SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON D.C. 20549
                             ----------------------

                                    FORM 10-Q

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

                         For the quarterly period ended

                                  JUNE 30, 2002

                           COMMISSION FILE NO. 333-608

                   CE CASECNAN WATER AND ENERGY COMPANY, INC.
             (Exact name of registrant as specified in its charter)

                   PHILIPPINES                         Not Applicable
      -----------------------------------           --------------------
      (State or other jurisdiction of               (I.R.S. Employer
       incorporation or organization)                Identification No.)

      24th Floor, 6750 Building, Ayala Avenue
      Makati, Metro Manila Philippines                 Not Applicable
      -------------------------------------------   --------------------
      (Address of principal executive offices)          (Zip Code)

        Registrant's telephone number, including area code (632) 892-0276
                                                           ---------------

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
                              ---------                ----------

Former  name,  former  address and former  fiscal  year,  if changed  since last
report. Not Applicable
        ---------------

767,162 shares of Common Stock, $0.038 par value were outstanding as of July 9,
2002.



<PAGE>



                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                                    Form 10-Q

                                  June 30, 2002
                                  -------------

                                 C O N T E N T S

PART I:  FINANCIAL INFORMATION                                             Page
------------------------------

Item 1.           Financial Statements

Report of Independent Public Accountants                                      3

Balance Sheets, June 30, 2002 and December 31, 2001                           4

Statements of Income for the Three and Six Months Ended
June 30, 2002 and 2001                                                        5

Statements of Cash Flows for the Six Months Ended
June 30, 2002 and 2001                                                        6

Notes to Financial Statements                                                 7

Item 2.         Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                    12

PART II:  OTHER INFORMATION

Item 1.         Legal Proceedings                                            19
-------
Item 2.         Changes in Securities                                        19
-------
Item 3.         Defaults on Senior Securities                                19
-------
Item 4.         Submission of Matters to a Vote of Security Holders          19
-------
Item 5.         Other Information                                            19
-------
Item 6.         Exhibits and Reports on Form 8-K                             19
-------

Signatures                                                                   20




<PAGE>

Report of Independent Accountants

To the Board of Directors and Stockholders of CE Casecnan Water and Energy
Company, Inc.



We have reviewed the accompanying balance sheets of CE Casecnan Water and Energy
Company,  Inc. as of June 30, 2002 and 2001 and the related statements of income
for the three and six months  ended June 30, 2002 and 2001 and of cash flows for
the six months ended June 30, 2002 and 2001. These financial  statements are the
responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical review procedures to the
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of an opinion  regarding the  financial  statements  taken as a
whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the  accompanying  interim  financial  statements  for  them to be in
conformity with accounting principles generally accepted in the United States of
America.

We previously audited in accordance with auditing  standards  generally accepted
in the United States of America,  the balance sheet as of December 31, 2001, and
the related  statements of income,  changes in stockholders'  equity and of cash
flows for the year then ended (not  presented  herein),  and in our report dated
February  26,  2002,  we expressed  an  unqualified  opinion on those  financial
statements.  In our  opinion,  the  information  set  forth in the  accompanying
balance  sheet  information  as of December  31, 2001,  is fairly  stated in all
material  respects  in  relation  to the  balance  sheet  from which it has been
derived.




Makati City, Philippines
July 9, 2002

<PAGE>



                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                                 BALANCE SHEETS
             (Amounts in thousands U.S. Dollars, except share data)

===============================================================================
                                                    June 30,      December 31,
                                                      2002            2001
                                                  (Unaudited)      (Audited)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

                                   A S S E T S
Current assets:
     Cash                                        $  5,004         $    1,078
     Trade receivable, net                         24,850              8,012
     Accrued interest and other receivables         6,560              6,601
      Restricted cash                               4,238              -
     Prepaid expenses and other current assets      2,868              3,285
---------------------------------------------------------- -------------------
---------------------------------------------------------- -------------------
         Total current assets                      43,520             18,976
Restricted cash and investments                     5,978              5,978
Bond issue costs, net                               5,965              6,712
Property, plant and equipment, net                456,033            466,455
Deferred income tax                                 5,371              5,371
Other assets                                        8,613             11,700
---------------------------------------------------------- -------------------
                                                 $525,480           $515,192
========================================================== ===================

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable and accrued expenses       $  4,971         $    4,626
     Accrued interest                               4,367              5,014
     Payable to affiliates                         36,712             34,699
     Current portion of long-term debt             38,146             35,200
---------------------------------------------------------- -------------------
         Total current liabilities                 84,196             79,539
---------------------------------------------------------- -------------------
Notes payable                                      51,263             40,763
---------------------------------------------------------- -------------------
Long-term debts, net of current portion           267,191            287,925
---------------------------------------------------------- -------------------
Commitments and contingencies (Note 5)
---------------------------------------------------------- -------------------
Stockholders' equity
     Capital stock
         Authorized - 2,148,000 shares at one Philippine peso
                ($0.038) par value per share
         Issued and outstanding - 767,162 shares       29                 29
     Additional paid-in capital                   123,807            123,807
     Accumulated deficit                           (1,006)           (16,871)
---------------------------------------------------------- -------------------
                                                  122,830            106,965
---------------------------------------------------------- -------------------
                                                 $525,480         $  515,192
========================================================== ===================

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


<PAGE>


                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                              STATEMENTS OF INCOME
             (Amounts in thousands U.S. Dollars, except share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
  ====================================================================================================
                                                 Three Months Ended               Six Months Ended
                                                       June 30                         June 30
                                           -----------------------------------------------------------
                                           -----------------------------------------------------------
                                                2002            2001           2002           2001
  ----------------------------------------------------------------------------------------------------
<S>                                         <C>            <C>             <C>            <C>
    Revenues
       Delivery of water                    $   21,294     $      -        $    39,782    $      -
       Sale of electricity                       9,095            -             18,189           -
  ----------------------------------------------------------------------------------------------------
                                                30,389            -             57,971           -
  ----------------------------------------------------------------------------------------------------
    Operating expenses
       Depreciation                              5,599            -             11,739           -
       Plant operations                          2,330            215            4,067           431
       Doubtful accounts expense                 2,625            -              4,885           -
  ----------------------------------------------------------------------------------------------------
                                                10,554            215           20,691           431
  ----------------------------------------------------------------------------------------------------
    Operating income (loss)                     19,835           (215)          37,280          (431)
  ----------------------------------------------------------------------------------------------------
    Other income (expenses)
       Interest income                              62            131               96           869
       Interest expense                        (10,707)       (11,224)         (21,504)      (22,652)
       Capitalized interest                      -             11,224            -            22,652
       Other expense                             -                -                 (7)          -
  ----------------------------------------------------------------------------------------------------
                                               (10,645)           131          (21,415)          869
  ----------------------------------------------------------------------------------------------------
    Income (loss) before income taxes            9,190            (84)          15,865           438
    Income tax benefit (expense)                 -                 19            -               (98)
  ----------------------------------------------------------------------------------------------------
    Net income (loss)                      $     9,190     $      (65)     $    15,865    $      340
  ====================================================================================================

    Net income (loss) per share            $     11.98         ($0.09)     $     20.68    $     0.44
  ====================================================================================================

    Average number of common shares
        outstanding                            767,162        767,162          767,162       767,162
  =====================================================================================================
</TABLE>

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



<PAGE>


                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                            STATEMENTS OF CASH FLOWS
                       (Amounts in thousands U.S. Dollars)
                                   (Unaudited)
<TABLE>
<CAPTION>
========================================================================================================================
                                                                                              Six Months Ended
                                                                                                   June 30
                                                                                      ----------------------------------
                                                                                      ----------------------------------
                                                                                            2002             2001
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>           <C>
  Cash flows from operating activities
     Net income                                                                            $  15,865     $        340
     Adjustments to reconcile net income to net cash
        provided by operating activities:
         Depreciation                                                                         11,739            -
         Amortization of bond issue costs                                                        747              802
         Provision for income taxes                                                               -                98
     Changes in current assets and current liabilities:
         Increase in trade receivable                                                        (16,838)           -
         Decrease in accrued interest and other receivables                                       41              579
         Decrease (increase) in prepaid expenses and other current assets                        417              (47)
         Increase in accounts payable and accrued expenses                                       345               21
         Decrease in accrued interest                                                           (647)            (204)
         Increase in payable to affiliates related to operations                               2,013            -
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
     Net cash provided by operating activities                                                13,682            1,589
------------------------------------------------------------------------------------------------------------------------
  Cash flows from investing activities
     Additions to development and construction costs                                          (1,317)         (36,434)
     Decrease in restricted cash and investments                                                   -           45,349
     Decrease (increase) in other assets                                                       3,087             (805)
     Decrease in accounts payable and accrued expenses
        related to development and construction costs                                             -              (376)
------------------------------------------------------------------------------------------------------------------------
     Net cash provided by (used in) investing activities                                       1,770            7,734
------------------------------------------------------------------------------------------------------------------------
  Cash flows from financing activities
     Increase in restricted cash and investments                                              (4,238)               -
     Increase in payable to affiliates related to construction                                 -                5,652
     Repayment of bonds payable                                                              (17,788)         (14,625)
     Increase in notes payable                                                                10,500            -
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
     Net cash used in financing activities                                                   (11,526)          (8,973)
------------------------------------------------------------------------------------------------------------------------
  Net increase in cash                                                                         3,926              350
  Cash at beginning of period                                                                  1,078              703
------------------------------------------------------------------------------------------------------------------------
  Cash at end of period                                                                    $   5,004     $      1,053
========================================================================================================================
</TABLE>


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


<PAGE>



CE CASECNAN WATER AND ENERGY COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002


Note 1 - General

In the opinion of the management of CE Casecnan Water and Energy  Company,  Inc.
(CE Casecnan or the Company),  the accompanying  unaudited financial  statements
contain all adjustments (consisting only of normal recurring accruals) necessary
to present fairly the financial  position of the Company as of June 30, 2002 and
December 31, 2001,  the results of its  operations  for the three and six months
ended June 30,  2002 and 2001 and its cash  flows for the six months  ended June
30, 2002 and 2001.

The results of  operations  for the three and six months ended June 30, 2002 and
2001 are not  necessarily  indicative of the results to be expected for the full
year.

The Company's operations have been in one reportable segment, the domestic water
and electricity generation industry.

Note 2 - Trade receivable

Trade  receivable   pertains  to  a  receivable  from  the  Philippine  National
Irrigation  Administration  (NIA) for water delivered to NIA and the electricity
generated  and  delivered  by the  Company  to  the  Philippine  National  Power
Corporation (NPC) on behalf of NIA.

Trade  receivable  as of June 30, 2002 and  December  31,  2001  consists of (in
thousands):

========================================================== ==================
                                                June 30,    December 31, 2001
                                                  2002
---------------------------------------------------------- ------------------
---------------------------------------------------------- ------------------
Water delivery fee                              $26,580             $4,474
Guaranteed energy delivery fee                    3,676              2,059
Excess energy delivery fee                            -              2,000
---------------------------------------------------------- ------------------
                                                 30,256              8,533
Less - allowance for doubtful accounts            5,406                521
---------------------------------------------------------- ------------------
                                                $24,850             $8,012
========================================================== ==================

NIA has not paid the tax  reimbursement  portion  of the  amounts  due for water
delivery fees under the Project  Agreement as of June 30, 2002 of $19.6 million.
The Company is in  discussions  with NIA and  representatives  of the Philippine
Government  regarding  the tax  reimbursement  amounts.

<PAGE>

Note 3 - Related  party transactions

In the normal course of business,  the Company  transacts with its affiliates in
the form of advances  for  construction  related  and  operating  expenses.  The
payable to  affiliates  was $36.7 million and $34.7 million at June 30, 2002 and
December 31, 2001, respectively.

The Company has $51.3  million of  unsecured  subordinated  notes  payable to CE
Casecnan Ltd. due November 15, 2005. The unsecured  notes bear interest at LIBOR
plus two (2%) percent which is payable every May 15 and November 15. Any overdue
amounts of principal or interest payable on the notes shall bear interest at the
stated rate plus two (2%) percent.  The notes may be prepaid at any time without
premium or penalty but with accrued interest, if any. The unsecured subordinated
notes and any and all payments,  whether of principal,  interest or otherwise on
such  notes  are  subject  in all  respects  to the  terms of the  Subordination
Agreement  dated  November 15, 2001 between CE Casecnan  Ltd. and the Company in
favor of the  Trustee,  the  Collateral  Agent,  the  co-collateral  agent,  the
Depositary,  any party that becomes a Permitted  Counterparty  under an Interest
Rate/Currency  Protection  Agreement,  any party that becomes a working  capital
facility  agent and any other  Person  that  becomes a secured  party  under the
Intercreditor Agreement.

Note 4 - Current portion of long-term debt

Floating  Rate Notes (FRNs) of $13.1  million and Series B Bonds of $4.3 million
will become due and payable on November 15, 2002 and an additional $16.9 million
Series A and $3.8  million  Series B Bonds  will be due and  payable  on May 15,
2003.

Note 5 - Commitments and contingencies

Construction contract arbitration

On May 7, 1997, the Company  entered into a fixed-price,  date certain,  turnkey
engineering,  procurement and construction contract to complete the construction
of the Casecnan Project (Construction Contract). The work under the Construction
Contract was  conducted  by a  consortium  consisting  of  Cooperativa  Muratori
Cementisti  CMC di Ravenna and Impresa  Pizzarotti & C. Spa.,  working  together
with  Siemens  A.G.,  Sulzer  Hydro  Ltd.,  Black &  Veatch  and  Colenco  Power
Engineering Ltd. (collectively, the Contractor).

On  November  20,  1999,  the  Construction  Contract  was amended to extend the
Guaranteed  Substantial  Completion  Date for the Casecnan  Project to March 31,
2001. This amendment was approved by the lenders' independent engineer under the
Trust  Indenture.  In January 2001, the Company  received a new working schedule
from the Contractor  that showed a completion date of August 31, 2001. The delay
in completion was  attributable  in part to the collapse in December 2000 of the
Casecnan  Project's  partially  completed  vertical  surge shaft and the need to
drill a replacement surge shaft.

<PAGE>

Upon the receipt of the working  schedule,  the Company sought and obtained from
the lender's independent  engineer approval for a revised construction  schedule
under the Trust Indenture. In connection with the revised schedule, the ultimate
parent  company of CE Casecnan  agreed to make  available up to $11.6 million of
additional  funds under certain  conditions  pursuant to a  Shareholder  Support
Letter dated February 8, 2001 (Shareholder  Support Letter). The ultimate parent
company  has fully  satisfied  its  obligations  under the  Shareholder  Support
Letter.

The  receipt  of  the  new  working  schedule  did  not  change  the  Guaranteed
Substantial  Completion Date under the Construction Contract, and the Contractor
was still  contractually  obligated  either to complete the Casecnan  Project by
March 31, 2001 or to pay liquidated  damages for the delay in completion.  As of
June 30, 2002, the Company has received approximately $6.0 million of liquidated
damages from  demands made on the demand  guarantees  posted by  Commerzbank  on
behalf of the Contractor.

On February 12, 2001, the Contractor  filed a Request for  Arbitration  with the
International  Chamber  of  Commerce  seeking  an  extension  of the  Guaranteed
Substantial  Completion Date by up to 153 days through August 31, 2001 resulting
from various alleged force majeure  events.  In its March 20, 2001 Supplement to
Request for  Arbitration,  the Contractor also sought  compensation  for alleged
additional  costs of  approximately  $4.0  million it incurred  from the claimed
force majeure events to the extent it is unable to recover from its insurer.  On
April 20, 2001, the Contractor filed a further  supplement seeking an additional
compensation  for damages of  approximately  $62.0 million for the alleged force
majeure  event (and  geologic  conditions)  related to the collapse of the surge
shaft. The Contractor has alleged that the circumstances surrounding the placing
of the Casecnan Project into commercial  operation on December 11, 2001 amounted
to a  rescission  of the  Construction  Contract  and  has  filed  a  claim  for
unspecified  quantum meruit damages.  CE Casecnan  believes all such allegations
and claims are  without  merit and is  vigorously  contesting  the  Contractor's
claims. The arbitration is being conducted applying New York law and pursuant to
the rules of the International Chamber of Commerce.  Although the outcome of the
arbitration,  as with any  litigious  proceeding,  is difficult  to assess,  the
Company believes it will prevail and receive  additional  liquidated  damages in
the arbitration.

On June 25, 2001, the arbitration tribunal temporarily enjoined CE Casecnan from
making  calls on the demand  guaranty  posted by Banca di Roma in support of the
Contractor's  obligations to CE Casecnan for delay liquidated  damages. On April
26, 2002, CE Casecnan and the Contractor  mutually  agreed that no demands would
be made on the Banca di Roma demand  guaranty  except pursuant to an arbitration
award.  Hearings on the force majeure  claims were held in London from July 2 to
14, 2001, and hearings on the  Contractor's  April 20, 2001 supplement were held
from September 24 to October 3, 2001. Further hearings were held from January 21
to February 1, 2002 and additional hearings were held from March 14 to 19, 2002.
The Company is awaiting the arbitration tribunal's ruling.


<PAGE>


Shareholder Agreement litigation

The  Casecnan  Project  commenced  commercial  operations  on December 11, 2001.
Pursuant  to  the  share  ownership  adjustment  mechanism  in  the  Shareholder
Agreement,  which is based upon pro-forma financial  projections of the Casecnan
Project prepared following  commencement of commercial  operations,  MidAmerican
Energy  Holdings  Company  (MidAmerican),  through its wholly  owned  indirect
subsidiary  CE Casecnan  Ltd.,  has advised the minority  shareholder  LaPrairie
Group  Contractors  (International)  Ltd. (LPG) that  MidAmerican's  ownership
interest in the Company  will  increase  to 100%.  On July 8, 2002,  LPG filed a
complaint in the Superior Court of the State of  California,  City and County of
San Francisco against, inter alia, CE Casecnan Ltd. and MidAmerican. The Company
is not  named as a  defendant.  In the  complaint,  LPG seeks  compensatory  and
punitive damages for alleged  breaches of the Shareholder  Agreement and alleged
breaches of fiduciary  duties allegedly owed by MidAmerican and CE Casecnan Ltd.
to LPG. The complaint  also seeks  injunctive  relief against all the defendants
and a declaratory  judgment that LPG is entitled to maintain its 15% interest in
the  Company.  The Company does not expect any  material  financial  impact as a
result of this litigation.

Project transmission line

Under the Project Agreement, if NIA is able to accept delivery of water into the
Pantabangan  Reservoir and NPC has completed the Project's related  transmission
line,  the  Company is liable to pay NIA $5,500 per day for each day of delay in
completion of the Casecnan  Project beyond July 27, 2000,  increasing to $13,500
per day for each day of  delay in  completion  beyond  November  27,  2000.  The
Project  transmission  line was  completed on August 13, 2001 when NIA completed
the installation and testing of the Project's metering  equipment.  Accordingly,
the Company has accrued $1.6 million for liquidated damages as of June 30, 2002,
payable to NIA for 120 days of delay.  This is included in accounts  payable and
accrued expenses in the related balance sheets.

Concentration of risk

NIA's payments under the Project Agreement will be substantially  denominated in
United  States  Dollars  and are  expected  to be the  Company's  sole source of
operating  revenues.  Because of the  Company's  dependence on NIA, any material
failure of NIA to fulfill its  obligations  under the Project  Agreement and any
material  failure of the Republic of the  Philippines to fulfill its obligations
under the Performance  Undertaking would significantly impair the ability of the
Company to meet its existing and future obligations.  No shareholders,  partners
or affiliates of the Company, including MidAmerican, and no directors,  officers
or employees  of the Company will  guarantee or be in any way liable for payment
of the Company's obligations.  As a result, payment of the Company's obligations
depends upon the availability of sufficient revenues from the Company's business
after the payment of operating expenses.

<PAGE>

Regulatory environment

The Philippine  Congress has passed the Electric  Power  Industry  Reform Act of
2001 which is aimed at  restructuring  the power industry,  privatization of the
NPC and  introduction of a competitive  electricity  market,  among others.  The
passage of the bill may have an impact on the Company's  future  operations  and
the  industry  as a whole,  the  effect  of which  is not yet  determinable  and
estimable.

In connection with an interagency  review of approximately 40 independent  power
project  contracts  in the  Philippines  in  July  2002,  the  Casecnan  Project
(together with four other  projects) has reportedly  been  identified as raising
legal  and  financial  questions  and,  with  those  other  contracts,  has been
prioritized  for  renegotiation.  No  written  report has yet been  issued  with
respect to the interagency  review,  and the timing and nature of steps, if any,
that  the  Philippine  Government  may  take  in  this  regard  are  not  known.
Accordingly,  it is not known what, if any, impact the government's  review will
have on the operations of the Company.  Company  representatives,  together with
certain  current and former  government  officials,  also have been requested to
appear, and have appeared, before a Philippine Senate committee which has raised
questions and made  allegations  with respect to the Project's  tariff structure
and  implementation.  The Company  expects that these  hearings  will  continue,
although  their exact scope and nature is difficult  to assess.  The Company has
and intends to continue to respond to such  questions and to  vigorously  defend
the Project against any allegations  which may be made. The Company believes the
allegations  made with respect to the Project to be without merit. To the extent
disputes  arise  under the  Project  Agreement  with  respect  to the  Company's
obligations, rights and remedies thereunder, such disputes will be determined by
international  arbitration in a neutral forum  conducted in accordance  with the
rules of the International Chamber of Commerce.

Note 6 - Other footnote information

Reference  is  made  to  the  Company's  December  31,  2001  audited  financial
statements included in Form 10-K that provides  information  necessary or useful
to  the  understanding  of  the  Company's  business  and  financial   statement
presentations.  In particular, the Company's significant accounting policies and
practices are presented in Note 2 to the  financial  statements  included in the
report.

<PAGE>

CE CASECNAN WATER AND ENERGY COMPANY, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Results of Operations

The Casecnan Project commenced commercial operations on December 11, 2001.

The revenue of $30.4  million for the three months and $58.0 million for the six
months  ended June 30, 2002  consists  of revenue for the  delivery of water and
delivery of  electrical  energy.  Revenue from delivery of water and delivery of
electrical energy are 70% and 30%,  respectively,  of the total revenue for this
quarter.  Revenue from sales of  electrical  energy  consists only of guaranteed
energy  delivery fees. The prevailing dry season  resulted in zero excess energy
deliveries.

Depreciation  expense for the three and six months  ended June 30, 2002 was $5.6
million and $11.7 million, respectively.

Plant  operation costs of $2.3 million and $0.2 million were incurred during the
three months ended June 30, 2002 and 2001,  respectively.  Plant operation costs
for the six  months  ended  June 30,  2002 and 2001 were $4.1  million  and $0.4
million,  respectively.  The  increase  in  costs  in  2002  resulted  from  the
commencement  of commercial  operations of the Casecnan  Project on December 11,
2001.

Doubtful accounts expense was $2.6 million and $4.9 million in the three and six
months ended June 30, 2002,  respectively.  The  doubtful  accounts  expense was
based  on the  Company's  assessment  of  the  collectibility  of  the  accounts
receivable.

Interest income consists of income on cash and restricted investments.  Interest
income  decreased  in the  second  quarter  of 2002 to $62  thousand  from  $131
thousand in the same period in 2001.  Interest  income was $0.1 million and $0.9
million,  respectively  for the six months  ended June 30, 2002 and 2001.  These
decreases are primarily due to lower cash balances.

Interest expense inclusive of bond issue costs in the second quarter of 2002 was
$10.7  million  compared to $11.2  million  for the same period in 2001,  a 4.6%
decrease.  Year to date interest expense was $21.5 million in 2002,  compared to
$22.7  million for the same period in 2001,  a 5.1%  decrease.  The  decrease in
interest  expense  resulted  from  scheduled  repayments  of  principal  of  the
Company's Floating Rate Notes and Series B bonds, offset in part by the issuance
of unsecured subordinated notes to CE Casecnan, Ltd.

<PAGE>

Critical Accounting Policies

The  preparation of financial  statements and related  disclosures in conformity
with accounting  principles  generally  accepted in the United States of America
requires management to make judgments, assumptions and estimates that affect the
amounts reported in the financial  statements and accompanying  notes. Note 2 to
the  financial  statements  included  in the report on Form 10-K  describes  the
significant  accounting  policies  and methods  used in the  preparation  of the
financial statements. Estimates are used for, but not limited to, the accounting
for the  allowance  for  doubtful  accounts,  income  taxes  and  impairment  of
long-lived  assets.  Actual  results  could  differ  from these  estimates.  The
following critical accounting policies are impacted  significantly by judgments,
assumptions and estimates used in the preparation of the financial statements.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is based on the Company's  assessment of the
collectibility  of a  specific  customer's  account.  This  assessment  requires
judgment  regarding the ability of the customer to repay the amounts owed to the
Company.  Any  change  in the  Company's  assessment  of the  collectibility  of
accounts  receivable  that was not previously  provided for could  significantly
impact the calculation of such allowance and the results of operations.

Impairment of long-lived assets

Long-lived  assets are reviewed  for  impairment  whenever  events or changes in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable.  Triggering  events  include a significant  change in the extent or
manner in which long-lived  assets are being used or in its physical  condition,
in legal factors,  or in the business climate that could affect the value of the
long-lived assets,  including changes in regulation.  The interpretation of such
events  requires  judgment  from  management  as to  whether  such an event  has
occurred  and is  required.  If an event  occurs that could  affect the carrying
value of the asset and  management  does not identify it as a triggering  event,
future results of operations could be significantly affected.

Upon the occurrence of a triggering  event,  the carrying amount of a long-lived
asset is reviewed to assess  whether the  recoverable  amount has declined below
its carrying  amount.  The  recoverable  amount is the estimated net future cash
flows that the  Company  expects  to  recover  from the future use of the asset,
undiscounted and without interest,  plus the asset's residual value on disposal.
Where the recoverable  amount of the long-lived  asset is less than the carrying
value,  an  impairment  loss would be  recognized to write down the asset to its
fair value which is based on discounted estimated cash flows from the future use
of the asset.

<PAGE>

The  estimated  cash flows arising from future use of the asset that are used in
the  impairment  analysis  requires  judgment  regarding  what the Company would
expect to recover from future use of the asset.  Any changes in the estimates of
cash flows  arising  from future use of the asset or the  residual  value of the
asset on disposal based on changes in the market conditions,  changes in the use
of the assets,  management's  plans, the determination of the useful life of the
assets and  technology  change in the industry  could  significantly  change the
calculation  of the fair  value  or  recoverable  amount  of the  asset  and the
resulting  impairment  loss,  which  could  significantly  affect the results of
operations.

Liquidity and Capital Resources

CE Casecnan  financed a portion of the costs of the Casecnan Project through the
issuance of $125.0 million of its 11.45% Senior Secured Series A Notes due 2005,
$171.5  million of its 11.95% Senior  Secured  Series B Bonds due 2010 and $75.0
million  of its  Senior  Secured  Floating  Rate  Notes  due 2002  (Securities),
pursuant to an indenture  (Trust  Indenture) dated November 27, 1995, as amended
to date.

The  Securities  are senior debt of the Company and are secured by an assignment
of all revenues  that will be received from the Casecnan  Project,  a collateral
assignment  of all  material  contracts,  a lien on any  accounts  and  funds on
deposit  under a Deposit  and  Disbursement  Agreement,  a pledge of 100% of the
capital  stock  of the  Company  and a lien on all  other  material  assets  and
property interests of the Company.  The Securities rank pari passu with and will
share the collateral on a pro rata basis with other senior secured debt, if any.

The  Securities  are  subject  to  certain  optional  and  mandatory  redemption
provisions as defined in the Trust Indenture.  The Securities  contain customary
events of default and restrictive covenants.

CE Casecnan has received  $51.3  million from its parent,  CE Casecnan  Ltd. and
issued unsecured  subordinated notes payable,  the proceeds from which were used
primarily  to finance the  interest  and  principal  payments  for the notes and
bonds.

The Company may from time to time seek to retire its  outstanding  debt  through
cash purchases and/or exchanges for equity securities, in open market purchases,
privately negotiated  transactions or otherwise.  Such repurchases or exchanges,
if any, will depend on prevailing  market  conditions,  the Company's  liquidity
requirements,  contractual  restrictions and other factors. The amounts involved
may be material.

As of December 31, 2001,  the Company also  received  $6.0 million of liquidated
damages from demands made on demand  guarantees  posted by Commerzbank on behalf
of the Contractor.

The cash flow from  operations  for the six months  ended June 30, 2002 is $13.7
million. The majority of the cash flow from operations came from the collections
of water  delivery fees and guaranteed  energy fees of $37.7 million,  partially
offset by interest payments on the Securities.

The Company expects to spend $2.7 million for capital expenditures for 2002.

<PAGE>

Due to the  combined  effect of the  delay in the  Project  entering  commercial
operation,  the failure to receive delay liquidated  damages from the Contractor
and NIA's  failure to pay the tax  reimbursement  portion of the water  delivery
fee,  the  Company's  ability to make  principal  and  interest  payments on the
Securities on November 15, 2002 will be contingent on rainfall through September
being at or near the levels expected by the hydrology model and on receiving the
resultant excess energy delivery fees.

Construction contract arbitration

On May 7, 1997, the Company  entered into a fixed-price,  date certain,  turnkey
engineering,  procurement and construction contract to complete the construction
of the Casecnan Project (Construction Contract). The work under the Construction
Contract was  conducted  by a  consortium  consisting  of  Cooperativa  Muratori
Cementisti  CMC di Ravenna and Impresa  Pizzarotti & C. Spa.,  working  together
with  Siemens  A.G.,  Sulzer  Hydro  Ltd.,  Black &  Veatch  and  Colenco  Power
Engineering Ltd. (collectively, the Contractor).

On  November  20,  1999,  the  Construction  Contract  was amended to extend the
Guaranteed  Substantial  Completion  Date for the Casecnan  Project to March 31,
2001. This amendment was approved by the lenders' independent engineer under the
Trust  Indenture.  In January 2001, the Company  received a new working schedule
from the Contractor  that showed a completion date of August 31, 2001. The delay
in completion was  attributable  in part to the collapse in December 2000 of the
Casecnan  Project's  partially  completed  vertical  surge shaft and the need to
drill a replacement surge shaft.

Upon the receipt of the working  schedule,  the Company sought and obtained from
the lender's independent  engineer approval for a revised construction  schedule
under the Trust Indenture. In connection with the revised schedule, the ultimate
parent  company of CE Casecnan  agreed to make  available up to $11.6 million of
additional  funds under certain  conditions  pursuant to a  Shareholder  Support
Letter dated February 8, 2001 (Shareholder  Support Letter). The ultimate parent
company  has fully  satisfied  its  obligations  under the  Shareholder  Support
Letter.

The  receipt  of  the  new  working  schedule  did  not  change  the  Guaranteed
Substantial  Completion Date under the Construction Contract, and the Contractor
was still  contractually  obligated  either to complete the Casecnan  Project by
March 31, 2001 or to pay liquidated  damages for the delay in completion.  As of
March  31,  2002,  the  Company  has  received  approximately  $6.0  million  of
liquidated  damages  from  demands  made  on the  demand  guarantees  posted  by
Commerzbank on behalf of the Contractor.

On February 12, 2001, the Contractor  filed a Request for  Arbitration  with the
International  Chamber  of  Commerce  seeking  an  extension  of the  Guaranteed
Substantial  Completion Date by up to 153 days through August 31, 2001 resulting
from various alleged force majeure  events.  In its March 20, 2001 Supplement to
Request for  Arbitration,  the Contractor also sought  compensation  for alleged
additional  costs of  approximately  $4.0  million it incurred  from the claimed
force majeure events to the extent it is unable to recover from its insurer.  On

<PAGE>

April 20, 2001, the Contractor filed a further  supplement seeking an additional
compensation  for damages of  approximately  $62.0 million for the alleged force
majeure  event (and  geologic  conditions)  related to the collapse of the surge
shaft. The Contractor has alleged that the circumstances surrounding the placing
of the Casecnan Project into commercial  operation on December 11, 2001 amounted
to a  rescission  of the  Construction  Contract  and  has  filed  a  claim  for
unspecified  quantum meruit damages.  CE Casecnan  believes all such allegations
and claims are  without  merit and is  vigorously  contesting  the  Contractor's
claims. The arbitration is being conducted applying New York law and pursuant to
the rules of the International Chamber of Commerce.  Although the outcome of the
arbitration,  as with any  litigious  proceeding,  is difficult  to assess,  the
Company believes it will prevail and receive  additional  liquidated  damages in
the arbitration.

On June 25, 2001, the arbitration tribunal temporarily enjoined CE Casecnan from
making  calls on the demand  guaranty  posted by Banca di Roma in support of the
Contractor's  obligations to CE Casecnan for delay liquidated  damages. On April
26, 2002, CE Casecnan and the Contractor  mutually  agreed that no demands would
be made on the Banca di Roma demand  guaranty  except pursuant to an arbitration
award.  Hearings on the force majeure  claims were held in London from July 2 to
14, 2001, and hearings on the  Contractor's  April 20, 2001 supplement were held
from September 24 to October 3, 2001. Further hearings were held from January 21
to February 1, 2002 and additional hearings were held from March 14 to 19, 2002.
The Company is awaiting the arbitration tribunal's ruling.

Shareholder Agreement litigation

The  Casecnan  Project  commenced  commercial  operations  on December 11, 2001.
Pursuant  to  the  share  ownership  adjustment  mechanism  in  the  Shareholder
Agreement,  which is based upon pro-forma financial  projections of the Casecnan
Project prepared following  commencement of commercial  operations,  MidAmerican
Energy  Holdings  Company  (MidAmerican),  through  its  wholly  owned  indirect
subsidiary  CE Casecnan  Ltd.,  has advised the minority  shareholder  LaPrairie
Group  Contractors  (International)  Ltd.  (LPG)  that  MidAmerican's  ownership
interest in the Company  will  increase  to 100%.  On July 8, 2002,  LPG filed a
complaint in the Superior Court of the State of  California,  City and County of
San Francisco against, inter alia, CE Casecnan Ltd. and MidAmerican. The Company
is not  named as a  defendant.  In the  complaint,  LPG seeks  compensatory  and
punitive damages for alleged  breaches of the Shareholder  Agreement and alleged
breaches of fiduciary  duties allegedly owed by MidAmerican and CE Casecnan Ltd.
to LPG. The complaint  also seeks  injunctive  relief against all the defendants
and a declaratory  judgment that LPG is entitled to maintain its 15% interest in
the  Company.  The Company does not expect any  material  financial  impact as a
result of this litigation.

Project transmission line
<PAGE>

Under the Project Agreement, if NIA is able to accept delivery of water into the
Pantabangan  Reservoir and NPC has completed the Project's related  transmission
line,  the  Company is liable to pay NIA $5,500 per day for each day of delay in
completion of the Casecnan  Project beyond July 27, 2000,  increasing to $13,500
per day for each day of  delay in  completion  beyond  November  27,  2000.  The
Project transmission line was completed on August 13, 2001 and NIA has completed
the installation and testing of the Project's metering  equipment.  Accordingly,
the Company  has accrued  $1.6  million for  liquidated  damages as of March 31,
2002,  payable  to NIA for 120  days of  delay  and  this  was  shown as part of
accounts payable and accrued expenses in the balance sheets.

Concentration of risk

NIA's payments under the Project Agreement will be substantially  denominated in
United  States  Dollars  and are  expected  to be the  Company's  sole source of
operating  revenues.  Because of the  Company's  dependence on NIA, any material
failure of NIA to fulfill its  obligations  under the Project  Agreement and any
material  failure of the Republic of the  Philippines to fulfill its obligations
under the Performance  Undertaking would significantly impair the ability of the
Company to meet its existing and future obligations.  No shareholders,  partners
or affiliates of the Company, including MidAmerican, and no directors,  officers
or employees  of the Company will  guarantee or be in any way liable for payment
of the Company's obligations.  As a result, payment of the Company's obligations
depends upon the availability of sufficient revenues from the Company's business
after the payment of operating expenses.

Regulatory environment

The Philippine  Congress has passed the Electric  Power  Industry  Reform Act of
2001 which is aimed at  restructuring  the power industry,  privatization of the
NPC and  introduction of a competitive  electricity  market,  among others.  The
passage of the bill may have an impact on the Company's  future  operations  and
the  industry  as a whole,  the  effect  of which  is not yet  determinable  and
estimable.

In connection with an interagency  review of approximately 40 independent  power
project  contracts  in the  Philippines,  in  July  2002  the  Casecnan  Project
(together with four other  projects) has reportedly  been  identified as raising
legal  and  financial   questions  and  with  those  other  contracts  has  been
prioritized  for  renegotiation.  No  written  report has yet been  issued  with
respect to the interagency  review,  and the timing and nature of steps, if any,
that  the  Philippine  Government  may  take  in  this  regard  are  not  known.
Accordingly,  it is not known what, if any, impact the government's  review will
have on the operations of the Company.

<PAGE>

Company  representatives,  together with certain  current and former  government
officials,  also have been  requested  to appear,  and have  appeared,  before a
Philippine Senate committee which has raised questions and made allegations with
respect to the  Project's  tariff  structure  and  implementation.  The  Company
expects that these hearings will continue, although their exact scope and nature
is  difficult  to assess.  The Company has and intends to continue to respond to
such  questions and to  vigorously  defend the Project  against any  allegations
which may be made. The Company believes the allegations made with respect to the
Project to be without  merit.  To the extent  disputes  arise  under the Project
Agreement  with  respect  to the  Company's  obligations,  rights  and  remedies
thereunder,  such disputes will be determined by international  arbitration in a
neutral  forum  conducted  in  accordance  with the  rules of the  International
Chamber of Commerce.

Safe Harbor Statement Under the Private Securities Litigation Reform Act

Certain information included in this report contains forward-looking  statements
made pursuant to the Private  Securities  Litigation  Reform Act of 1995 (Reform
Act). Such statements are based on current  expectations and involve a number of
known and unknown risks and  uncertainties  that could cause the actual  results
and  performance of the Company to differ  materially  from any expected  future
results or performance, expressed or implied, by the forward-looking statements.
In connection with the safe harbor provisions of the Reform Act, the Company has
identified   important  factors  that  could  cause  actual  results  to  differ
materially from such expectations,  including development uncertainty, operating
uncertainty,  acquisition uncertainty,  uncertainties relating to doing business
outside  of  the  United   States,   uncertainties   relating  to  domestic  and
international economic and political conditions and uncertainties  regarding the
impact of regulations,  changes in government policy,  industry deregulation and
competition  as discussed in the Company's  Securities  and Exchange  Commission
filings,  including the Company's Annual Report on Form 10-K for the fiscal year
ended  December  31,  2001.  The  Company  assumes no  responsibility  to update
forward-looking information contained herein.



<PAGE>


CE CASECNAN WATER AND ENERGY COMPANY, INC.



PART II - OTHER INFORMATION


Item 1 - Legal Proceedings.
------
     See Note 5 to the financial statements.

Item 2 - Changes in Securities.
------
     Not applicable.

Item 3 - Defaults on Senior Securities.
------
     Not applicable.

Item 4 - Submission of Matters to a Vote of Security Holders.
------
     Not applicable.

Item 5 - Other Information.
------
     Not applicable.

Item 6 - Exhibits and Reports on Form 8-K.
------
     (a) Exhibits:

         None.

     (b) Reports on Form 8-K:

         None.

<PAGE>


         SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                    CE CASECNAN WATER AND ENERGY COMPANY, INC.


Date: August 14, 2002         /s/  Patrick J. Goodman
                              --------------------------------------------
                              Patrick J. Goodman
                              Senior Vice President & Chief Financial Officer