UNITED STATES
                       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 March 31, 2004

                          Commission File No. 001-12995

                   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              Not Applicable
        ---------------------------------                 --------------
        Makati, Metro Manila, Philippines                   (Zip Code)
    (Address of principal executive offices)

                                011 63 2 892-0276
                                -----------------
              (Registrant's telephone number, including area code)

         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 whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x]

As of March 31, 2004, 767,162 shares of common stock were outstanding.


<PAGE>


                                TABLE OF CONTENTS
                                -----------------

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements                                                  3
Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                          10
Item 3.  Quantitative and Qualitative Disclosures About Market Risk           13
Item 4.  Controls and Procedures                                              13

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                    14
Item 2.  Changes in Securities, Use of Proceeds and Issuer Purchases
           of Equity Securities                                               14
Item 3   Defaults Upon Senior Securities                                      14
Item 4.  Submission of Matters to a Vote of Security Holders                  14
Item 5.  Other Information                                                    14
Item 6.  Exhibits and Reports on Form 8-K                                     14
SIGNATURES                                                                    15
EXHIBIT INDEX                                                                 16

                                      -2-
<PAGE>


PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.



INDEPENDENT ACCOUNTANTS' REPORT


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

We have reviewed the accompanying  balance sheet of CE Casecnan Water and Energy
Company,  Inc. (the "Company") as of March 31, 2004, and the related  statements
of operations and of cash flows for each of the three-month  periods ended March
31, 2004 and 2003. These interim 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 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, 2003, and
the related  statements of operations,  changes in  stockholders'  equity and of
cash  flows for the year then ended (not  presented  herein),  and in our report
dated February 9, 2004, we expressed an unqualified  opinion on those  financial
statements.  In our  opinion,  the  information  set  forth in the  accompanying
balance sheet as of December 31, 2003, is fairly stated in all material respects
in relation to the balance sheet from which it has been derived.

/s/ Joaquin Cunanan & Co.

JOAQUIN CUNANAN & CO.
A PricewaterhouseCoopers Member Firm
Makati City, Philippines
April 28, 2004

                                      -3-
<PAGE>


                   CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                 BALANCE SHEETS
            (Amounts in thousands of U.S. Dollars, except share data)

<TABLE>
<CAPTION>
                                                                                          AS OF
                                                                                 --------------------------
                                                                                   MARCH 31,   DECEMBER 31,
                                                                                     2004        2003
                                                                                 ------------  ------------
                                                                                  (UNAUDITED)
                                                          ASSETS
<S>                                                                                <C>         <C>
Current assets:
  Cash and cash equivalents ...................................................    $  2,335    $  4,513
  Trade receivable, net .......................................................      17,337      16,451
  Note receivable (Note 2) ....................................................           -      97,000
  Accrued interest and other receivables ......................................       5,458       8,229
  Prepaid insurance and other current assets ..................................       4,863       4,685
                                                                                   --------    --------
    Total current assets ......................................................      29,993     130,878
                                                                                   --------    --------
Restricted cash and investments ...............................................      93,790      18,121
Bond issue costs, net .........................................................       3,566       3,861
Property, plant and equipment, net ............................................     401,791     407,082
Deferred income tax ...........................................................       5,371       5,371
                                                                                   --------    --------
TOTAL ASSETS ..................................................................    $534,511    $565,313
                                                                                   ========    ========

                                           LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable ............................................................    $  7,741    $  7,395
  Accrued interest ............................................................      15,035       7,368
  Dividends payable ...........................................................       7,950           -
  Accrued liquidated damages ..................................................       3,800       3,800
  Other accrued expenses ......................................................       1,702       1,702
  Payable to affiliates .......................................................      34,619      34,739
  Current portion of long-term debt ...........................................      49,360      49,360
                                                                                   --------    --------
    Total current liabilities .................................................     120,207     104,364
                                                                                   --------    --------

Notes payable .................................................................      51,263      51,263
Deferred revenue ..............................................................       2,066         902
Long-term debt, net of current portion ........................................     197,098     197,098
                                                                                   --------    --------
  Total liabilities ...........................................................     370,634     353,627
                                                                                   --------    --------

Commitments and contingencies (Note 4)

Stockholders' equity:
Capital stock - authorized 2,148,000 common shares, one Philippine peso
    ($0.038) par value; 767,162 shares issued and outstanding .................          29          29
Additional paid-in capital ....................................................     123,807     123,807
Retained earnings (Note 5) ....................................................      40,041      87,850
                                                                                   --------    --------
  Total stockholders' equity ..................................................     163,877     211,686
                                                                                   --------    --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....................................    $534,511    $565,313
                                                                                   ========    ========
</TABLE>

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

                                      -4-
<PAGE>

                   CE CASECNAN WATER AND ENERGY COMPANY, INC.
                            STATEMENTS OF OPERATIONS
                     (Amounts in thousands of U.S. Dollars)


                                                     THREE MONTHS
                                                    ENDED MARCH 31,
                                                 ----------------------
                                                   2004         2003
                                                 --------     ---------
                                                      (UNAUDITED)

REVENUE:
  Lease rental and service contract .........    $ 19,915     $ 31,499
                                                 --------     --------
OPERATING EXPENSES:
  Depreciation ..............................       5,713        5,673
  Plant operations ..........................       1,981        3,176
  Doubtful accounts expense .................           -        4,067
                                                 --------     --------
    Total operating expenses ................       7,694       12,916
                                                 --------     --------
OPERATING INCOME ............................      12,221       18,583
                                                 --------     --------

OTHER INCOME (EXPENSE):
  Interest expense ..........................      (7,560)     (10,153)
  Interest income ...........................         650           63
  Other .....................................        (120)          15
                                                 --------     --------
    Total other expense, net ................      (7,030)     (10,075)
                                                 --------     --------

NET INCOME ..................................    $  5,191     $  8,508
                                                 ========     ========


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

                                      -5-
<PAGE>

                   CE CASECNAN WATER AND ENERGY COMPANY, INC.
                            STATEMENTS OF CASH FLOWS
                     (Amounts in thousands of U.S. Dollars)

<TABLE>
<CAPTION>
                                                                                      THREE MONTHS
                                                                                     ENDED MARCH 31,
                                                                                  ----------------------
                                                                                    2004          2003
                                                                                  ---------     --------
                                                                                       (UNAUDITED)
<S>                                                                               <C>           <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income .................................................................    $   5,191     $  8,508
  Adjustments to reconcile net income to cash flows from operating activities:
    Depreciation .............................................................        5,713        5,673
    Amortization of bond issue costs .........................................          295          339
      Changes in other items:
      Trade receivable, net ..................................................         (886)       3,278
      Accrued interest and other receivables .................................        2,771       (1,505)
      Prepaid insurance and other current assets .............................         (178)         532
      Accounts payable .......................................................          346          451
      Accrued interest .......................................................        7,667        8,875
      Deferred revenue .......................................................        1,164            -
                                                                                  ---------     --------
        Net cash flows from operating activities .............................       22,083       26,151
                                                                                  ---------     --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property, plant and equipment .................................         (422)      (1,587)
  Collection of ROP note (Note 2) ............................................       97,000            -
  Other assets ...............................................................            -        3,070
                                                                                  ---------     --------
    Net cash flows from investing activities .................................       96,578        1,483
                                                                                  ---------     --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in restricted cash and investments ................................      (75,669)     (24,980)
  Increase (decrease) in payable to affiliates ...............................         (120)         681
  Dividend distributions .....................................................      (45,050)           -
                                                                                  ---------     --------
    Net cash flows from financing activities .................................     (120,839)     (24,299)
                                                                                  ---------     --------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS .........................       (2,178)       3,335
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD .............................        4,513          705
                                                                                  ---------     --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ...................................    $   2,335     $  4,040
                                                                                  =========     ========

SUPPLEMENTAL DISCLOSURE:
  Interest paid ..............................................................    $     403     $      -
                                                                                  =========     ========
  Dividends declared but not paid ............................................    $   7,950     $      -
                                                                                  =========     ========
</TABLE>

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

                                      -6-

<PAGE>

                   CE CASECNAN WATER AND ENERGY COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.  GENERAL

The accompanying unaudited interim financial statements have been prepared by CE
Casecnan  Water and Energy  Company,  Inc.  ("CE  Casecnan"  or the  "Company"),
without  audit,  pursuant  to the rules and  regulations  of the  United  States
Securities  and Exchange  Commission  for interim  financial  reporting.  In the
opinion of the management of the Company,  the accompanying  unaudited financial
statements  contain all adjustments  (consisting of normal  recurring  accruals)
necessary to present fairly the financial position as of March 31, 2004, and the
results of operations and of cash flows for the three-month  periods ended March
31, 2004 and 2003.  The results of operations for the  three-month  period ended
March 31, 2004 are not necessarily  indicative of the results to be expected for
the full year.

The  unaudited  financial  statements  should  be read in  conjunction  with the
financial  statements  included in the Company's  Annual Report on Form 10-K for
the year ended  December 31, 2003.  In  particular,  the  Company's  significant
accounting  policies and  practices  are  presented  in Note 2 to the  financial
statements included therein.

The Company's  operations consist of one reportable segment,  the water delivery
and electricity generation industry.

2.  NIA ARBITRATION SETTLEMENT


On October 15, 2003, CE Casecnan Water and Energy Company,  Inc. ("CE Casecnan")
closed a transaction settling the CE Casecnan NIA Arbitration,  which arose from
a  Statement  of Claim made by CE  Casecnan,  on August 19,  2002,  against  the
Republic of the Philippines ("ROP") National Irrigation  Administration ("NIA").
As a result of the agreement, CE Casecnan recorded $31.9 million of other income
and $24.4  million of  associated  income taxes in 2003.  Under the terms of the
settlement,  CE Casecnan  entered into an agreement  with NIA which provided for
the dismissal with prejudice of all claims by CE Casecnan and  counterclaims  by
NIA in the NIA Arbitration.  In connection with the settlement, NIA delivered to
CE Casecnan a ROP $97.0  million  8.375% Note due 2013 (the "ROP  Note"),  which
contained a put provision  granting CE Casecnan the right to put the ROP Note to
the ROP for a price of par plus accrued interest for a 30-day period  commencing
on January 14, 2004. The ROP Note is included in the other current assets on the
December 31, 2003 consolidated balance sheet.

On January 14, 2004, CE Casecnan  exercised its right to put the ROP Note to the
ROP and, in  accordance  with the terms of the put, CE Casecnan  received  $99.2
million  (representing  $97.0 million par value plus accrued  interest) from the
ROP on January 21, 2004.

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 $34.6 million and $34.7 million at March 31, 2004 and
December 31, 2003,  respectively.  Costs incurred by the Company in transactions
with  related  parties  amounted  to  $0.3  million  and  $0.6  million  for the
three-month periods ended March 31, 2004 and 2003, respectively.

As of March 31, 2004 and December 31, 2003,  the Company has  outstanding  $51.3
million  of  unsecured  subordinated  notes  payable  to CE  Casecnan  Ltd.,  an
affiliate,  due November 15, 2005.  The  unsecured  notes bear interest at LIBOR
plus two percent (2%) which is payable every March 15 and November 15.  Interest
expense on the  unsecured  notes was $0.4  million and $0.4  million  during the
three-month  periods  ended March 31, 2004 and 2003,  respectively.  Any overdue
payment of principal or interest  payable in the notes shall increase the annual
interest by two percent (2%). At March 31, 2004, the effective  interest rate on
the notes was 3.27%.  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 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  Depository,  any

                                      -7-
<PAGE>

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.

4.  COMMITMENTS AND CONTINGENCIES

Construction Contract Arbitration
---------------------------------

The Casecnan Project was initially being constructed  pursuant to a fixed-price,
date-certain,  turnkey  construction  contract (the "Hanbo Contract") on a joint
and several  basis by Hanbo  Corporation  ("Hanbo")  and Hanbo  Engineering  and
Construction Co., Ltd. ("HECC"), both of which are South Korean corporations. As
of May 7, 1997,  the Company  terminated  the Hanbo  Contract due to defaults by
Hanbo and HECC including the insolvency of both companies. On the same date, the
Company  entered into a new  fixed-price,  date  certain,  turnkey  engineering,
procurement  and  construction  contract to  complete  the  construction  of the
Casecnan Project (the  "Replacement  Contract").  The work under the Replacement
Contract was  conducted  by a  consortium  consisting  of  Cooperativa  Muratori
Cementisti CMC di Ravenna and Impresa  Pizzarotti & C. Spa.  (collectively,  the
"Contractor"),  working  together with Siemens A.G.,  Sulzer Hydro Ltd., Black &
Veatch and Colenco Power Engineering Ltd.
On  November  20,  1999,  the  Replacement  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.

On February 12, 2001, the Contractor  filed a Request for  Arbitration  with the
International  Chamber of Commerce  ("ICC") seeking schedule relief of 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 million it incurred from the claimed force majeure events.  On
April 20, 2001, the Contractor filed a further  supplement seeking an additional
compensation  for damages of  approximately  $62  million for the alleged  force
majeure  event (and  geologic  conditions)  related to the collapse of the surge
shaft. The Contractor alleged that the circumstances  surrounding the placing of
the Casecnan  Project into  commercial  operation in December 2001 amounted to a
repudiation  of the  Replacement  Contract  and  filed a claim  for  unspecified
quantum meruit damages,  and further alleged that the delay  liquidated  damages
clause which  provided for payments of $125,000 per day for each day of delay in
completion of the Casecnan  Project for which the Contractor was responsible was
unenforceable.

Hearings were held in connection with this  arbitration in July 2001,  September
2001,  January 2002, March 2002,  November 2002,  January 2003 and July 2003. As
part of those hearings,  on June 25, 2001, the arbitration  tribunal temporarily
enjoined CE Casecnan from making calls on the demand  guarantee  posted by Banca
di Roma in support of the  Contractor's  obligations  to CE  Casecnan  for delay
liquidated damages. As a result of the continuing nature of that injunction,  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. In November 2002, CE Casecnan  received  approximately  $6.0
million of liquidated  damages from demands made on the demand guarantees posted
by Commerzbank on behalf of the  Contractor.  The $6.0 million was recorded as a
reduction in construction costs in 2002. On November 7, 2002, the ICC issued the
arbitration  tribunal's  partial  award with respect to the  Contractor's  force
majeure and  geologic  conditions  claims.  The  arbitration  panel  awarded the
Contractor  18 days of  schedule  relief in the  aggregate  for all of the force
majeure events and awarded the Contractor  $3.8 million with respect to the cost
of the collapsed  surge shaft.  The $3.8 million is shown as part of the accrued
liquidated  damages  balance at March 31, 2004 and December 31, 2003. All of the
Contractor's other claims with respect to force majeure and geologic  conditions
were denied.

On April 7, 2004,  the Company  entered  into an agreement  with the  Contractor
settling  the  ICC  arbitration.  Pursuant  to  the  settlement  agreement,  the
Contractor  paid $19.1  million to CE Casecnan on April 14, 2004 (which  payment
was in addition to the  approximately  $6.0 million received in November 2002 by
CE Casecnan from demands made on the demand  guarantees  posted by Commerzbank),
and the  Contractor  and CE  Casecnan  executed  mutual  releases  and agreed to
dismiss the arbitration. Also pursuant to the terms of the settlement agreement,
CE Casecnan was required to, and has,  deposited $0.2 million into a third-party
escrow  pursuant to which the amount so deposited will be released  either to CE
Casecnan, if certain issues relating to alleged outstanding  Philippine taxes on
construction  equipment are resolved with the relevant  Philippine  governmental
authorities by September 6, 2004, or to the  Contractor,  if such issues are not
resolved by such date. A total of $24.4 million (the $19.1 million receipt,  net
of $0.2 million placed in escrow,  along with the $3.8

                                      -8-
<PAGE>

million  amount  originally  recorded  for  liquidated  damages and $1.7 million
accrual  for the  unpaid  portion of the EPC  contract)  will be  recorded  as a
reduction of construction costs in the second quarter of 2004.

Stockholder Litigation
----------------------

Pursuant  to the  share  ownership  adjustment  mechanism  in  the  CE  Casecnan
stockholder  agreement,  which is based upon pro forma financial  projections of
the Casecnan Project prepared following  commencement of commercial  operations,
in February 2002, MidAmerican Energy Holdings Company's ("MidAmerican") indirect
wholly owned  subsidiary CE Casecnan Ltd.,  advised the minority  stockholder of
the Company,  LaPrairie Group Contractors  (International)  Ltd.  ("LPG"),  that
MidAmerican's  indirect  ownership interest in CE Casecnan had increased to 100%
effective from commencement of commercial operations. In April 2002, CE Casecnan
Ltd. and LPG entered into a status quo  agreement  pursuant to which CE Casecnan
Ltd.  agreed not to take any action to exercise  control over or transfer  LPG's
shares in the  Company.  On July 8, 2002,  LPG filed a complaint in the Superior
Court of the State of  California,  City and  County of San  Francisco  against,
among others,  CE Casecnan Ltd. and  MidAmerican.  In the  complaint,  LPG seeks
compensatory  and  punitive  damages  for alleged  breaches  of the  stockholder
agreement and alleged breaches of fiduciary duties allegedly owed by CE Casecnan
Ltd. and MidAmerican to LPG. The complaint also seeks injunctive  relief against
all defendants  and a declaratory  judgment that LPG is entitled to maintain its
15% interest in CE Casecnan.  On January 21, 2004, CE Casecnan Ltd., LPG and the
Company entered into a second status quo agreement pursuant to which the parties
agreed to set aside certain  distributions  related to the shares subject to the
LPG dispute and CE Casecnan  agreed not to take any further actions with respect
to  such  distributions   without  at  least  15  days'  prior  notice  to  LPG.
Accordingly, 15% of the dividend distributions on January 21, 2004, February 18,
2004, and March 15, 2004 amounting in total to $8.0 million, was set aside in an
unsecured  account  of the  Company  and is shown as  dividends  payable  in the
balance  sheet.  The  initial  phase in the case has been set for  trial in May,
2004.

In February  2003, San Lorenzo Ruiz Builders and  Developers  Group,  Inc. ("San
Lorenzo"),  an original  shareholder  substantially  all of whose  shares in the
Company were  purchased by  MidAmerican  in 1998,  threatened to initiate  legal
action in the  Philippines in connection  with certain  aspects of its option to
repurchase such shares. The Company believes that San Lorenzo has no valid basis
for any claim and, if named as a defendant  in any action that may be  commenced
by San Lorenzo, the Company will vigorously defend such action.

Concentration of Risk
---------------------

NIA's  payments of  obligations  under the Project  Agreement are  substantially
denominated  in U.S.  Dollars and are 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 ROP to fulfill its obligations under the Performance  Undertaking
would  significantly  impair the ability of the Company to meet its existing and
future  obligations.  No  stockholders,  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.

5.  STOCKHOLDERS' EQUITY AND RETAINED EARNINGS

The movement in stockholders'  equity and retained  earnings  represents the net
income for the period and dividend distributions in January,  February and March
2004 totaling $53.0 million.

6.  SUBSEQUENT EVENT

On April 19,  2004,  the  Company  declared  a  dividend  distribution  of $24.0
million.  Pursuant to the second status quo  agreement  between CE Casecnan Ltd.
and LPG, 15% of the  distribution  amounting to $3.6 million was set aside in an
unsecured account of the Company.

                                      -9-
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

The following is  management's  discussion  and analysis of certain  significant
factors which have affected the financial condition and results of operations of
CE Casecnan Water and Energy  Company,  Inc. ("CE  Casecnan" or the  "Company"),
during the periods included in the accompanying  statements of operations.  This
discussion should be read in conjunction with the Company's historical financial
statements and the notes to those  statements.  The Company's  actual results in
the future could differ significantly from the historical results.

FORWARD-LOOKING STATEMENTS

From time to time, CE Casecnan may make  forward-looking  statements  within the
meaning of the federal securities laws that involve  judgments,  assumptions and
other uncertainties beyond the control of the Company or any of its subsidiaries
individually.  These  forward-looking  statements  may  include,  among  others,
statements  concerning  revenue and cost trends,  cost recovery,  cost reduction
strategies and anticipated outcomes, pricing strategies,  changes in the utility
industry,  planned  capital  expenditures,  financing  needs  and  availability,
statements of CE Casecnan's expectations,  beliefs, future plans and strategies,
anticipated  events or trends and similar comments  concerning  matters that are
not historical  facts.  These types of  forward-looking  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 Private  Securities  Litigation Reform Act of 1995, CE
Casecnan has  identified  important  factors that could cause actual  results to
differ materially from those expectations, including weather effects on revenues
and other  operating  uncertainties,  uncertainties  relating  to  economic  and
political  conditions  and  uncertainties  regarding the impact of  regulations,
changes in government  policy and  competition.  The Company does not assume any
responsibility to update forward-looking information contained herein.

RESULTS OF OPERATIONS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2004 AND 2003

The following table provides certain  operating data of the Casecnan Project for
the three-month periods ended March 31, 2004 and 2003:

                                                       2004    2003
                                                       ----    ----
        Electricity produced (GWh) ..............      41.0    35.5
        Water delivered (million cubic meters) ..      72.0    56.5

For  accounting  purposes,  the  Project  Agreement  with NIA  contains  both an
operating lease and a service contract, which the Company accounted for pursuant
to  provisions  of  Statement  of  Financial  Accounting   Standards,   No.  13,
"Accounting  for Leases".  However,  pursuant to the  provisions  of the Project
Agreement,  the Company billed to NIA water and energy  delivery fees as follows
(in millions):

                                                           2004     2003
                                                          -------  -------
    Water delivery fees ..............................    $  10.9  $  22.4
    Electricity fees .................................        9.0      9.1
                                                          -------  -------
    Total lease rentals and service contracts revenue.    $  19.9  $  31.5
                                                          =======  =======

Revenue  decreased by $11.6 million to $19.9 million for the three-month  period
ended March 31, 2004 from $31.5 million for the  three-month  period ended March
31,  2003.  The  decrease  in  water  delivery  fees  was  primarily  due to the
elimination of the tax  compensation  portion of the water delivery fee pursuant
to the NIA settlement  (the "NIA  Arbitration  Settlement") on October 15, 2003,
partially  offset by a 7.5% increase in the water  delivery fee rate as a result
of the  contractual  annual  escalation  factor.  Revenues from water  delivery,
guaranteed  energy and excess energy are 55%, 45% and 0%,  respectively,  of the
total revenue for the three-month  period ended March 31, 2004, and 71%, 29% and
0%, respectively, for the three-month period ended March 31, 2003.

Operating  expenses  decreased to $7.7 million for the three-month  period ended
March 31, 2004 from $12.9  million for the  three-month  period  ended March 31,
2003. The three-month  period ended March 31, 2003 included charges for doubtful
accounts and higher legal bills associated with the NIA Arbitration  Settlement.
The  decrease  in plant  operations  expense

                                      -10-
<PAGE>

was caused by lower  property tax expense and legal  expense in 2004 as a result
of the NIA Arbitration  Settlement on October 15, 2003. The decrease in doubtful
accounts is primarily attributable to the NIA Arbitration Settlement.

Interest  expense  decreased  to $7.6 million for the  three-month  period ended
March 31, 2004 from $10.2  million for the  three-month  period  ended March 31,
2003 due to lower  outstanding  debt resulting  from the scheduled  repayment of
debt during the period.

LIQUIDITY AND CAPITAL RESOURCES

CE Casecnan  constructed and operates the Casecnan Project,  which was developed
as an unsolicited proposal under the Philippine  build-operate-transfer  ("BOT")
law, under the terms of the Casecnan Project Agreement (the "Project Agreement")
between  CE  Casecnan  and the  Philippine  National  Irrigation  Administration
("NIA").  Under the Project  Agreement,  CE  Casecnan  developed,  financed  and
constructed  the Casecnan  Project over the  construction  period,  and owns and
operates the Casecnan Project for 20 years (the  "Cooperation  Period").  During
the Cooperation  Period,  NIA is obligated to accept all deliveries of water and
energy,  and so long as the Casecnan Project is physically  capable of operating
and  delivering  in  accordance  with  agreed  levels  set forth in the  Project
Agreement, NIA is obligated to pay CE Casecnan a fixed fee for the delivery of a
threshold volume of water and a fixed fee for the delivery of a threshold amount
of electricity.  In addition,  NIA is obligated to pay a fee for all electricity
delivered in excess of the threshold amount up to a specified amount and will be
obligated to pay a fee for all water delivered in excess of the threshold amount
up to a specified amount beginning after December 25, 2008.

The Republic of the Philippines  ("ROP") has provided a Performance  Undertaking
under which NIA's  obligations under the Project Agreement are guaranteed by the
full faith and credit of the ROP.  The  Project  Agreement  and the  Performance
Undertaking  provide for the  resolution of disputes by binding  arbitration  in
Singapore under international arbitration rules.

NIA's  payments of  obligations  under the Project  Agreement are  substantially
denominated  in U.S.  Dollars and are 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 ROP to fulfill its obligations under the Performance  Undertaking
would  significantly  impair the ability of the Company to meet its existing and
future obligations, including obligations pertaining to its outstanding debt. No
stockholders,  partners or  affiliates  of the  Company,  including  MidAmerican
Energy Holdings Company ("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.

The Company's  cash and cash  equivalents  were $2.3 million and $4.5 million at
March 31, 2004 and December 31, 2003,  respectively.  At December 31, 2003,  the
Company  has an  outstanding  $97.0  million  ROP note  receivable  obtained  in
connection  with  the NIA  Arbitration  Settlement  which  was put to the ROP on
January 14, 2004.

The Company  generated  cash flows from  operations  of $22.1  million and $26.2
million for the three-month periods ended March 31, 2004 and 2003, respectively.
The decrease from 2003 was primarily due to changes in working capital.

The  Company  generated  cash  flows of $96.6  million  and  $1.5  million  from
investing  activities for the three-month periods ended March 31, 2004 and 2003,
respectively.  The increase in cash flow from investing activities was primarily
attributable  to the receipt on January 21, 2004 of cash from the put of the ROP
note received in connection with the NIA Arbitration Settlement.

The Company used $120.8  million and $24.3 million for financing  activities for
the three-month periods ended March 31, 2004 and 2003, respectively.  During the
first  quarter of 2004,  the Company  increased its  restricted  cash related to
obligations for debt service and unpaid dividends declared  obligations by $75.7
million  and  distributed  dividends  out of its cash funds  amounting  to $53.0
million,  $8.0  million  of which was set aside in an  unsecured  account of the
Company and shown as dividends payable in the balance sheet.

                                      -11-

<PAGE>

Construction Contract Arbitration
---------------------------------

The Casecnan Project was initially being constructed  pursuant to a fixed-price,
date-certain,  turnkey  construction  contract (the "Hanbo Contract") on a joint
and several  basis by Hanbo  Corporation  ("Hanbo")  and Hanbo  Engineering  and
Construction Co., Ltd. ("HECC"), both of which are South Korean corporations. As
of May 7, 1997,  the Company  terminated  the Hanbo  Contract due to defaults by
Hanbo and HECC including the insolvency of both companies. On the same date, the
Company  entered into a new  fixed-price,  date  certain,  turnkey  engineering,
procurement  and  construction  contract to  complete  the  construction  of the
Casecnan Project (the  "Replacement  Contract").  The work under the Replacement
Contract was  conducted  by a  consortium  consisting  of  Cooperativa  Muratori
Cementisti-CMC di Ravenna and Impresa Pizzarotti & C. S.p.A. (collectively,  the
"Contractor"),  working  together with Siemens A.G.,  Sulzer Hydro Ltd., Black &
Veatch and Colenco Power Engineering Ltd.

On  November  20,  1999,  the  Replacement  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.

On February 12, 2001, the Contractor  filed a Request for  Arbitration  with the
International  Chamber of Commerce  ("ICC") seeking schedule relief of 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 million it incurred from the claimed force majeure events.  On
April 20, 2001, the Contractor filed a further  supplement seeking an additional
compensation  for damages of  approximately  $62  million for the alleged  force
majeure  event (and  geologic  conditions)  related to the collapse of the surge
shaft. The Contractor alleged that the circumstances  surrounding the placing of
the Casecnan  Project into  commercial  operation in December 2001 amounted to a
repudiation  of the  Replacement  Contract  and  filed a claim  for  unspecified
quantum meruit damages,  and further alleged that the delay  liquidated  damages
clause which  provided for payments of $125,000 per day for each day of delay in
completion of the Casecnan  Project for which the Contractor was responsible was
unenforceable.

Hearings were held in connection with this  arbitration in July 2001,  September
2001,  January 2002, March 2002,  November 2002,  January 2003 and July 2003. As
part of those hearings,  on June 25, 2001, the arbitration  tribunal temporarily
enjoined CE Casecnan from making calls on the demand  guarantee  posted by Banca
di Roma in support of the  Contractor's  obligations  to CE  Casecnan  for delay
liquidated damages. As a result of the continuing nature of that injunction,  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. In November 2002, CE Casecnan  received  approximately  $6.0
million of liquidated  damages from demands made on the demand guarantees posted
by Commerzbank on behalf of the  Contractor.  The $6.0 million was recorded as a
reduction in construction costs in 2002. On November 7, 2002, the ICC issued the
arbitration  tribunal's  partial  award with respect to the  Contractor's  force
majeure and  geologic  conditions  claims.  The  arbitration  panel  awarded the
Contractor  18 days of  schedule  relief in the  aggregate  for all of the force
majeure events and awarded the Contractor  $3.8 million with respect to the cost
of the collapsed  surge shaft.  The $3.8 million is shown as part of the accrued
liquidated  damages  balance at March 31, 2004 and December 31, 2003. All of the
Contractor's other claims with respect to force majeure and geologic  conditions
were denied.

On April 7, 2004,  the Company  entered  into an agreement  with the  Contractor
settling  the  ICC  arbitration.  Pursuant  to  the  settlement  agreement,  the
Contractor  paid $19.1  million to CE Casecnan on April 14, 2004 (which  payment
was in addition to the  approximately  $6.0 million received in November 2002 by
CE Casecnan from demands made on the demand  guarantees  posted by Commerzbank),
and the  Contractor  and CE  Casecnan  executed  mutual  releases  and agreed to
dismiss the arbitration. Also pursuant to the terms of the settlement agreement,
CE Casecnan was required to, and has,  deposited $0.2 million into a third-party
escrow  pursuant to which the amount so deposited will be released  either to CE
Casecnan, if certain issues relating to alleged outstanding  Philippine taxes on
construction  equipment are resolved with the relevant  Philippine  governmental
authorities by September 6, 2004, or to the  Contractor,  if such issues are not
resolved by such date. A total of $24.4 million (the $19.1 million receipt,  net
of $0.2 million placed in escrow,  along with the $3.8 million amount originally
recorded for liquidated  damages and $1.7 million accrual for the unpaid portion
of the EPC contract)  will be recorded as a reduction of  construction  costs in
the second quarter of 2004.

                                      -12-

<PAGE>

Stockholder Litigation
----------------------

Pursuant  to the  share  ownership  adjustment  mechanism  in  the  CE  Casecnan
stockholder  agreement,  which is based upon pro forma financial  projections of
the Casecnan Project prepared following  commencement of commercial  operations,
in February 2002, MidAmerican Energy Holdings Company's ("MidAmerican") indirect
wholly owned  subsidiary CE Casecnan Ltd.,  advised the minority  stockholder of
the Company,  LaPrairie Group Contractors  (International)  Ltd.  ("LPG"),  that
MidAmerican's  indirect  ownership interest in CE Casecnan had increased to 100%
effective from commencement of commercial operations. In April 2002, CE Casecnan
Ltd. and LPG entered into a status quo  agreement  pursuant to which CE Casecnan
Ltd.  agreed not to take any action to exercise  control over or transfer  LPG's
shares in the  Company.  On July 8, 2002,  LPG filed a complaint in the Superior
Court of the State of  California,  City and  County of San  Francisco  against,
among others,  CE Casecnan Ltd. and  MidAmerican.  In the  complaint,  LPG seeks
compensatory  and  punitive  damages  for alleged  breaches  of the  stockholder
agreement and alleged breaches of fiduciary duties allegedly owed by CE Casecnan
Ltd. and MidAmerican to LPG. The complaint also seeks injunctive  relief against
all defendants  and a declaratory  judgment that LPG is entitled to maintain its
15% interest in CE Casecnan.  On January 21, 2004, CE Casecnan Ltd., LPG and the
Company entered into a second status quo agreement pursuant to which the parties
agreed to set aside certain  distributions  related to the shares subject to the
LPG dispute and CE Casecnan  agreed not to take any further actions with respect
to  such  distributions   without  at  least  15  days'  prior  notice  to  LPG.
Accordingly,  15% of the dividend distribution on January 21, 2004, February 18,
2004, and March 15, 2004,  amounting in total to $8.0 million,  was set aside in
an  unsecured  account of the Company and is shown as  dividends  payable in the
balance  sheet.  The  threshold  issues  in the case  have been set for trial in
mid-May, 2004.

In February  2003, San Lorenzo Ruiz Builders and  Developers  Group,  Inc. ("San
Lorenzo"),  an original  shareholder  substantially  all of whose  shares in the
Company were  purchased by  MidAmerican  in 1998,  threatened to initiate  legal
action in the  Philippines in connection  with certain  aspects of its option to
repurchase such shares. The Company believes that San Lorenzo has no valid basis
for any claim and, if named as a defendant  in any action that may be  commenced
by San Lorenzo, will vigorously defend such action.

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 Company's  Financial  Statements  included in its Annual Report on form 10-K
for the year ended  December  31,  2003  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 and deferred  income taxes.  Actual results could differ from
these estimates.

For additional  discussion of the Company's critical  accounting  policies,  see
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  included in the  Company's  Annual Report on Form 10-K for the year
ended December 31, 2003.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

For  quantitative  and  qualitative  disclosures  about market risk affecting CE
Casecnan,  see Item 7A "Qualitative  and Quantitative  Disclosures  About Market
Risk" of CE Casecnan's  Annual  Report on Form 10-K for the year ended  December
31, 2003. CE Casecnan's exposure to market risk has not changed materially since
December 31, 2003.

ITEM 4.  CONTROLS AND PROCEDURES.

An evaluation was performed under the supervision and with the  participation of
the Company's  management,  including  the  respective  persons  acting as chief
executive  officer and chief financial  officer,  regarding the effectiveness of
the design and operation of the Company's disclosure controls and procedures (as
defined in Rule 13a-15(e)  promulgated  under the Securities and Exchange Act of
1934, as amended) as of March 31, 2004. Based on that evaluation,  the Company's
management,  including the respective  persons acting as chief executive officer
and chief financial officer,  concluded that the Company's  disclosure  controls
and procedures  were  effective.  There have been no significant  changes in the
Company's internal controls or in other factors that could significantly  affect
internal controls.

                                      -13-
<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

See Note 4 to the financial statements and discussion in management's discussion
and analysis.

ITEM 2.  CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER  PURCHASES OF EQUITY
         SECURITIES.

Not applicable.

ITEM 3.  DEFAULTS UPON 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:

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

(b)  REPORTS ON FORM 8-K:

     On  January  21,  2004,  CE  Casecnan  filed a  Current  Report on Form 8-K
     disclosing  the timely  receipt of payment of the ROP Note which was put to
     the ROP on January 14, 2004.


                                      -14-
<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.
                   ------------------------------------------
                                  (Registrant)





Date:  April 28, 2004                   /s/ Patrick J. Goodman
                                        ----------------------
                                          Patrick J. Goodman
                              Senior Vice President and Chief Financial Officer


                                      -15-
<PAGE>


                                  EXHIBIT INDEX

Exhibit No.
-----------

31.1     Chief  Executive  Officer's  Certificate  Pursuant  to  Section  302
         of the Sarbanes-Oxley Act of 2002.

31.2     Chief  Financial  Officer's  Certificate  Pursuant  to  Section  302
         of the Sarbanes-Oxley Act of 2002.

32.1     Chief  Executive  Officer's  Certificate  Pursuant  to  Section  906
         of the Sarbanes-Oxley Act of 2002.

32.2     Chief  Financial  Officer's  Certificate  Pursuant  to  Section  906
         of the Sarbanes-Oxley Act of 2002.

                                      -16-