the   year   ended
December 31, 1994 were $3,412.


3. PURCHASE OF MAGMA POWER COMPANY

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


4. SENIOR SECURED PROJECT NOTE

     The   Royalty   Company   assumed   its   proportionate   share   of    the
secured    bank   financing   incurred   in   connection   with   the   purchase
of   Magma   (see   Note   3).   On  July  21,  1995,  CalEnergy   recapitalized
Magma    and   the   related   Merger   Facilities   from   proceeds    received
through   a   $200,000   high   yield  offering  and   a   $475,000   investment
grade    offering    by    Funding    Corporation.     The    Royalty    Company
issued   a   project  note  in  the  amount  of  $75,000  payable   to   Funding
Corporation   with   maturities   of   $7,118,   $10,946,   $18,001,    $15,725,
$9,396,    and    $13,814    in   1995,   1996,    1997,    1998,    1999    and
thereafter,   respectively,   at  interest   rates   ranging   from   6.69%   to
7.37%   and   guaranteed,   to   the  extent  of  available   cash   flow,   the
investment      grade     securities.      The     guarantee      issued      is
collateralized   by  a  lien  on  substantially  all  the  assets   of   and   a
pledge of stock in the Guarantor.



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

  Not applicable.

                            PART III


Item 10.    Directors and Executive Officers of the Registrant

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

EXECUTIVE OFFICER     POSITION

David L. Sokol        Chairman of the Board and Chief Executive Officer
Thomas R. Mason       President and Chief Operating Officer, CalEnergy Americas
Gregory E. Abel       President and Chief Operating Officer, CalEnergy Europe
                      and Chief Accounting Officer, CalEnergy
Edward F. Bazemore    Vice President, Human Resources
Steven A. McArthur    Senior Vice President, General Counsel and Secretary
John G. Sylvia        Senior Vice President and Chief Financial Officer

        DAVID   L.   SOKOL,  40,  Chairman  of  the  Board  of   Directors   and
Chief    Executive    Officer.   Mr.   Sokol   has    been    Chief    Executive
Officer   since   April   19,  1993  and  served  as  President   of   CalEnergy
from   April   19,   1993  until  January  21,  1995.  He  has   been   Chairman
of   the   Board   of  Directors  since  May  1994.  Mr.  Sokol   has   been   a
director   of   CalEnergy   since   March  1991.   Formerly,   Mr.   Sokol   was
Chairman,   President   and   Chief  Executive   Officer   of   CalEnergy   from
February   1991   until  January  1992.  Mr.  Sokol  was   the   President   and
Chief   Operating   Officer   of,   and  a  director   of,   JWP,   Inc.,   from
January   27,   1992   to   October   1,  1992.   From   November   1990   until
February   1991,   Mr.   Sokol   was   the   President   and   Chief   Executive
Officer    of    Kiewit   Energy   Company,   the   largest    stockholder    of
CalEnergy and a wholly owned subsidiary of PKS.

        THOMAS   R.   MASON,   53,  President  and  Chief   Operating   Officer,
CalEnergy    Americas.   Mr.   Mason   joined   CalEnergy   in    March    1991.
From   October   1989  to  March  1991,  Mr.  Mason  was  Vice   President   and
General    Manager    of    Kiewit    Energy    Company.    Prior    to    that,
Mr.   Mason   was   Director  of  Marketing  for  Energy  Factors,   Inc.   (now
Sithe    Energies   U.S.A.,   Inc.),   a   non-utility   developer   of    power
facilities.    Prior    to   that   Mr.   Mason   was   a    worldwide    Market
Manager   of   power   generation   for  Caterpillar's   Solar   Gas   Turbines,
a gas turbine manufacturer.

        GREGORY   E.   ABEL,   34,  President  and  Chief   Operating   Officer,
CalEnergy     Europe     and     Chief    Accounting     Officer,     CalEnergy.
Mr.    Abel    joined   CalEnergy   in   1992.   Mr.   Abel   is   a   Chartered
Accountant    and   from   1984   to   1992   he   was   employed    by    Price
Waterhouse.   As   a   Manager   in   the  San   Francisco   office   of   Price
Waterhouse,    he    was    responsible    for    clients    in    the    energy
industry.

         EDWARD    F.   BAZEMORE,   60,   Vice   President,   Human   Resources.
Mr.   Bazemore  joined  CalEnergy  in  July  1991.  From  1989   to   1991,   he
was   Vice   President,   Human   Resources,  at   Ogden   Projects,   Inc.   in
New   Jersey.   Prior   to   that,   Mr.  Bazemore   was   Director   of   Human
Resources   for   Ricoh   Corporation,   also   in   New   Jersey.   Previously,
he    was   Director   of   Industrial   Relations   for   Scripto,   Inc.    in
Atlanta, Georgia.

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

         JOHN    G.    SYLVIA,   38,   Senior   Vice   President    and    Chief
Financial   Officer.   Mr.  Sylvia  joined  CalEnergy   in   1988.   From   1985
to   1988,   Mr.   Sylvia   was   a   Vice   President   of   an   international
financial    institution    with    responsibility    for    global    corporate
and   capital   markets  banking.  From  1986  to  1990,   Mr.   Sylvia   served
as   an   Adjunct   Professor  of  Applied  Economics  at  the   University   of
San    Francisco.    From    1982   to   1985,   Mr.   Sylvia    held    various
corporate finance positions with investment and financial firms.

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,  1996,  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,  1996,  there   was   one   holder
of    record   of   the   Common   Stock.   Holders   of   Common   Stock    are
entitled   to   one   vote   per  share  on  any  matter   coming   before   the
stockholders for a vote.

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


Principal Holders

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


Item 13.  Certain Relationships and Related Transactions

Other Relationships and Related Transactions

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

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

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


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

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


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

     (a)  Financial Statements and Schedules

     (i)  Financial Statements

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

     (ii) Financial Statement Schedules

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

  (b)  Reports on Form 8-K

     None.

  (c)  Exhibits

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

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

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

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

  Not Applicable
                           Signatures

    Pursuant   to   the  requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                              SALTON SEA FUNDING CORPORATION

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

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

Signature                                                           Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G.  Sylvia*                                           March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                           March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

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

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

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

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

Signature                                                             Date

/s/  David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                             March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/  Gregory  E. Abel*                                          March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                            March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                          March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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

                            Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

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

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

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

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

Signature                                                           Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                           March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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

                              Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.
  
                            FISH LAKE POWER COMPANY

                            By:/s/ David L. Sokol*

                            David L. Sokol
                            Director, Chairman of the Board of Directors
                            and Chief Executive Officer

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

Signature                                                         Date

/s/ David  L. Sokol*                                           March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/  Thomas R. Mason*                                          March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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


                           Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                                   VULCAN POWER COMPANY

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

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

Signature                                                            Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                           March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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


                           Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                                    CALENERGY OPERATING COMPANY

                                    By:/s/ David L. Sokol*

                                    David L. Sokol
                                    Director, Chairman of the Board of Directors
                                    and Chief Executive Officer

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

Signature                                                            Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                           March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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

                           Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                                  SALTON SEA ROYALTY COMPANY

                                  By:/s/ David L. Sokol*

                                  David L. Sokol
                                  Director, Chairman of the Board of Directors
                                  and Chief Executive Officer

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

Signature                                                             Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/  Thomas R. Mason*                                          March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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


                            Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                              LEATHERS, L.P., a
                              California  limited partnership

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

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

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

Signature                                                             Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                             March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                            March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                            March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                          March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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


                            Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                                  ELMORE L.P., a California limited partnership

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

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

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

Signature                                                         Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                           March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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


                            Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                              DEL RANCH L.P., a
                              California  limited partnership

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

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

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

Signature                                                         Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                           March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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

                            Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                              BN GEOTHERMAL INC., a
                              Delaware corporation


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

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

Signature                                                             Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E.  Abel*                                          March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                           March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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

                            Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                              NIGUEL ENERGY COMPANY, a
                              California  corporation

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

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

Signature                                                           Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                           March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/  Steven A. McArthur                                        March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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


                            Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                              CONEJO ENERGY COMPANY, a
                              California  corporation


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

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

Signature                                                          Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                           March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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


                            Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

                              SAN FELIPE ENERGY COMPANY, a
                              California  corporation

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

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

Signature                                                           Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/  Gregory E. Abel*                                          March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/  Thomas R. Mason*                                          March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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


                            Signatures

   Pursuant   to   the   requirements  of  Section  13  or   15   (d)   of   the
Securities   Exchange   Act   of   1934,  the   Registrant   has   duly   caused
this    report    to   be   signed   on   its   behalf   by   the   undersigned,
thereunto    duly    authorized,   in   the   City   of    Omaha,    State    of
Nebraska, on March 27, 1997.

              VULCAN/BN GEOTHERMAL POWER COMPANY, a
                   Nevada general partnership

                                    By: VULCAN POWER COMPANY, a
                                    Nevada corporation, Partner

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

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

Signature                                                          Date

/s/ David L. Sokol*                                            March 27, 1997
David L. Sokol
Director, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)

/s/ John G. Sylvia*                                            March 27, 1997
John G. Sylvia,
Director, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ Gregory E. Abel*                                           March 27, 1997
Gregory E. Abel
Chief Accounting Officer and President
and Chief Operating Officer, CalEnergy Europe,
(Principal Accounting Officer)

/s/ Thomas R. Mason*                                           March 27, 1997
Director, President and Chief Operating Officer,
CalEnergy Americas

/s/ Steven A. McArthur                                         March 27, 1997
Steven A. McArthur
Director, Senior Vice President,
General Counsel and Secretary

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


                       INDEX TO EXHIBITS


Exhibit No.          Description of Exhibit

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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




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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


10.22       Intentionally Omitted.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

24. Power of Attorney

27. Financial Data Schedule.