UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)                         FORM 10-K

[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004.

                                       OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
For the transition period from ______________________to_________________________

                        Commission File Number 333-83815
                                               ---------

                          Caithness Coso Funding Corp.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

                Delaware                                  94-3328762
                --------                                  ----------
    (State or other jurisdiction of                      (IRS Employer
     incorporation or organization)                    Identification No.)

     Coso Finance Partners              California               68-0133679
     Coso Energy Developers             California               94-3071296
     Coso Power Developers              California               94-3102796
    ---------------------               ----------               ----------
(Exact names of Registrants as  (State or other jurisdiction    (IRS Employer
  specified in their charters)        of incorporation)      Identification No.)

       565 Fifth Avenue, 29th Floor, New York, New York        10017-2478
       ------------------------------------------------        ----------
           (Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code      (212) 921-9099
                                                        --------------

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

                  9.05% Series B Senior Secured Notes Due 2009
                  --------------------------------------------
                                (Title of class)

     Indicate by check mark whether the  registrants  (1) have 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) have been subject to such
filing requirements for the past 90 days. Yes [ x ] No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation  S-K (229.405 of this chapter) is not  contained  herein,  and
will not be  contained,  to the best of  registrants'  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]

None of the Registrants' Common Stock is traded in a public market.

         Aggregate market value of the voting and non-voting common equity held
         by non-affiliates of the registrant:

                                 Not applicable

                       Documents Incorporated by Reference

                                 Not applicable
<PAGE>

                          CAITHNESS COSO FUNDING CORP.
                           ANNUAL REPORT ON FORM 10-K
                  FOR THE YEAR ENDED DECEMBER 31, 2004 AND 2003

                                   Part I                                   Page
                                                                            ----

Item 1.         Business                                                       3

Item 2.         Properties                                                     8

Item 3.         Legal Proceedings                                              9

Item 4.         Submission of Matters to a Vote of Security Holders            9

                                     Part II

Item 5.         Market for the Registrant's Common Equity, Related
                   Stockholder Matters and Issuer Purchases of
                   Equity Securities (Not applicable)                          9

Item 6.         Selected Financial Data                                       10

Item 7.         Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                        12

Item 7A.        Quantitative and Qualitative Disclosures About
                   Market Risk                                                18

Item 8.         Financial Statements and Supplementary Data                   18

Item 9.         Changes in and Disagreements with Accountants on              18
                   Accounting and Financial Disclosure

Item 9A.        Controls and Procedures                                       18

Item 9B.        Other Information                                             19

                                    Part III

Item 10.        Directors and Executive Officers of the Registrant            19

Item 11.        Executive Compensation                                        21

Item 12.        Security Ownership of Certain Beneficial Owners and
                   Management                                                 21

Item 13.        Certain Relationships and Related Transactions                23

Item 14.        Principal Accounting Fees and Services                        25

                                     Part IV

Item 15.        Exhibits and Financial Statement Schedules                    25

                                       2
<PAGE>

                                     Part I
Item 1. Business.


The Coso Projects

     The Coso projects  consist of three 80 MW geothermal  power plants,  called
Navy I, BLM and Navy II, certain transmission lines, wells, gathering system and
other related facilities.  The Coso projects are located near one another in the
Mojave Desert approximately 150 miles northeast of Los Angeles,  California, and
have been generating  electricity since the late 1980s. Unlike fossil fuel-fired
power plants, the Coso projects' power plants use geothermal energy derived from
the natural heat of the earth's interior to generate electricity.

     Coso Finance Partners (The Navy I Partnership)  owns Navy I and its related
facilities,  Coso  Energy  Developers  (the  BLM  Partnership)  owns BLM and its
related facilities and Coso Power Developers (the Navy II Partnership) owns Navy
II and its related facilities  (collectively,  the Coso Partnerships).  The Coso
Partnerships  and their  affiliates own the exclusive right to explore,  develop
and  use,  currently  without  any  known  interference  from  any  other  power
developers, a portion of the Coso Known Geothermal Resource Area.

     The Navy I,  BLM,  and Navy II  Partnership  sells  100% of the  electrical
energy  generated at the plants to Southern  California  Edison  (Edison)  under
three long-term Standard Offer No. 4 power purchase agreements, which expires in
August 2011,  March 2019 and January  2010,  respectively.  Each power  purchase
agreement  expires  after the last maturity  date of the senior  secured  notes.
(Edison is one of the largest  investor-owned  electric  utilities in the United
States.) Under the power purchase agreements,  the Coso Partnerships receive the
following payments:

     o    Capacity  payments  for being able to produce  electricity  at certain
          levels.  Capacity payments are fixed throughout the lives of the power
          purchase agreements;

     o    Capacity bonus payments if they are able to produce  electricity above
          a  specified,   higher  level.  The  maximum  capacity  bonus  payment
          available  is also fixed  throughout  the lives of the power  purchase
          agreements; and

     o    Energy  payments based on the amount of electricity  their  respective
          plants actually produce.

     Energy  payments were fixed for the first ten years of firm operation under
the  power  purchase  agreements.  Firm  operation  was  achieved  for each Coso
Partnership  when  Edison  and that Coso  Partnership  under its power  purchase
agreement  agreed that each  generating unit at a plant was a reliable source of
generation  and could  reasonably  be  expected to operate  continuously  at its
effective  rating.  After the first  ten years of firm  operation  and until its
power purchase agreement expires,  Edison is required to make energy payments to
the Coso Partnership based on its avoided cost of energy.  Edison's avoided cost
of energy is Edison's cost to generate  electricity if Edison were to produce it
itself  or buy it from  another  power  producer  rather  than  buy it from  the
relevant Coso Partnership.  The Edison power purchase  agreements will expire in
August 2011 for the Navy I Partnership;  in March 2019 for the BLM  Partnership;
and in January 2010 for the Navy II Partnership.

     Edison  entered  into  an  agreement  (the   "Agreement")   with  the  Coso
Partnerships on June 19, 2001 that addressed renewable energy pricing and issues
concerning  California's  energy  crisis.  The  Agreement,  which was amended on
November 30,  2001,  established  May 1, 2002 as the date the Coso  Partnerships
began  receiving  a fixed  energy rate of 5.37 cents per kWh for five (5) years.
Subsequent  to the five year  period,  Edison  will be  required  to make energy
payments to the Coso Partnerships based on its avoided cost of energy until each
partnership's power purchase agreement expires.

                                       3

Operating Strategy

     The Coso Partnerships seek to maximize their cash flow at the Coso projects
through active  management of their cost structure and the geothermal  resource.
The Coso Partnerships engage Coso Operating Company (COC), which is an affiliate
of  Caithness  Acquisition  Company,  LLC (CAC),  a wholly owned  subsidiary  of
Caithness  Energy,  LLC  (Caithness  Energy) to maintain all three  plants,  the
transmission  lines  and  the  geothermal  resource,  including  well  drilling.
Payments  for operator  fees are  subordinated  to all  payments  made under the
senior secured notes.

     The Coso projects qualify as Small Power  Qualifying  Facilities (QF) under
the Public Utility Regulatory Policies Act (PURPA) and the rules and regulations
promulgated  under PURPA by the Federal  Energy  Regulatory  Commission  (FERC).
PURPA  exempts QFs,  such as the Coso  projects  from certain  federal and state
regulations.  The Coso projects must continue to satisfy  certain  ownership and
fuel-use standards to maintain their QF status. Since their inception,  the Coso
projects have satisfied these standards and expect that they will continue to do
so in the future.


The Sponsor

     Caithness  Energy,  through its controlled  affiliates,  is a developer and
owner  of  independent  power  projects  and is the  majority  owner of the Coso
projects.   Caithness   Equities   Corporation   (formerly  known  as  Caithness
Corporation),  the controlling  member of Caithness  Energy has been involved in
the  development  of  long-term  investment   opportunities   involving  natural
resources for more than 25 years.  Caithness Equities  Corporation is one of the
two original  sponsors of the Coso projects and formed  Caithness Energy in 1995
to consolidate its ownership of independent power projects.

     Caithness  Energy believes that it is currently the second largest owner of
geothermal  power projects in the United States,  based on the total  electrical
generating  capacity of its power projects.  Through its controlled  affiliates,
Caithness  Energy owns interests in five geothermal  plants,  including the Coso
projects, totaling 313 MW of generating capacity. Caithness Energy has interests
in other  operating  power  generating  facilities,  including  solar,  wind and
natural gas, totaling an additional 2,193 MW of generating capacity.

     Caithness  Energy  is  headquartered  in New York  City  and has  affiliate
offices in California, Nevada, Colorado, New Jersey and Florida.


The Issuer

     Caithness  Coso  Funding  Corp.   (Funding  Corp.)  is  a  special  purpose
corporation  owned  entirely  by the Coso  Partnerships.  It was  formed for the
purpose  of  issuing  the  senior  secured  notes  (Notes) on behalf of the Coso
Partnerships  who  have  jointly,   severally,  and  unconditionally  guaranteed
repayment of the senior secured notes.

     Funding Corp. has no material assets, other than the loans made to the Coso
Partnerships,  and does not conduct any business,  other than issuing the senior
secured notes and making the loans to the Coso Partnerships.


The Coso Known Geothermal Resource Area

     The Coso  projects  are  located in an area that has been  designated  as a
Known Geothermal Resources Area by the Bureau of Land Management pursuant to the
Geothermal  Steam Act of 1970. The Bureau of Land Management  designates an area
as a Known  Geothermal  Resource  Area when it  determines  that a  commercially
viable  geothermal  resource is likely to exist there.  There are over 100 Known
Geothermal Resource Areas in the United States, most of which are located in the
western United States in tectonically active regions.

                                       4

     The  Coso  Known  Geothermal  Resource  Area is  located  in  Inyo  County,
California,   approximately  150  miles  northeast  of  Los  Angeles.  The  Coso
geothermal  resource is a  "liquid-dominated"  hot water source contained within
the heterogeneous  fractured granite rocks of the Coso Mountains. It is believed
the heat source for the Coso geothermal resource is a hot molten rock or "magma"
body located at a depth of six-to-seven  miles beneath the surface of the field.
Geochemical  studies indicate that the water in the Coso geothermal  resource is
ancient water that has been there since the ice age or longer.


Steam Sharing Program

     In 1994, the Coso Partnerships entered into a Geothermal Exchange Agreement
which implemented a steam-sharing  program among the Coso projects.  The purpose
of the  steam-sharing  program is to enhance the  management  and  optimize  the
overall  use of the Coso  geothermal  resource.  Pursuant  to the steam  sharing
program,  the Coso  Partnerships  constructed an inter-project  steam supply and
water  injection  system that links the three Coso  projects  and BLM North (see
page 4, BLM North)  together via metered  transfer  lines through which the Coso
Partnerships exchange steam and other geothermal resources with one another.

     As part  of the  steam  sharing  program,  the  Coso  Partnerships  plan to
conserve the  geothermal  resource  whenever  possible  by, among other  things,
transferring  steam  between and among the Coso  projects and BLM North,  rather
than drilling new wells at the Coso projects' sites prematurely, and expanding a
flexible  field-wide  water  reinjection  program.  While the U.S.  Navy and the
Bureau of Land Management have consented to the steam sharing program,  each has
reserved  the right,  in its sole  discretion,  to withdraw  its consent to such
transfers under certain circumstances.

     In  2004,  the Navy I  Partnership  and the  Navy II  Partnership  incurred
aggregate  royalties  to the U.S Navy of  approximately  $2.6  million for steam
transferred  by Navy I to Navy II and by Navy II to BLM under the steam  sharing
program  from  geothermal  resources  located on the property on which Navy I or
Navy II, as the case may be, are situated.  Of this amount,  the Navy I and Navy
II Partnerships each incurred  approximately  $1.3 million.  The BLM Partnership
reimbursed the Navy II Partnership  approximately  $0.4 million of the royalties
incurred by the Navy II Partnership. The BLM Partnership incurs a royalty to the
Navy II  Partnership  for  electricity  generated  by BLM and sold to Edison for
steam transferred from U.S. Navy property.


Royalty and Revenue-Sharing Arrangements

     The Coso  Partnerships  are required to make  royalty  payments to, and are
subject to other revenue-sharing arrangements with, the U.S. Navy, the Bureau of
Land Management and certain other persons.


Navy I and Navy II

     The Navy I and Navy II Partnerships have entered into a new agreement ("New
Contract") with the United States Navy which  terminates the existing  contracts
that were due to expire on December  31,  2009.  The New  Contract  commenced on
November  1,  2004 and  extends  the Navy I and Navy II  Partnerships  exclusive
rights to explore,  develop and use certain  geothermal  resources on U.S.  Navy
lands through October 31, 2034.

     Under the terms of the New Contract,  the royalty paid to the U.S. Navy has
been restructured so that the Navy I and Navy II Partnerships will pay at a rate
of 15% of gross revenues  received up to an annual base revenue amount as stated
in the agreement.  Beyond the annual base revenue amount,  the U.S. Navy and the
Navy I and Navy II Partnerships will split the additional  revenues,  on a 50/50
basis, until the U.S. Navy receives a maximum of 20% of all gross revenue.

                                       5

     Under the  terminated  contracts with the U.S. Navy, the Navy I Partnership
paid  royalties for Units 2 and 3 at 20% of gross  revenue  through 2009 and the
Navy II Partnership  paid  royalties at 18% of gross revenue  through 2004 which
was due to increase to 20% for the period 2005 through 2009.  Additionally,  the
Navy I  Partnership  was obligated to pay a royalty for Unit I consisting of the
payment of the U.S.  Navy's  electric bill for the China Lake Weapons  Facility,
subject to an indexed reimbursement from the U.S. Navy. The terminated contracts
also obligated the Navy I Partnership to fund an escrow account so that the Navy
I  Partnership  would pay the U.S.  Navy $25 million on December 31, 2009.  That
provision was also  terminated and a new escrow  arrangement was entered into so
the amount the Navy I Partnership owes the U.S. Navy on December 31, 2009 is now
$18 million. Finally, in the terminated contracts the U.S. Navy had the right to
terminate  the  contracts  at any  time for  their  convenience.  Under  the New
Contract that right has been eliminated.


BLM

     The BLM Partnership  pays royalties to the Bureau of Land Management  under
the BLM lease. The royalty rate is 10% of the net value of the steam produced by
the BLM  Partnership.  This royalty rate is fixed for the life of the BLM lease.
In addition to this royalty,  the BLM  Partnership  is obligated,  in connection
with the assignment of the BLM lease to the BLM Partnership, to pay to Coso Land
Company  (CLC),  a general  partnership  of which CAC and another  affiliate  of
Caithness Energy are the general partners, a royalty of 5% based on the value of
the steam  produced.  The royalty is  subordinated to the payment of all the BLM
Partnership's  other royalties,  all debt service and all operating costs of the
BLM Partnership. No portion of the royalty accrued to CLC has been paid to date,
since it is subordinated to payment of the project loan.


BLM North

     In December 2000, the Bureau of Land Management  allowed CLC to assign each
of the Coso  Partnerships  an  undivided  one-third  interest  in leases CLC had
previously  bought from the Los Angeles  Department of Water and Power  (LADWP).
The  assignment  required  each  Coso  Partnership  to pay  $8.00  per  acre  in
additional  rent to the  Bureau of Land  Management.  When the  leased  property
commences to produce  geothermal  steam, the Coso  Partnerships will pay monthly
royalties  under the LADWP leases of 10% of the value of steam  produced,  5% of
the value of any by-products,  and 5% of the value of commercially demineralized
water. The Bureau of Land Management may establish minimum production levels and
reduce the foregoing royalties if necessary to encourage greater recovery of
leased resources.


Operations and Maintenance

     The operations and  maintenance  services for the Coso projects,  including
the Navy I, BLM, and Navy II transmission  lines,  wells,  gathering system, and
other  related  facilities,   are  performed  by  COC  on  behalf  of  the  Coso
Partnerships pursuant to two separate Operation and Maintenance agreements.  One
agreement  pertains to  operating  the plant and was for an initial  three years
with an automatic three year extension expiring in May 2005. The other agreement
pertains to  developing  the  resource  and expires on December  31,  2009.  COC
maintains  a qualified  technical  staff  covering a broad range of  disciplines
including geology,  geophysics,  geochemistry,  drilling  technology,  reservoir
engineering, plant engineering,  construction management,  maintenance services,
production management, electric power operation and certain accounting services.
As of December 31, 2004, COC employed 85 people to operate and maintain the Coso
projects.


Insurance

     The Coso  Partnerships  renew their insurance policy annually and currently
have  property,   business  interruption,   catastrophe  and  general  liability
insurance. For the period February 25, 2004 to February 24, 2005 the plants were
insured up to their  replacement  cost for general  property damage and business
interruption  on an actual loss sustained  basis with an indemnity  period of 12
months,  subject to a $250,000  deductible  for property  damage (and a $500,000
deductible  for the  turbine  generator  sets),  with a  45-day  deductible  for
business interruption  (including machinery breakdown).  Catastrophic  insurance
(including earthquake and flood) was capped at $150 million for property damage,
subject  to a  minimum  deductible  of $2.5  million  or 5.0% of the  loss.  The
deductible  for flood damage is $250,000 for any one loss.  Liability  insurance
coverage was $51 million (occurrence  based).  Operators' extra expense (control
of well) insurance is $10 million per occurrence with a $250,000 deductible.

                                       6
Competition

     The Coso Partnerships sell all electrical energy generated at the plants to
Edison under three long-term Standard Offer No. 4 power purchase agreements. The
payments under these agreements have constituted 100% of the operating  revenues
of each power plant since its inception.


Environmental and Regulatory Matters

     The Coso Partnerships are subject to environmental  laws and regulations at
the  federal,  state  and  local  levels  in  connection  with the  development,
ownership  and  operation of the Coso  projects.  These  environmental  laws and
regulations  generally  require that a wide variety of permits and  governmental
approvals be obtained to construct and operate an energy-producing facility. The
facility  must then operate in  compliance  with the terms of these  permits and
approvals.  If the  Coso  Partnerships  fail  to  operate  their  facilities  in
compliance with applicable laws,  permits and approvals,  governmental  agencies
could levy fines, curtail operations, or seek orders to cease operations.

     The Coso  Partnerships  believe  they  are in  compliance  in all  material
respects with all environmental  regulatory  requirements applicable to the Coso
projects, and that maintaining compliance with current governmental requirements
will not  require a material  increase  in capital  expenditures  or  materially
adversely  affect  that Coso  Partnership's  financial  condition  or results of
operations.  It is possible,  however,  that future  developments,  such as more
stringent   requirements  of   environmental   laws  and  enforcement   policies
thereunder,  could affect  capital and other costs at the Coso  projects and the
manner in which the Coso Partnerships conduct their business.


Risk Factors

     Operating the Coso projects involves, among other things, general economic,
financial,  competitive,  legislative,  legal, regulatory and other factors that
are beyond  management's  control.  Changes in these  factors could make it more
expensive  to  operate  the  Coso  projects,   or  require   additional  capital
expenditures,  or  reduce  certain  benefits  currently  available  to the  Coso
Partnerships.  There are a variety of other risks that affect the Coso projects,
some of which are beyond management's control, including:

     o    One or more of the Coso projects could perform below  expected  levels
          of output or efficiency which would reduce revenue;

     o    In light of the  uncertainty of the Western energy  markets,  Edison's
          financial   viability  may  be   considered   uncertain  and  accounts
          receivable from Edison could be reduced or eliminated;

     o    The Coso geothermal resource could be interrupted or unavailable;

     o    Operating costs could increase;

     o    Changes  in  the  regulatory   structure   which  govern  the  current
          operations of the Coso Partnerships.

                                       7

     o    Future  competition  may  lead  to an  accelerated  depletion  of  the
          resource;

     o    Energy prices paid by Edison could  decrease or terminate;

     o    Delivery of electrical energy to Edison could be disrupted;

     o    Environmental  problems or regulation  changes could arise which could
          lead to fines or a shutdown of one or more plants;

     o    Plant units and  equipment  have broken down or failed in the past and
          could break down or fail in the future;

     o    The operators of the Coso projects could suffer labor disputes;

     o    The   government   could  change  permit  or   governmental   approval
          requirements restricting operations;

     o    Third parties could fail to perform their  contractual  obligations to
          the Coso Partnerships; and

     o    Catastrophic events, such as fires, earthquakes,  explosions,  floods,
          severe storms or other occurrences  including  terrorism or war, could
          affect one or more of the Coso projects, the Navy or Edison.

     In  addition,   the  Coso  Partnerships  must  meet  specified  performance
requirements under their respective power purchase  agreements during the months
of June through  September  to continue to qualify for the maximum  capacity and
capacity  bonus  payments.  If one or more of the events  listed above occur and
substantially  affect the  performance of one or more of the plants during these
months, operating revenues would be significantly decreased.


Item 2.  Properties


Plants

Navy I

     Navy I and its steam  resource  are  located  on the  United  States  Naval
Weapons Center at China Lake and commenced operations in 1987. In December 2000,
Navy I acquired an undivided  one-third interest in leases previously  purchased
from LADWP located on Bureau of Land Management  property.  Geothermal steam for
Navy I is produced  using 43  production  and injection  wells located  within a
radius of approximately  3,000 feet of Navy I. Navy I consists of three separate
turbine generators,  known as Units 1, 2 and 3, each with approximately 30 MW of
electrical generating capacity.  Navy I's steam gathering and piping systems are
cross-connected  to  Navy  II  via  metered  transfers  to  allow  steam  to  be
transferred  from wells located on the real property covered by the LADWP leases
to Navy I and between Navy I and Navy II, pursuant to the steam sharing program.
Unit 1  commenced  firm  operation  in 1987,  and Units 2 and 3  commenced  firm
operation  during 1988.  Navy I has an  aggregate  gross  electrical  generating
capacity of approximately 90 MW, and operated at an average  operating  capacity
factor of 101.3% in 2004,  100.3% in 2003, and 104.7% in 2002, based on a stated
capacity of 80 MW.


BLM

     BLM and its  steam  resource  are  located  on  Bureau  of Land  Management
property,  within the  boundaries of the United  States Naval Weapons  Center at
China Lake and commenced  operations in 1989. In December  2000, BLM acquired an
undivided one-third interest in leases previously purchased from LADWP which are
also located on Bureau of Land Management property.  BLM is comprised of turbine
generators  located at two different power blocks: the BLM East site and the BLM

                                       8

West site. The BLM East site is located  approximately 1.3 miles east of the BLM
West  site.  Geothermal  steam  for BLM is  produced  using  41  production  and
injection wells located within a radius of approximately  4,000 feet from either
the BLM East or the BLM West  site.  BLM  consists  of  three  separate  turbine
generators, known as Units 7, 8 and 9. Units 7 and 8 are located at the BLM East
site, each with a generating  capacity of  approximately  30 MW, while Unit 9 is
located at the BLM West site, with a generating capacity of approximately 30 MW.
All three units commenced firm operation  during 1989. BLM's steam gathering and
piping  systems are cross  connected  to Navy II via metered  transfers to allow
steam to be  transferred  between Navy II and BLM pursuant to the steam  sharing
program.   BLM  has  an  aggregate  gross  electrical   generating  capacity  of
approximately  90 MW, and operated at an average  operating  capacity  factor of
86.7% in 2004,  89.8% in 2003, and 93.9% in 2002,  based on a stated capacity of
80 MW.


Navy II

     Navy II and its steam  resource  are  located  on the United  States  Naval
Weapons Center at China Lake and commenced operations in 1989. In December 2000,
Navy II acquired an undivided one-third interest in leases previously  purchased
from LADWP which are located on Bureau of Land Management  property.  Geothermal
steam for Navy II is produced  using 34 production  and injection  wells located
within a radius of  approximately  6,000 feet of Navy II.  Navy II  consists  of
three  separate  turbine  generators,  known  as  Units  4, 5 and 6,  each  with
approximately 30 MW of electrical  generating capacity.  All three Navy II units
commenced  firm   operation  in  1990.   Navy  II's  steam  supply  systems  are
cross-connected  to Navy I and BLM steam supply systems via metered transfers to
allow steam to be transferred  between or among the plants pursuant to the steam
sharing  program.  Navy  II  has  an  aggregate  gross  electrical  capacity  of
approximately  90 MW, and operated at an average  operating  capacity  factor of
106.6% in 2004,  103.4% in 2003, and 100.4% in 2002,  based on a stated capacity
of 80 MW.


Transmission Lines

     The  electricity  generated  by Navy I is  conveyed  over an  approximately
28.8-mile 115 kilovolt ("kV")  transmission  line on the U.S. Navy and Bureau of
Land  Management  land that is connected to the Edison  substation  at Inyokern,
California.  The Navy I Partnership owns and uses this transmission line and its
related  facilities.  The  electricity  generated by BLM and Navy II is conveyed
over an approximately 28.8-mile 230 kV transmission line on U.S. Navy and Bureau
of Land  Management  land that is also  connected  to the Edison  substation  at
Inyokern, California. Coso Transmission Line Partners, which is jointly owned by
the BLM and Navy II  Partnerships,  owns the BLM/Navy II  transmission  line and
related facilities.


Item 3. Legal Proceedings.

     The Coso  Partnerships are currently parties to various items of litigation
relating to day-to-day  operations.  Management  does not believe the outcome of
such  proceedings  will be material to the  financial  condition  and results of
operations of the Coso Partnerships, either individually or taken as a whole.


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

        None
                                     Part II


Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and
        Issuer Purchases and Equity Securities.

        Not applicable.

                                       9
Item 6. Selected Financial Data.

     The  selected  fiscal year end  financial  data has been  derived  from the
audited financial statements of the Coso Partnerships. The information contained
in the following tables should be read in conjunction with the audited financial
statements and notes thereto included elsewhere in this report.
<TABLE>
<CAPTION>
                                                         Navy I Partnership
                                                           and Subsidiary
                                                 (In thousands, except ratio data)

                                                                                          Year Ended December 31,
                                                                                          -----------------------
<S>                                                                     <C>          <C>          <C>          <C>          <C>
                                                                         2004         2003         2002         2001         2000
                                                                         ----         ----         ----         ----         ----
Statement of Operations Data:
     Operating revenues(c)....................................        $  60,544    $  59,792    $  92,065    $  53,400    $  52,419
     Operating expenses(d)....................................          (35,155)     (34,037)     (33,517)     (29,304)     (29,239)
                                                                         ------       ------       ------       ------       ------
     Operating income.........................................           25,389       25,755       58,548       24,096       23,180

Non-Operating income (expense):
     Interest expense.........................................           (8,592)      (9,738)     (10,836)     (11,732)     (12,493)
     Other expenses...........................................             (315)        (315)        (315)        (705)        (520)
     Interest and other income, net...........................            2,491        1,782        1,715        3,050        2,621
                                                                          -----        -----       ------       ------       ------

     Net income...............................................        $  18,973    $  15,704    $  49,112    $  14,709    $  12,788
                                                                         ======       ======       ======       ======       ======

Operating Data:
     Operating capacity factor (a)............................           101.3%       100.3%       104.7%       108.3%       111.8%
     kWh produced.............................................          711,760      702,850      733,877      758,890      785,624

                                      See Footnotes to Selected Financial and Operating Data


                                                          BLM Partnership
                                                           (Stand-alone)
                                                 (In thousands, except ratio data)

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

                                                                         2004         2003         2002         2001         2000
                                                                         ----         ----         ----         ----         ----
Statement of Operations Data:
     Operating revenues(c)....................................        $  44,746    $  46,869    $  81,252    $  44,041    $  42,174
     Operating expenses(d)....................................          (25,482)     (24,932)     (28,526)     (31,396)     (31,414)
                                                                         ------       ------       ------       ------       ------
     Operating income.........................................           19,264       21,937       52,726       12,645       10,760

Non-Operating income (expense):
     Interest expense.........................................           (7,457)      (8,018)      (8,567)      (8,958)      (9,174)
     Other expenses...........................................             (255)        (255)        (255)        (440)        (318)
     Interest and other income, net...........................            2,059        1,141        1,455        3,766        8,125
                                                                          -----        -----        -----        -----        -----

     Net income...............................................        $  13,611    $  13,881    $  45,359    $   7,013    $   9,393
                                                                         ======       ======       ======        =====        =====

Operating Data:
     Operating capacity factor (a)............................            86.7%        89.8%        93.9%       102.8%       109.4%
     kWh produced.............................................          609,100      629,470      657,813      720,130      769,098

                                      See Footnotes to Selected Financial and Operating Data

                                                             10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                       Navy II Partnership
                                                          and Subsidiary
                                                 (In thousands, except ratio data)

                                                                                          Year Ended December 31,
                                                                                          -----------------------
<S>                                                                     <C>          <C>          <C>          <C>          <C>
                                                                         2004         2003         2002         2001         2000
                                                                         ----         ----         ----         ----         ----
Statement of Operations Data:
     Operating revenues(c)....................................        $  48,129    $  46,149    $  79,592    $  36,389    $  43,054
     Operating expenses(d)....................................          (28,089)     (27,766)     (29,559)     (34,615)     (34,820)
                                                                         ------       ------       ------       ------       ------
     Operating income.........................................           20,040       18,383       50,033        1,774        8,234

Non-Operating income (expense):
     Interest expense.........................................           (6,211)      (7,070)      (7,538)      (8,128)      (9,130)
     Other expenses...........................................             (217)        (217)        (217)      (1,119)        (769)
     Interest and other income, net...........................            2,681          569        1,025        3,090        3,105
                                                                          -----        -----        -----        -----        -----

     Net income (loss)........................................        $  16,293    $   9,888    $  43,303    $  (4,383)   $   1,440
                                                                         ======        =====       ======        =====        =====

Operating Data:
     Operating capacity factor (a)............................           106.6%       103.4%       100.4%       104.9%       111.1%
     kWh produced.............................................          749,040      724,600      703,920      735,210      780,709

                                      See Footnotes to Selected Financial and Operating Data


                                                                                            As of December 31,
                                                                                            ------------------
                                                                         2004         2003        2002         2001         2000
                                                                         ----         ----        ----         ----         ----
Balance Sheet Data (in thousands):
---------------------------------

Navy I Partnership and Subsidiary
   Cash.......................................................       $    791     $  1,429     $  4,274     $    264     $  3,498
   Restricted cash, cash equivalents and investments..........         28,192       24,657       28,692       21,325       22,996
   Property, plant and equipment, net.........................        133,624      135,871      137,497      141,652      150,422
   Power purchase contract, net...............................          7,650        8,798        9,945       11,093       12,240
   Total assets...............................................        186,979      187,265      197,760      195,829      201,647
   Project loan (b)...........................................         86,850       97,547      110,955      122,550      134,984
   Partners' capital..........................................         76,892       66,676       65,408       52,425       46,871

BLM Partnership (stand-alone)
   Cash.......................................................       $    496     $    603     $  1,423     $     --     $  5,862
   Restricted cash, cash equivalents and investments..........         11,071       10,155        6,646        7,368       14,502
   Property, plant and equipment, net.........................        123,903      130,519      135,853      148,417      153,618
   Power purchase contract, net...............................         15,221       16,293       17,365       18,437       19,510
   Total assets...............................................        162,906      170,556      174,871      183,978      201,312
   Project loan (b)...........................................         74,900       84,821       89,875       96,250      100,907
   Partners' capital..........................................         56,936       54,817       56,603       52,762       69,245

Navy II Partnership and Subsidiary
   Cash.......................................................       $    507     $     78     $    824     $     --     $  7,741
   Restricted cash, cash equivalents and investments..........          8,609        8,281       10,855        5,517       10,214
   Property, plant and equipment, net.........................        113,696      120,509      122,105      130,821      143,346
   Power purchase contract, net...............................         14,437       17,232       20,026       22,820       25,614
   Total assets...............................................        155,005      164,543      171,487      172,816      198,564
   Project loan (b)...........................................         60,527       71,246       80,401       84,200       94,176
   Partners' capital..........................................         87,527       85,084       85,361       62,220       87,423

                                      See Footnotes to Selected Financial and Operating Data

                                                                11
</TABLE>
               Footnotes to Selected Financial and Operating Data

(a)  Based on a stated capacity of 80 MW.

(b)  Reflects  indebtedness owed to Funding Corp., which loaned all the proceeds
     from the Notes to the Coso  Partnerships  at interest  rates and maturities
     identical to the interest rates and maturities of the senior secured notes.

(c)  Reflects  non-recognition  of  operating  revenues  in 2001 for the  period
     November 1, 2000 through March 26, 2001, based on non-collection of amounts
     due  for  power  generated  and  sold to  Edison,  which  was  subsequently
     collected and recognized in operating revenue in 2002.

(d)  Certain  balances in prior years have been  reclassified  to conform to the
     presentation adopted in the current year.


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

     Except for financial information contained herein, the matters discussed in
this  annual  report may be  considered  forward-looking  statements  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities Exchange Act of 1934, as amended,  and subject to the safe
harbor created by the Securities  Litigation Reform Act of 1995. Such statements
include  declarations  regarding the intent,  belief or current  expectations of
Caithness  Coso  Funding  Corp.  (Funding  Corp.),  Coso  Finance  Partners  and
Subsidiary   (the  Navy  I  Partnership),   Coso  Energy   Developers  (the  BLM
Partnership),   and  Coso  Power   Developers  and   Subsidiary   (the  Navy  II
Partnership),   collectively,  (the  Coso  Partnerships)  and  their  respective
management.  Such  statements  may be  identified  by  terms  such as  expected,
anticipated,  may, will, believe or other terms or variations of such words. Any
such  forward-looking  statements are not guarantees of future  performance  and
involve  a number  of risks  and  uncertainties;  actual  results  could  differ
materially from those indicated by such  forward-looking  statements.  Among the
important factors that could cause future operating results to differ materially
from those  anticipated  include,  but are not limited to: (i) risks relating to
the uncertainties in the California energy market,  (ii) the financial viability
of Southern California Edison, ("Edison"),  (iii) risks related to the operation
of  geothermal  power plants (iv) the impact of avoided cost pricing  along with
other  pricing  variables,  (v)  general  operating  risks,  including  resource
availability and regulatory  oversight,  (vi) changes in government  regulation,
(vii) the  effects of  competition  and (viii) the alleged  manipulation  of the
California energy market.


Capacity Utilization

     For purposes of consistency in financial  presentation,  the plant capacity
factor for each of the Coso  Partnerships is based on a nominal  capacity amount
of 80MW (240MW in the aggregate).  The Coso  Partnerships have a gross operating
capacity  that  allows  for the  production  of  electricity  in excess of their
nominal capacity  amounts.  Utilization of this operating margin is based upon a
number of factors and can be expected to vary  throughout  the year under normal
operating conditions.

     The following  data includes the operating  capacity  factor,  capacity and
electricity  production  (in kWh) for each  Coso  Partnership  on a  stand-alone
basis:

                                                 Year Ended December 31,
                                                 -----------------------
                                         2004             2003             2002
                                         ----             ----             ----
 Navy I Partnership
 Operating capacity factor              101.3%           100.3%           104.7%
 Capacity (MW) (average)                 81.03            80.23            83.78
 kWh produced (000s)                   711,760          702,850          733,877

                                       12

 BLM Partnership
 Operating capacity factor               86.7%            89.8%            93.9%
 Capacity (MW) (average)                 69.34            71.86            75.09
 kWh produced (000s)                   609,100          629,470          657,813

 Navy II Partnership
 Operating capacity factor              106.6%           103.4%           100.4%
 Capacity (MW) (average)                 85.27            82.72            80.36
 kWh produced (000s)                   749,040          724,600          703,920


     Total energy  production for the Navy I and Navy II Partnerships  increased
in  2004,  as  compared  to  2003,  due to  successful  implementation  of  well
maintenance  and capital  improvements  including  the  enhancement  of existing
production  wells and  additional  steam field  piping  modifications  that were
completed in 2003.  The Coso  Partnerships  expect to further  enhance the steam
utilization and efficiency of the projects  through  various plant  enhancements
and additional steam-field piping modifications.  With respect to the reservoir,
an injection  augmentation  program,  aimed at improving  reservoir pressure and
minimizing  resource decline,  is currently in the engineering design phase. The
funds necessary to implement the capital  improvement program are available from
reserves  established  under the Notes and from excess cash flow generated after
debt service.

     Total  energy  production  for the  BLM  Partnership  decreased  in 2004 as
compared to 2003 due to a decline in steam,  which  management  is attempting to
remediate through well maintenance  capital  improvements and the other programs
discussed above.

     Total energy  production for the Navy I and BLM  Partnerships  decreased in
2003,  as  compared  to 2002,  due to a decline in steam,  which  management  is
attempting to remediate through the well maintenance,  capital  improvements and
the other programs discussed above.

     Total energy  production for the Navy II Partnership  increased in 2003, as
compared  to 2002,  due to the  success  of the  effort to  increase  production
overall,  whereby the Coso  Partnerships  have  implemented  the above mentioned
projects.

Results of Operations for the years ended December 31, 2004, 2003, and 2002.
----------------------------------------------------------------------------

     The following  discusses the results of operations of the Coso Partnerships
for the years ended December 31, 2004,  2003 and 2002 (dollar  amounts in tables
are in thousands, except per kWh data):


Revenue
<TABLE>
<CAPTION>
                                                   2004                         2003                         2002
                                                   ----                         ----                         ----
                                              $         cents/kWh          $         cents/kWh          $         cents/kWh
                                              -         ---------          -         ---------          -         ---------
<S>                                          <C>           <C>            <C>           <C>            <C>           <C>
Total Operating Revenues
including steam transfers
Navy I Partnership                         60,544           8.5          59,792          8.5           92,065        12.5
BLM Partnership                            44,746           7.3          46,869          7.4           81,252        12.4
Navy II Partnership                        48,129           6.4          46,149          6.4           79,592        11.3
</TABLE>

     The Coso Partnerships sell all electricity  generated to Edison under their
respective  power  purchase  agreements.  Total  operating  revenues  consist of
capacity payments, capacity bonus payments, and energy payments, including steam
transfers discussed above.

     Total operating revenues for the Navy I and Navy II Partnerships  increased
in 2004, as compared to 2003, due to the increase in energy production discussed
above.

     Total  operating  revenues for the BLM  Partnership  decreased in 2004,  as
compared to 2003, due to the decrease in energy production discussed above.

                                       13

     Total  operating  revenues for the Coso  Partnerships  decreased in 2003 as
compared  to  2002,  due  to the  recognition  of  revenues  generated  but  not
recognized for the period from November 1, 2000 through March 26, 2001. Periodic
increases in natural gas prices and imbalances between supply and demand,  among
other  factors,  have  at  times  led  to  significant  increases  in  wholesale
electricity prices in California. During those periods, Edison had fixed tariffs
with its retail customers that were significantly  below the wholesale prices it
paid in California.  That resulted in significant  under-recoveries by Edison of
its electricity  purchase costs. On January 16, 2001,  Edison  announced that it
was temporarily  suspending  payments for energy provided,  including the energy
provided  by the  Partnership,  pending a permanent  solution  to its  liquidity
crisis.  Subsequently,  pursuant to a  California  Public  Utilities  Commission
(CPUC) order, Edison resumed making payments to the Coso Partnerships  beginning
with power  generated on March 27, 2001.  Edison also made payments equal to 10%
of the unpaid  balance for power  generated  from  November 1, 2000 to March 26,
2001 and paid interest on the  outstanding  amount at 7% per annum.  On March 1,
2002, the Navy I, BLM and Navy II Partnerships  received  payment and recognized
revenue of $37.3  million,  $37.1 million and $38.0 million,  respectively,  for
energy  generated in 2000 and 2001.  The  decreases in operating  revenue at the
Navy I and BLM  Partnerships  were  caused by their  decline in steam  discussed
above. The decreases for each of the Coso  Partnerships were partially offset by
the increase in the fixed energy rate to 5.37 cents per kWh paid during 2003, as
compared to the average fixed energy rate of 4.66 cents per kWh paid in 2002.


Plant Operating Expense
<TABLE>
<CAPTION>
                                                   2004                        2003                        2002
                                                   ----                        ----                        ----
                                              $         cents/kWh         $         cents/kWh         $         cents/kWh
                                              -         ---------         -         ---------         -         ---------
<S>                                          <C>           <C>           <C>           <C>           <C>           <C>
Navy I Partnership                          10,955          1.5         10,159          1.4          9,837          1.3
BLM Partnership                             14,088          2.3         12,834          2.0         11,748          1.8
Navy II Partnership                          9,617          1.3          9,890          1.3         10,192          1.5
</TABLE>

     Plant operating  expense consists of labor and related  expenses,  supplies
and  maintenance,   property  taxes,  insurance,  workovers  and  administrative
expense.  Plant  operating  expenses have been consistent from year to year with
the  following  exceptions;  Property  taxes  for  the  Navy  I,  BLM  and  Navy
Partnerships  decreased  by  approximately   $269,000,   $350,000  and  $390,000
respectively in 2004 as compared to 2003 offset by increased well workover costs
of $1,421,000,  $1,002,000 and $407,000  respectively for the same periods.  The
decrease in property  taxes in 2004 resulted from lower assessed  values,  while
the increase in well workover  costs  resulted from the  production  enhancement
projects discussed above.

     Plant  operating  expenses for the Navy I Partnership  increased in 2003 as
compared to 2002,  due to  increased  insurance  costs,  well  workovers  and an
allowance for doubtful accounts of $216,000  established based on a dispute with
Edison  regarding the payment for capacity,  offset by the reduction in property
tax.  Plant  operating  expenses  for the BLM  Partnership  increased in 2003 as
compared to 2002, due to increased  insurance costs,  well workovers,  partially
offset by the reduction in property tax. Plant  operating  expenses for the Navy
II  Partnership  decreased in 2003 as compared to 2002,  due to the reduction in
property  tax  and  lower  well  workovers  partially  offset  by the  increased
insurance costs and an allowance for doubtful  accounts  established  based on a
dispute with Edison regarding payment for capacity of $82,000.

     Insurance  expense  for  each  of  the  Coso   Partnerships   increased  by
approximately  $75,000  in  2003 as  compared  to  2002,  while  property  taxes
decreased  for the  Navy I,  BLM,  and  Navy II  Partnerships  by  approximately
$670,000,  $720,000  and  $610,000,  respectively,  for the  same  periods.  The
significant  decrease in property  taxes in 2003  resulted  from a correction by
Inyo county to the 2001 assessment received and paid in 2002.

                                       14
Royalty Expense
<TABLE>
<CAPTION>
                                                   2004                       2003                         2002
                                                   ----                        ----                        ----
                                              $         cents/kWh         $         cents/kWh         $         cents/kWh
                                              -         ---------         -         ---------         -         ---------
<S>                                          <C>           <C>           <C>           <C>           <C>           <C>
Navy I Partnership                         12,747           1.8         13,081          1.9         12,914          1.8
BLM Partnership                             2,313           0.4          2,778          0.4          2,436          0.4
Navy II Partnership                         8,231           1.1          7,520          1.0          6,961          1.0
</TABLE>

     The  royalty  expense  for  the  Navy I  Partnership  decreased  in 2004 as
compared to 2003 due to the reduction in Unit 1 royalty  resulting  from reduced
tariff rates charged by Edison for the ten month period in 2004  governed  under
the old Navy contract  discussed  above.  The decrease in royalty for Unit I was
partially  offset  by an  increase  in  royalty  for Units 2 and 3 due to higher
revenue  resulting from increased energy production in 2004 as compared to 2003,
discussed above.

     The royalty expense for the BLM Partnership  decreased in 2004, as compared
to 2003,  due to lower revenue  resulting from the decreased  energy  production
discussed  above.  The royalty expense for the Navy II Partnership  increased in
2004, as compared to 2003,  due to higher  revenue  resulting from the increased
energy production discussed above.

     The royalty expenses for the Coso Partnerships  increased  slightly in 2003
as compared to 2002  primarily  due to the  increase in the fixed energy rate to
5.37 cents per kWh from 4.66 cents per kWh in 2002.


Depreciation and Amortization

     Depreciation and amortization expense for the Navy I Partnership  increased
in 2004, as compared to 2003, due to a new well being placed in service in 2004.
Depreciation  and  amortization  expense  for the BLM and  Navy II  Partnerships
remain comparable in 2004 as compared to 2003 as older wells and plant overhauls
are fully depreciated and replaced with capital additions.

     Depreciation and amortization for the Coso  Partnerships  decreased in 2003
as  compared  to 2002  due to  older  wells  and  plant  overhauls  being  fully
depreciated  during 2003. The decrease for the Navy I Partnership  was offset by
an increase in capitalized assets associated with the new well placed in service
in 2002.


Interest and Other Income

     Interest and other income for the Navy I Partnership  decreased in 2004, as
compared to the same period in 2003, due to a $1 million legal  settlement and a
one-time  credit of $0.5 million paid in 2003 by the  California  Department  of
Water Resources resulting from the energy crisis of 2001,  partially offset by a
property  tax  refund in 2004  resulting  from a  reduction  in the  prior  year
assessed values.  Interest and other income for the BLM and Navy II Partnerships
increased in 2004,  as compared to 2003,  due to property tax refunds  resulting
from a reduction in the prior year assessed values.

     Interest  and other income for the Coso  Partnerships  decreased in 2003 as
compared to 2002 due to a decrease in the rate of return on  investments  due to
lower market rates for fixed income investments during those periods in 2003 and
decreased  interest  income on amounts in arrears,  owed by Edison in 2001, that
were  settled and paid by Edison on March 1, 2002.  The  decrease for the Navy I
Partnership  was  partially  offset  by the  one-time  credit  of  $0.5  million
discussed above.


Interest Expense

     Interest expense for the Coso  Partnerships  decreases  annually due to the
reduction in the principal amount of the project loans from Funding Corp.

                                       15

Liquidity and Capital Resources

     Each of the  Navy I  Partnership,  the  BLM  Partnership  and  the  Navy II
Partnership derive  substantially all of their cash flow from Edison under their
power purchase  agreements and from interest  income earned on funds on deposit.
The Coso  Partnerships  have used their cash primarily for capital  expenditures
for power plant  improvements,  resource and operating  costs,  distributions to
partners and payments with respect to the project loan.

     The Coso  Partnerships  cash flow  obligations  over the next several years
consist of debt service  payments to Funding  Corp.,  as they come due under the
Notes. The Coso  Partnerships  expect to be able to meet these  obligations from
operating cash flow. Historically, any excess cash after debt service has either
been reserved for capital improvements or distributed to the partners.

     The Coso  Partnerships  ability to meet their  obligations as they come due
will depend upon the ability of Edison to meet its  obligations  under the terms
of the standard offer No. 4 power purchase agreements and the Coso Partnerships'
ability to continue to generate electricity.  Edison's shortfall in collections,
due to its  bankruptcy in 2001 coupled with its near term capital  requirements,
materially  and  adversely  affected  its  liquidity  during  2000 and 2001.  In
resolution  of that  issue,  Edison  settled  with the CPUC on  October 2, 2001,
enabling it to recover in retail  electric  rates its  historical  shortfall  in
electric  purchase  costs.  On September  23, 2002,  the United  States Court of
Appeals  for the Ninth  Circuit  issued an opinion  and order on appeal from the
district court's stipulated  judgment which affirmed the stipulated  judgment in
part and referred  questions based on California  state law to the Supreme Court
of  California.  The  appeals  court  stated  that  if  the  Agreement  violated
California  state  law then the  appeals  court  would be  required  to void the
stipulated  judgment.  California Supreme Court accepted the Ninth Circuit Court
of Appeals  request to address the issues  referred to it in the  September  23,
2002 ruling, and subsequently found that the stipulated judgment did not violate
state laws. No further appeals have been taken in this matter. Consequently, the
Agreement  remains in full force and effect.  Immediately after this settlement,
Edison and each of the Coso  Partnerships  entered  into an  amendment  of their
respective Agreement (referenced above) pertaining to past due obligations.  The
Agreement,  as  amended,  was  approved  by the CPUC in  January  of  2002,  and
established the fixed energy rates discussed above and set payment terms for the
past due amounts owed to the Coso  Partnerships by Edison.  Edison's  failure to
pay its  future  obligations  may have a  material  adverse  effect  on the Coso
Partnerships  ability to make debt service  payments to Funding  Corp.,  as they
come due under the Notes.

     On March 1, 2002, Edison reached certain financing  milestones and paid the
Coso  Partnerships for revenue  generated but not recognized for the period from
November 1, 2000 through March 26, 2001. The Coso Partnerships did not recognize
the  revenue  timely  because of the  uncertainty  of  collection.  In the first
quarter of 2002, the Navy I, BLM and Navy II Partnerships recognized revenue for
energy  delivered  during that period of $37.3 million,  $37.1 million and $38.0
million,  respectively.  Since,  March 27,  2001  Edison has been  current  with
payments for the energy portion of the Coso Partnerships' revenue.

     Under the  depository  agreement  with the trustee for the notes,  the Coso
Partnerships  established  accounts with a depository and pledged those accounts
as  security  for the benefit of the holders of the senior  secured  notes.  All
amounts  deposited  with  the  depository  are,  at the  direction  of the  Coso
Partnerships,  invested by the depository in permitted investments. All revenues
or other proceeds  actually received by the Coso Partnerships are deposited in a
revenue  account and withdrawn  upon receipt by the  depository of a certificate
from the relevant Coso Partnerships  detailing the amounts to be paid from funds
in its respective revenue account.

     Net cash from operating  activities for the Navy I and Navy II Partnerships
increased in 2004, as compared to 2003, due to the increased  production,  while
net cash from operating activities for the BLM Partnership  decreased during the
same periods due to the decrease in production  discussed  above.  Net cash from
operating activities for the Coso Partnerships  decreased in 2003 as compared to
2002 primarily due to Edison's  payment  received in 2002 for revenue  generated
but not recognized for the period from November 1, 2000 through March 26, 2001.

                                       16

     Net cash from investing  activities at the Navy I Partnership  decreased in
2004 as compared to 2003 due to the  increase in  restricted  cash  requirements
associated  with the Notes while net cash from  investing  activities in the BLM
and Navy II Partnerships  increased during the same periods due to a decrease in
capital   expenditures.   Net  cash  from  investing  activities  for  the  Coso
Partnerships  decreased  in 2003 as  compared  to 2002  due to the  increase  in
restricted cash requirements associated with the notes. The decrease for the BLM
Partnership was offset by a decrease in capital expenditures for 2003.

     Net cash from financing activities for the Navy I Partnerships increased in
2004, as compared to 2003, primarily due to a decrease in partner  distributions
in 2004 and a reduction in the debt  service  payment.  Net cash from  financing
activities for the BLM and Navy II  Partnerships  decreased in 2004, as compared
to 2003,  due to an increase in debt  service  payments  and  increased  partner
distributions  for the Navy II  Partnership  but  partially  offset by decreased
partner  distributions  for the BLM  Partnership.  Net cash flow from  financing
activities  for the Coso  Partnerships  increased  in 2003 as  compared  to 2002
primarily due to a decrease in partner distributions in 2003.


The following is a summary of the Coso Partnerships' material contractual
obligations (in millions):
<TABLE>
<CAPTION>
                                                          Less than        2-3           4-5          More than
        Contractual Obligations                Total        1 Year        Years         Years          5 Years
        -----------------------                -----        ------        -----         -----          -------
<S>                                        <C>           <C>          <C>           <C>             <C>
 Project Loans.....................         $ 222,279     $  35,480    $  85,705     $ 101,094       $      ---
 Interest on the Project Loans.....            60,282        19,474       28,794        12,014              ---
 Operation & Maintenance Payments..             5,115         1,107        2,004         2,004              ---
 Other long-term obligations.......             3,262           595        1,264         1,403              ---
                                              -------        ------      -------       -------          -------
                                            $ 290,938     $  56,061    $ 116,503     $ 115,112       $      ---
</TABLE>

     The project loans were issued under an indenture dated May 28, 1999 between
Funding Corp. and the trustee, U.S. Bank Trust NA. (see Item 8).

     Other long-term  obligations relate to Unit 1 at Navy 1, whereby the Navy I
Partnership  is  obligated  to pay the U.S.  Navy the sum of  $18.0  million  on
December 31, 2009.  Payment of the  obligation  will be made from an established
sinking  fund which the Navy I  Partnership  has been  making  payments to since
1987.  That  payment is secured by the  existing  funds on deposit so that funds
plus accrued  interest are expected to aggregate  $18.0  million by December 31,
2009.


Critical Accounting Policies and Estimates

     Preparation   of  this  Annual  Report  on  Form  10-K  requires  the  Coso
Partnerships to make estimates and  assumptions  that affect the reported amount
of assets and  liabilities,  disclosure of contingent  assets and liabilities at
the  date of the  Coso  Partnerships'  financial  statements,  and the  reported
amounts  of  revenue  and  expenses  during  the  reporting  period.   The  Coso
Partnerships'  critical  accounting  policies,  including  the  assumptions  and
judgments   underlying  them,  are  disclosed  under  the  caption  "Summary  of
Significant  Accounting  Policies"  under  Item  8.  These  policies  have  been
consistently   applied  and  address  such   matters  as  revenue   recognition,
depreciation methods and asset impairment recognition. While policies associated
with  estimates  and  judgments  may be  affected  by  different  assumption  or
condition,   the  Coso  Partnerships'   believes  its  estimates  and  judgments
associated with the reported amounts are appropriate.  Actual results may differ
from those estimates.

     The  Company  considers  the  policies  discussed  below as  critical to an
understanding of the Coso Partnerships'  financial  statements as application of
these policies places the most  significant  demands on  management's  judgment,
with financial  reporting  results relying on the estimation of matters that are
uncertain.

     Accounts  Receivable  and  Revenue  Recognition  - Operating  revenues  are
recognized  as income  during the period in which  electricity  is  delivered to
Edison. In the event that Edison is not able to make payment on amounts due, and
collection is not reasonably assured,  the Coso Partnerships' will not recognize
revenue for energy delivered, until payment is collected.

                                       17

     In the event that the PPC's are  amended the Coso  Partnerships  accounting
policies  would be modified  in  accordance  with the  guidance  established  in
Emerging Issues Task Force (EITF) 91-6, "Revenue  Recognition of Long-Term Power
Sales Contract" and EITF 01-8,  "Determining  Whether an Arrangement  Contains a
Lease".

     Revenue for capacity  payments are recognized at the end of each month that
capacity is provided  under the PPC's when  collection  is  reasonably  assured.
Revenue  for bonus  payments  are  recognized  at the end of each month in which
actual energy delivered exceeds 85% of the plant capacity stated in the PPC's.

     Impairment of Long-Lived  Assets - Recoverability  of assets to be held and
used is measured by a comparison of the carrying amount of an asset to estimated
undiscounted  future cash flows  expected to be generated  by the asset.  If the
carrying  amount  of an asset  exceeds  its  estimated  future  cash  flows,  an
impairment  charge is recognized  by the amount by which the carrying  amount of
the asset exceeds the fair value of the asset.

     Asset  Retirement  Obligations - The fair value of a liability for an asset
retirement obligation should be recognized in the period in which it is incurred
if a  reasonable  estimate  of fair  value  can be made.  The  associated  asset
retirement  costs should be  capitalized  as part of the carrying  amount of the
long-lived  asset.  This policy was applied to the financial  statements for the
Coso Partnerships' for the fiscal year beginning January 1, 2003.


Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.

          None.


Item 8.   Financial Statements and Supplementary Data.

                        CAITHNESS COSO FUNDING CORP. AND
                           COSO OPERATING PARTNERSHIPS

                                           Index                           Page
                                           -----                           ----

Caithness Coso Funding Corp:
----------------------------
KPMG LLP Report of Independent Registered Public Accounting Firm           F-1
Balance Sheets as of December 31, 2004 and 2003                            F-2
Statements of Income for the years ended
   December 31, 2004, 2003 and 2002                                        F-3
Statements of Cash Flows for the years
   ended December 31, 2004, 2003 and 2002                                  F-4
Notes to Financial Statements                                              F-5

Coso Finance Partners and Subsidiary:
-------------------------------------
KPMG LLP Report of Independent Registered Public Accounting Firm           F-6
Consolidated Balance Sheets as of December 31, 2004 and 2003               F-7
Consolidated Statements of Operations for the years ended
   December 31, 2004, 2003 and 2002                                        F-8
Consolidated Statements of Partners' Capital for the years ended
   December 31, 2004, 2003 and 2002                                        F-9
Consolidated Statements of Cash Flows for the years
   ended December 31, 2004, 2003 and 2002                                  F-10
Notes to Consolidated Financial Statements                                 F-11

Coso Energy Developers:
-----------------------
KPMG LLP Report of Independent Registered Public Accounting Firm           F-12
Balance Sheets as of December 31, 2004 and 2003                            F-13
Statements of Operations for the years ended
   December 31, 2004, 2003 and 2002                                        F-14
Statements of Partners' Capital for the years ended
   December 31, 2004, 2003 and 2002                                        F-15
Statements of Cash Flows for the years
   ended December 31, 2004, 2003 and 2002                                  F-16
Notes to Financial Statements                                              F-17

Coso Power Developers and Subsidiary:
-------------------------------------
KPMG LLP Report of Independent Registered Public Accounting Firm           F-18
Consolidated Balance Sheets as of December 31, 2004 and 2003               F-19
Consolidated Statements of Operations for the years ended
   December 31, 2004, 2003 and 2002                                        F-20
Consolidated Statements of Partners' Capital for the years ended
   December 31, 2004, 2003 and 2002                                        F-21
Consolidated Statements of Cash Flows for the years
   ended December 31, 2004, 2003 and 2002                                  F-22
Notes to Consolidated Financial Statements                                 F-23

Supplemental Consolidated Unaudited Condensed quarterly Financial
information for 2004, 2003 and 2002                                        F-24

Coso Partnerships and Subsidiary:
---------------------------------
Supplemental Consolidated Condensed Combined Financial
   Information for the Coso Partnerships:
Unaudited Consolidated Condensed Combined Balance Sheets as
   of December 31, 2004 and 2003                                           F-25
Unaudited Consolidated Condensed Combined Statements of
   Operations for the years ended
   December 31, 2004, 2003 and 2002                                        F-26
Unaudited Consolidated Condensed Combined Statements of
   Cash Flows for the years ended
   December 31, 2004, 2003 and 2002                                        F-27
Notes to the Unaudited Consolidated Condensed Combined
   Financial Statements                                                    F-28

<PAGE>
             Report of Independent Registered Public Accounting Firm



Caithness Coso Funding Corp.:


We have audited the accompanying  balance sheets of Caithness Coso Funding Corp.
as of December 31,  2004 and 2003, and the related statements of income and cash
flows for each of the years in the three-year  period ended  December 31,  2004.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Caithness Coso Funding Corp. as
of  December 31,  2004 and 2003,  and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 2004, in
conformity with U.S. generally accepted accounting principles.




March 17, 2005
New York, New York

/s/ KPMG, LLP
-------------
    KPMG, LLP



                                      F-1
<PAGE>
                                                    CAITHNESS COSO FUNDING CORP.

                                                           Balance Sheets

                                                     December 31, 2004 and 2003

                                                       (Dollars in thousands)
<TABLE>
<CAPTION>

                 Assets                                                     2004                  2003
                                                                        ------------          ------------
<S>                                                                    <C>                   <C>
Current assets:
  Accrued interest receivable                                       $         883                 1,008
  Current portion of Project loan from Coso Finance Partners               15,100                10,694
  Current portion of Project loan from Coso Energy Developers               8,683                 9,920
  Current portion of Project loan from Coso Power Developers               11,697                10,718
                                                                        ------------          ------------
               Total current assets                                        36,363                32,340

Project loan from Coso Finance Partners                                    71,750                86,853
Project loan from Coso Energy Developers                                   66,217                74,901
Project loan from Coso Power Developers                                    48,830                60,528
                                                                        ------------          ------------

               Total assets                                         $     223,160               254,622
                                                                        ============          ============

                 Liabilities and Stockholders' Equity

Current liabilities:
  Senior secured notes:
     Accrued interest payable                                       $         883                 1,008
     Current portion on project loans                                      35,480                31,332
                                                                        ------------          ------------
               Total current liabilities                                   36,363                32,340

9.05% notes due December 15, 2009                                         186,797               222,282
Stockholders' equity (note 5)                                                  --                    --
                                                                        ------------          ------------

               Total liabilities and stockholders' equity           $     223,160               254,622
                                                                        ============          ============
</TABLE>

See accompanying notes to financial statements.




                                                                F-2

<PAGE>
<TABLE>
<CAPTION>
                                                CAITHNESS COSO FUNDING CORP.

                                                    Statements of Income

                                        Years ended December 31, 2004, 2003, and 2002

                                                   (Dollars in thousands)



                                                                     2004                  2003                  2002
                                                                --------------        --------------        --------------
<S>                                                            <C>                       <C>                   <C>
Revenue:
     Interest income                                        $        22,260               24,828                26,931

Expense:
     Interest expense                                               (22,260)             (24,828)              (26,931)
                                                                 --------------       --------------        --------------

             Net income                                     $           --                   --                    --
                                                                 ==============       ==============        ==============
</TABLE>

See accompanying notes to financial statements.





                                                               F-3

<PAGE>
<TABLE>
<CAPTION>
                                                  CAITHNESS COSO FUNDING CORP.

                                                    Statements of Cash Flows

                                          Years ended December 31, 2004, 2003, and 2002

                                                     (Dollars in thousands)



                                                                    2004                   2003                 2002
                                                               ---------------       ---------------       ---------------
<S>                                                            <C>                   <C>                   <C>
Cash flows from investing activities - repayment
  of project loans                                        $        31,462                 27,739                21,864
                                                               ---------------       ---------------       ---------------

Cash flows from financing activities - repayment
  of 9.05% notes                                                  (31,462)               (27,739)              (21,864)
                                                               ---------------       ---------------       ---------------
             Net changes in cash                                      --                     --                    --

Cash at beginning of year                                             --                     --                    --
                                                               ---------------       ---------------       ---------------

Cash at end of year                                       $           --                     --                    --
                                                               ===============       ===============       ===============
Supplemental cash flow disclosures:
     Interest paid                                        $        22,385                 24,950                27,026
</TABLE>


See accompanying notes to financial statements.

                                                                F-4
<PAGE>
                          CAITHNESS COSO FUNDING CORP.

                          Notes to Financial Statements

                        December 31, 2004, 2003, and 2002

                             (Dollars in thousands)



(1)  Organization of the Corporation

     Caithness Coso Funding Corp.  (Funding Corp.),  which was  incorporated  on
     April 22,  1999, is a single purpose Delaware  corporation  formed to issue
     senior  secured notes (Notes) for its own account and as an agent acting on
     behalf of Coso Finance Partners (CFP),  Coso Energy  Developers  (CED), and
     Coso  Power  Developers  (CPD),   collectively,   the  "Partnerships."  The
     Partnerships are California general partnerships.

     On May 28,  1999,  Funding  Corp.  sold  $413,000  of Notes  (see  note 4).
     Pursuant to separate  credit  agreements  between  Funding  Corp.  and each
     partnership (Credit Agreements),  the net proceeds from the offering of the
     Notes were loaned to the Partnerships. Payment of the Notes is provided for
     by payments made by the Partnerships  under their respective  project loans
     (see note 3).  Funding Corp. has no material assets, other than the project
     loans,  and does not conduct any  operations  apart from having  issued the
     Notes and making the project loans to the Partnerships.

(2)  Summary of Significant Accounting Policies

     Use of Estimates

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

     Fair Value of Financial Instruments

     Based on quoted  market  rates of the Notes,  the fair value of the project
     loans and underlying Notes as of December 31, 2004 and 2003 is $247,706 and
     $253,614, respectively.

(3)  Project Loans to the Partnerships

     Pursuant to each Credit Agreement, each partnership shall make project loan
     payments in scheduled  installment  amounts which,  in the  aggregate,  are
     sufficient to enable Funding Corp. to pay scheduled  principal and interest
     on the Notes (see note 4).

     The Notes are general  obligations  of Funding  Corp.,  and are secured and
     perfected by: (1) first  priority pledge of the promissory notes evidencing
     each Partnership's obligation to repay the loan; (2) first priority lien on
     the  funds in the debt  service  cash  accounts  of the  Partnerships;  and
     (3) first  priority  pledge  of all of the  outstanding  capital  stock  of
     Funding  Corp.  These  obligations  are  unconditionally  guaranteed by the
     Partnerships and are secured and perfected by  substantially  all assets of
     the  Partnerships  and the equity  interests in the  Partnerships.  Funding
     Corp., CPD, CED, and CFP are jointly and severally liable for the repayment
     of the Notes.

(4)  Senior Secured Notes

     On May 28,  1999, Funding Corp.  completed a $413,000  underwritten  public
     debt  offering  consisting  of  $110,000  6.8%  Notes due and paid 2001 and
     $303,000  9.05% Notes due 2009.  The Notes were issued  under an  indenture
     dated as of May 28,  1999 between Funding Corp. and the trustee,  U.S. Bank
     Trust N.A.

     Payment  of the  Notes  is  provided  for by  payments  to be  made  by the
     Partnerships on their  respective  project loans (see note 3).  Interest is
     payable each June 15 and December 15.

     The  annual  maturity  of the  $303,000  9.05%  Notes for each year  ending
     December 31 is as follows:

                                                  Amount
                                               ------------
                      2005                  $     35,480
                      2006                        38,286
                      2007                        47,419
                      2008                        49,261
                      2009                        51,831
                                               ------------
                                            $    222,277
                                               ============

     The Note indentures contain certain restrictive covenants that, among other
     things, limit the ability to incur additional  indebtedness,  release funds
     from reserve accounts, make distributions, create loans, and enter into any
     transaction, merger, or consolidation.

(5)  Stockholders' Equity

     Funding Corp. is authorized to issue 1,000 shares of common stock, one cent
     par value per share.  Upon  incorporating  in 1999,  Funding  Corp.  issued
     100 common shares each to CFP, CED, and CPD.

(6)  Risks and Uncertainties

     The Partnerships  sell 100% of the electrical  energy generated to Southern
     California  Edison (Edison) under long-term power purchase  contracts,  and
     are  significantly  impacted  by risks  beyond  their  control.  Among  the
     important factors that could cause actual results to differ materially from
     those anticipated  include,  but are not limited to: (i) risks  relating to
     the  uncertainties  in the  California  energy market,  (ii) the  financial
     viability of Edison,  (iii) risks related to the operation of power plants,
     (iv) the impact of avoided cost pricing along with other pricing variables,
     (v) general operating risks, including resource availability and regulatory
     oversight,  (vi) changes  in government  regulations,  (vii) the effects of
     competition,  (viii) the  alleged  manipulation  of the  California  energy
     market,  and  (ix)  acts of  terrorism  directed  at the  project  or other
     facilities affecting the normal course of business.




                                      F-5
<PAGE>

            Report of Independent Registered Public Accounting Firm



The Partners and Management Committee
Coso Finance Partners and subsidiary:


We have audited the  accompanying  consolidated  balance  sheets of Coso Finance
Partners and subsidiary (the Partnership) as of December 31,  2004 and 2003, and
the related consolidated  statements of operations,  partners' capital, and cash
flows for each of the years in the three-year  period ended  December 31,  2004.
These   consolidated   financial   statements  are  the  responsibility  of  the
Partnership's  management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position  of Coso  Finance
Partners and  subsidiary as of  December 31,  2004 and 2003,  and the results of
their  operations  and their cash flows for each of the years in the  three-year
period  ended  December 31,  2004 in  conformity  with U.S.  generally  accepted
accounting principles.

As discussed in note 2 to the financial statements,  effective January 1,  2004,
the  Partnership  retroactively  adopted the provisions of Financial  Accounting
Standards Board Interpretation No. 46 (revised December 2003),  Consolidation of
Variable Interest Entities by restating the 2003 and 2002 consolidated financial
statements and effective January 1,  2003 the Partnership adopted the provisions
of Statement of Financial  Accounting  Standards  No. 143,  Accounting for Asset
Retirement Obligations.





March 17, 2005
New York, New York

/s/ KPMG, LLP
-------------
    KPMG, LLP



                                      F-6
<PAGE>
                                                     COSO FINANCE PARTNERS
                                                         AND SUBSIDIARY

                                                  Consolidated Balance Sheets

                                                   December 31, 2004 and 2003

                                                     (Dollars in thousands)
<TABLE>
<CAPTION>
                  Assets                                                          2004                  2003
                                                                             ---------------       ---------------

<S>                                                                      <C>                    <C>
Current assets:
  Cash                                                                   $           791                 1,454
  Restricted cash and cash equivalents (note 2)                                   13,298                11,408
  Accounts receivable (net of allowances of $216) (note 2)                         7,502                 6,925
  Prepaid expenses and other assets                                                  702                   872
  Inventory                                                                        5,357                 5,270
  Amounts due from related parties (note 7)                                        1,583                 1,525
                                                                             --------------        ---------------
              Total current assets                                                29,233                27,454

Restricted cash and investments (notes 2 and 11)                                  14,894                13,249
Property, plant, and equipment, net (note 4)                                     133,624               135,871
Power purchase contract, net (note 2)                                              7,650                 8,798
Deferred financing costs, net (note 2)                                             1,578                 1,893
                                                                             ---------------       ---------------

              Total assets                                                $      186,979               187,265
                                                                             ===============       ===============

                  Liabilities and Partners' Capital

Current liabilities:
  Accounts payable and accrued liabilities (note 8)                       $        4,601                 4,503
  Amounts due to related parties (note 7)                                            606                   474
  Current portion of project loan (note 6)                                        15,100                10,694
                                                                             ---------------       ---------------
              Total current liabilities                                           20,307                15,671

Other liabilities (notes 2 and 5)                                                 15,648                15,603
Amounts due to related parties (note 7)                                            2,382                 2,462
Project loan (note 6)                                                             71,750                86,853
                                                                             ---------------       ---------------

              Total liabilities                                                  110,087               120,589

Commitments and contingencies (notes 5, 6, and 11)

Partners' capital                                                                 76,892                66,676
                                                                             ---------------       ---------------

              Total liabilities and partners' capital                     $      186,979               187,265
                                                                             ===============       ===============
</TABLE>

See accompanying notes to consolidated financial statements.





                                                                F-7
<PAGE>
<TABLE>
<CAPTION>
                                                    COSO FINANCE PARTNERS
                                                       AND SUBSIDIARY

                                            Consolidated Statements of Operations

                                        Years ended December 31, 2004, 2003, and 2002

                                                   (Dollars in thousands)



                                                                 2004                  2003                  2002
                                                           ------------------    ------------------    ------------------
<S>                                                       <C>                   <C>                   <C>
Revenue:
  Energy revenues (notes 2, 7, and 11)                    $      46,307                45,526                75,906
  Capacity and bonus payments                                    14,237                14,266                16,159

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

              Total revenue                                      60,544                59,792                92,065
                                                           ------------------    ------------------    ------------------

Operating expenses:
  Plant operating expenses (note 3)                              10,955                10,159                 9,837
  Royalty expense (note 5)                                       12,747                13,081                12,914
  Depreciation and amortization                                  11,453                10,797                10,766
                                                           ------------------    ------------------    ------------------

              Total operating expenses                           35,155                34,037                33,517
                                                           ------------------    ------------------    ------------------

              Operating income                                   25,389                25,755                58,548
                                                           ------------------    ------------------    ------------------

Other (income) expenses:
  Interest and other income (note 2)                             (2,491)               (1,782)               (1,715)
  Interest expense on project loan                                8,592                 9,738                10,836
  Noncash interest expense                                          315                   315                   315
                                                           ------------------    ------------------    ------------------

              Total other expenses                                6,416                 8,271                 9,436
                                                           ------------------    ------------------    ------------------

Income before cumulative effect of
  change in accounting principle                                 18,973                17,484                49,112

Cumulative effect of  cahnge in accounting
  principle (note 2)                                                 --                 1,780                    --
                                                           ------------------    ------------------    ------------------


              Net income                                  $      18,973                15,704                49,112
                                                           ==================    ==================    ==================
</TABLE>

See accompanying notes to consolidated financial statements.





                                                              F-8


<PAGE>
<TABLE>
<CAPTION>
                                                    COSO FINANCE PARTNERS
                                                       AND SUBSIDIARY

                                         Consolidated Statements of Partner's Capital

                                        Years ended December 31, 2004, 2003, and 2002

                                                   (Dollars in thousands)



                                                                                   New CLOC
                                                                ESCA               Company,
                                                                 LLC                  LLC                 Total
                                                          ------------------   ------------------   -------------------
<S>                                                       <C>                  <C>                  <C>
Balance at December 31, 2001                              $     29,584               22,841                52,425

Net income                                                      26,324               22,788                49,112

Distributions to partners                                      (19,365)             (16,764)              (36,129)
                                                          ------------------   ------------------   -------------------

Balance at December 31, 2002                                    36,543               28,865                65,408

Net income                                                       8,417                7,287                15,704

Distributions to partners                                       (7,738)              (6,698)              (14,436)
                                                          ------------------   ------------------   -------------------

Balance at December 31, 2003                                    37,222               29,454                66,676

Net income                                                      10,170                8,803                18,973

Distributions to partners                                       (4,694)              (4,063)               (8,757)
                                                          ------------------   ------------------   -------------------

Balance at December 31, 2004                              $     42,698               34,194                76,892
                                                          ==================   ==================   ===================
</TABLE>

See accompanying notes to consolidated financial statements.





                                                                F-9
<PAGE>
<TABLE>
<CAPTION>
                                                     COSO FINANCE PARTNERS
                                                        AND SUBSIDIARY

                                             Consolidated Statements of Cash Flows

                                         Years ended December 31, 2004, 2003, and 2002

                                                    (Dollars in thousands)



                                                                     2004                 2003                 2002
                                                               ------------------   -----------------    -----------------
<S>                                                            <C>                  <C>                  <C>
Cash flows from operating activities:
  Net income                                                   $     18,973              15,704               49,112
  Adjustments to reconcile net income to net
    cash provided by operating activities:
       Depreciation and amortization                                 11,453              10,797               10,766
       Noncash interest expense                                         315                 315                  315
       Noncash plant operating expense                                  202                 204                   --
       Provision for doubtful account                                    --                 216                   --
       Cumulative effect of change in
         accounting principle                                            --               1,780                   --
       Changes in operating assets and liabilities:
         Accounts receivable, prepaid expenses,
           and other assets                                            (494)                432               (4,345)
         Accounts payable and accrued liabilities                        98              (1,364)                (625)
         Amounts due from related parties                               (58)                (96)               8,172
         Amounts due to related parties                                  52                (116)                (212)
         Other                                                           72                 882                1,380
                                                               ------------------   -----------------    -----------------
           Net cash provided by operating activities                 30,613              28,754               64,563
                                                               ------------------   -----------------    -----------------
Cash flows from investing activities:
  Capital expenditures                                               (8,287)             (7,765)              (5,462)
  Decrease (increase) in restricted cash                             (3,535)              4,035               (7,367)
                                                               ------------------   -----------------    -----------------
           Net cash provided by investing activities                (11,822)             (3,730)             (12,829)
                                                               ------------------   -----------------    -----------------
Cash flows from financing activities:
  Distributions to partners                                          (8,757)            (14,436)             (36,129)
  Repayment of project financing loans                              (10,697)            (13,408)             (11,595)
                                                               ------------------   -----------------    -----------------

           Net cash used in financing activities                    (19,454)            (27,844)             (47,724)
                                                               ------------------   -----------------    -----------------

           Net change in cash                                          (663)             (2,820)               4,010

Cash at beginning of year                                             1,454               4,274                  264
                                                               ------------------   -----------------    -----------------

Cash at end of year                                            $        791               1,454                4,274
                                                               ==================   =================    =================

Supplemental cash flow disclosure:
  Cash paid for interest                                       $      8,634               9,798               10,880
</TABLE>


See accompanying notes to consolidated financial statements.





                                                              F-10
<PAGE>

                              COSO FINANCE PARTNERS
                                 AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2004, 2003, and 2002

                             (Dollars in thousands)



(1)  Organization, Operation, and Business of the Partnership

     Coso Finance Partners (CFP), a California general  partnership,  was formed
     on July 7, 1987 to refinance and construct a geothermal power plant on land
     at the China Lake Naval Air Weapons Station, Coso Hot Springs,  China Lake,
     California.  CFP is a general partnership owned by ESCA, LLC (ESCA) and New
     CLOC Company, LLC (New CLOC), both Delaware limited liability companies.

     The power plant is located on land owned by the United  States Navy (Navy).
     Under the terms of that contract, CFP develops geothermal energy and pays a
     royalty to the Navy (see note 5).

     CFP sells all electricity  produced to Southern  California Edison (Edison)
     under a 24-year power purchase  contract (PPC) expiring in 2011.  Under the
     terms of the PPC, Edison makes payments to CFP as follows:

     *    Contractual payments for energy delivered escalated at an average rate
          of  approximately  7.6% for the first ten years after the date of firm
          operation (scheduled energy price period).  After the scheduled energy
          price period, the energy payment adjusted to the actual avoided energy
          cost  experienced by Edison.  In August 1997,  CFP completed the first
          ten-year  period.  At that time,  Edison  ceased  paying the scheduled
          energy rates.  Edison entered into an agreement  (the Agreement)  with
          CFP on  June 19,  2001 that  addressed  renewable  energy  pricing and
          issues concerning California's energy crisis. The Agreement, which was
          amended on November 30, 2001, established May 1, 2002 as the date from
          which CFP  receives a fixed  energy rate of  5.37 cents  per  kilowatt
          (kWh) for five (5) years. From January 1, 2002 through April 30, 2002,
          CFP elected to receive  from Edison a fixed  energy rate of 3.25 cents
          per kWh.  The  average  rate of energy paid to CFP for the years ended
          December 31,  2004,  2003, and 2002 was 5.37, 5.37, and 4.66 cents per
          kWh, respectively.  Subsequent to the five-year period, Edison will be
          required to make energy  payments to CFP based on its avoided  cost of
          energy until the PPC expires.  Beyond the five-year period, CFP cannot
          predict the likely  level of avoided  cost of energy  prices under the
          PPC and,  accordingly,  the revenues  generated by CFP could fluctuate
          significantly;

     *    Capacity  payments  which remain fixed over the life of the PPC to the
          extent that actual  energy  delivered  exceeds  minimum  levels of the
          plant capacity defined in the PPC; and

     *    Bonus payments to the extent that actual energy delivered  exceeds 85%
          of the plant capacity are calculated  monthly as stated in the PPC. In
          2004, 2003, and 2002, the bonus payments  aggregated  $2,147,  $2,176,
          and $2,176, respectively.

     Coso Operating Company, LLC (COC), an affiliated Delaware limited liability
     company, provides for the operation and maintenance of the geothermal power
     facilities and  administrative  services  pursuant to certain operation and
     maintenance  agreements  with New CLOC, the managing  general  partner (see
     note 7).

     The  partnership  agreement  provides  for  distributable  cash  flow to be
     allocated 53.6% and 46.4% to ESCA and New CLOC, respectively.  For purposes
     of allocating net income to partners' capital accounts,  profits and losses
     are allocated based on the aforementioned cash flow percentages. For income
     tax  purposes,  certain  deductions  and  credits  are  subject  to special
     allocations as defined in the partnership agreements.

(2)  Summary of Significant Accounting Policies

     Consolidation

     The  accompanying  consolidated  financial  statements  include the assets,
     liability,   income,  and  expenses  of  CFP  and  its  majority-controlled
     subsidiary New CLPSI Company,  LLC  (collectively,  the Partnership),  (see
     note 3).  Intercompany  balances and transactions have been eliminated upon
     consolidation.

     The  consolidated  financial  statements  include the accounts of New CLPSI
     Company,  LLC  (CLPSI)  as a  result  of  the  adoption  of  the  Financial
     Accounting   Standards   Board  (FASB)   Interpretation   No. 46   (revised
     December 2003),  (FIN 46R) Consolidation of Variable Interest Entities,  an
     interpretation  of Accounting  Research Bulletin No. 51. An entity shall be
     subject to  consolidation  according to the  provisions of FIN 46R,  if, by
     design,  the holders of the equity  investment  at risk lack any one of the
     following  three  characteristics  of  a  controlling  financial  interest:
     (1) the  direct or  indirect  ability to make  decisions  about an entity's
     activities  through voting rights or similar rights;  (2) the obligation to
     absorb the expected losses of the entity if they occur; or (3) the right to
     receive the  expected  residual  returns of the entity if they  occur.  The
     Company  determined that CLPSI is a variable  interest entity under FIN 46R
     and  was  consolidated,  effective  January 1,  2004.  The  effects  on the
     Partnership's   consolidated  financial  statements  for  the  years  ended
     December 31,  2004 and 2003,  were increases of $2,429 and $2,465 to assets
     and liabilities, respectively.

     The consolidated  financial  statements relating to prior periods have been
     retroactively  restated to  consolidate  the  accounts of CLPSI as a direct
     result of the adoption of FIN 46R. There was no cumulative  effect recorded
     upon the adoption of the Interpretation.

     Accounts Receivable and Revenue Recognition

     Accounts  receivable  primarily  consist  of  receivables  from  Edison for
     electricity delivered and sold under the PPC. As of December 31,  2003, the
     Partnership  established an allowance for doubtful  accounts of $216, based
     on a dispute with Edison  regarding a payment for capacity.  In October and
     November,  Edison limited generation to complete their transmission  system
     maintenance resulting in lower capacity payments. CFP is disputing Edison's
     claim that the forced  reduction in generation  was the result of scheduled
     maintenance  which permits Edison to discount the capacity  payment to CFP.
     In addition, the Navy reimbursed CFP under the existing Navy Contract which
     terminated on November 1,  2004, for electricity paid on its behalf through
     October 31,  2004  (see note 5).  As of  December 31,  2004 and  2003,  the
     balance due from the Navy was $701 and $732, respectively,  and is included
     in accrued liabilities offsetting the royalty payable to the Navy (see note
     5).

     Operating  revenues  are  recognized  as income  during the period in which
     electricity  is delivered to Edison.  Revenue was  recognized  based on the
     payment rates scheduled in CFP's PPC with Edison through August 1997.  From
     August 1997  through  December 31,  2001,  except for the period January 1,
     2002 through  May 31,  2007, as discussed in note 1,  revenue is recognized
     based on Edison's avoided energy cost until CFP's PPC expires.

     Periodic  increases in natural gas prices and imbalances between supply and
     demand, among other factors,  have at times led to significant increases in
     wholesale  electricity prices in California.  During those periods,  Edison
     had fixed tariffs with its retail customers that were  significantly  below
     the wholesale  prices it paid in  California.  That resulted in significant
     under-recoveries   by  Edison  of  its   electricity   purchase  costs.  On
     January 16,  2001,  Edison  announced  that it was  temporarily  suspending
     payments  for  energy  provided,  including  the  energy  provided  by  the
     Partnership,   pending  a  permanent  solution  to  its  liquidity  crisis.
     Subsequently,  pursuant to a California Public Utilities  Commission (CPUC)
     order,  Edison resumed making  payments to the  Partnership  beginning with
     power generated on March 27,  2001. Edison also made a payment equal to 10%
     of the  unpaid  balance  for  power  generated  from  November 1,  2000  to
     March 26,  2001,  and paid  interest  on the  outstanding  amount at 7% per
     annum.  That payment was made pursuant to the Agreement  between Edison and
     CFP described in note 1.  The  Agreement,  as amended,  which received CPUC
     approval in  January 2002,  established  the fixed energy  rates  discussed
     above and set payment terms for past due amounts owed to the Partnership by
     Edison. Due to the uncertainty surrounding Edison's ability to make payment
     on  past  due  amounts,  collection  was  not  reasonably  assured  and the
     Partnership  did not  recognize  revenue of $37,253  from Edison for energy
     delivered during the period  November 1,  2000 through  March 26,  2001. On
     March 1,  2002,  Edison reached certain  financing  milestones and paid the
     Partnership $37,253 for electricity generated during the period November 1,
     2000 through March 26,  2001. The Partnership  recognized  revenue for such
     electricity deliveries in March 2002.

     Revenue for capacity  payments is  recognized at the end of each month that
     capacity is provided under the PPC when  collection is reasonably  assured.
     Revenue for bonus  payments is recognized at the end of each month in which
     actual energy  delivered  exceeds 85% of the plant  capacity  stated in the
     PPC.

     In the event that the PPC is amended the Partnership's  accounting policies
     would be modified in accordance  with the guidance  established in Emerging
     Issues Task Force (EITF) 91-6, Revenue Recognition of Long-Term Power Sales
     Contract  and  EITF 01-8,  Determining  Whether an  Arrangement  Contains a
     Lease.

     Fixed Assets and Depreciation

     The  costs  of major  additions  and  betterments  are  capitalized,  while
     replacements,  maintenance,  and repairs which do not improve or extend the
     lives of the respective assets are expensed as incurred.

     Depreciation of the operating power plant and transmission line is computed
     on a straight-line basis over their estimated useful lives of 30 years and,
     for significant additions,  the shorter of the useful life or the remainder
     of the 30-year life from the plant's commencement of operations.

     Wells and Resource Development Costs

     Wells and resource  development  costs include costs incurred in connection
     with the  exploration  and  development of geothermal  resources.  All such
     costs,  which  include dry hole costs,  the cost of drilling and  equipping
     production   wells,   and   administrative   and  interest  costs  directly
     attributable  to the project,  are  capitalized  and  amortized  over their
     estimated  useful lives when  production  commences.  The estimated  useful
     lives  of  production  wells  are 10  years  each;  exploration  costs  and
     development costs, other than production wells, are amortized over 30 years
     and,  for  significant  additions,  the  shorter of the useful  life or the
     remainder of the 30-year life from the plant's commencement of operations.

     Deferred Plant Overhaul Costs and Well Rework Costs

     Plant overhaul  costs are deferred and amortized over the estimated  period
     between overhauls, as these costs extend the useful lives of the respective
     assets. These deferred costs of $625 and $58 at December 31, 2004 and 2003,
     respectively,  are included in property,  plant, and equipment.  Currently,
     plant  overhauls are  amortized  over three to four years from the point of
     completion.

     Production and injection rework costs included in plant operating  expenses
     are expensed as incurred. For the years ended December 31,  2004, 2003, and
     2002, such costs were $1,998, $577, and $305, respectively.

     Impairment of Long-Lived Assets

     Long-lived assets,  such as property,  plant, and equipment,  and purchased
     intangibles  subject to amortization,  are reviewed for impairment whenever
     events or changes in circumstances  indicate that the carrying amount of an
     asset may not be recoverable.  Recoverability of assets to be held and used
     is measured by a comparison of the carrying amount of an asset to estimated
     undiscounted  future cash flows  expected to be generated by the asset.  If
     the carrying amount of an asset exceeds its estimated future cash flows, an
     impairment  charge is recognized by the amount by which the carrying amount
     of the asset exceeds the fair value of the asset.  Assets to be disposed of
     would  be  separately  presented  in the  consolidated  balance  sheet  and
     reported  at the lower of the  carrying  amount or fair value less costs to
     sell,  and are no longer  depreciated.  The  assets  and  liabilities  of a
     disposed group classified as held for sale would be presented separately in
     the appropriate  asset and liability  sections of the consolidated  balance
     sheet.

     Deferred Financing Costs

     Deferred  financing costs as of December 31,  2004 and 2003 consist of loan
     fees and other costs of financing  that are amortized  over the term of the
     related  financing.  Annual  amortization  of the deferred  financing costs
     included in noncash interest expense is $315.  Accumulated  amortization at
     December 31, 2004 and 2003 was $2,543 and $2,228, respectively.

     Power Purchase Contract

     The PPC,  which is amortized on a  straight-line  basis over the  remaining
     term of the PPC,  will expire in 2011.  Annual  amortization  of the PPC is
     $1,147.  The PPC  consists  of a gross  carrying  amount  of  $14,344,  and
     accumulated  amortization  at  December 31,  2004 and 2003 was  $6,694  and
     $5,546, respectively.

     Income Taxes

     There  is  no  provision   for  income  taxes  since  such  taxes  are  the
     responsibility  of the partners.  The net difference  between the tax bases
     and  the  reported  amounts  of  property,  plant,  and  equipment,  net at
     December 31, 2004 and 2003 was $123,159 and $133,507, respectively.

     Cash Equivalents

     For purposes of the statements of cash flows, the Partnership considers all
     money market instruments  purchased with initial maturities of three months
     or less to be cash equivalents.

     Restricted Cash and Investments

     Restricted cash and investments include a capital expenditure reserve and a
     sinking fund related to a lump-sum royalty payment of $18,000 to be paid to
     the Navy on December 31,  2009 (see note 5) totaling $14,738 and $13,093 at
     December 31, 2004 and 2003, respectively. The monthly amount deposited into
     the  sinking  fund was  approximately  $111 through  October 31,  2004.  At
     December 31,  2004 and 2003,  the sinking fund account  includes  $7,293 of
     various  mortgage-backed  securities  with  maturities  in 2009  and  2007,
     respectively.  These  mortgage-backed  securities are classified as held to
     maturity and reported at amortized  cost, and mature as follows:  $1,620 on
     October 24,  2007, $480 on November 5, 2007, and $5,193 on August 15, 2009.
     Restricted cash and investments also include a debt service reserve for the
     project  debt  service  required  by the  project  loan  (see note 6).  The
     carrying amount of restricted cash and investments at December 31, 2004 and
     2003  approximated  fair value,  which is based on quoted  market prices as
     provided by the financial institution which holds the investments.

     Use of Estimates

     The  preparation of  consolidated  financial  statements in conformity with
     U.S. generally accepted  accounting  principles requires management to make
     estimates  and  assumptions  that  affect the  reported  amounts of assets,
     liabilities,  and partners' capital and disclosure of contingent assets and
     liabilities at the date of the consolidated  financial statements,  and the
     reported  amounts of  revenues,  expenses,  and  allocation  of profits and
     losses during the period.  Actual results could differ  significantly  from
     those estimates.

     Fair Value of Financial Instruments

     The  carrying  amount of cash and cash  equivalents,  accounts  receivable,
     prepaid  expenses  and other  assets,  amounts  due from  related  parties,
     accounts  payable  and  accrued  liabilities,  and  amounts  due to related
     parties  approximated fair value as of December 31,  2004 and 2003, because
     of the relatively short maturities of these  instruments.  The project loan
     as of December 31, 2004 and 2003 has an estimated fair value of $96,786 and
     $105,838,  respectively,  based on the  quoted  market  price of the senior
     secured notes (see note 6).

     Asset Retirement Obligations

     In  June 2001,  FASB issued  Statement  of Financial  Accounting  Standards
     (SFAS) No. 143, Accounting for Asset Retirement Obligations. This Statement
     addresses  financial  accounting and reporting for  obligations  associated
     with the retirement of tangible  long-lived assets and the associated asset
     retirement costs and amends SFAS No. 19, Financial Accounting and Reporting
     by Oil and Gas Producing  Companies.  The Statement  requires that the fair
     value of a liability  for an asset  retirement  obligation be recognized in
     the period in which it is incurred if a reasonable estimate of a fair value
     can be made, and that the associated  asset retirement costs be capitalized
     as part of the carrying  amount of the long-lived  asset.  The Statement is
     effective for  consolidated  financial  statements  issued for fiscal years
     beginning after June 15, 2002. On January 1, 2003, CFP adopted SFAS No. 143
     and  estimated  the  restoration  costs CFP  expects to incur when the land
     lease with the Navy  expires.  Under the land  lease,  CFP is  required  to
     remove all  property,  plant,  and  equipment  to  restore  the land to its
     original  state.  Adoption  of SFAS No.  143  resulted  in a loss  from the
     cumulative  effect of a change in  accounting  principle  of $1,780,  a net
     increase in property,  plant,  and  equipment  of $259,  and an increase in
     other  liabilities of $2,039.  On  November 1,  2004 CFP entered into a new
     agreement (New Contract) with the Navy,  extending their land lease through
     October 31,  2034 (see  note 5).  Adoption of the terms of the New Contract
     resulted in a change in  accounting  estimate,  resulting in a reduction of
     property, plant, and equipment, net of $229, a reduction to the accumulated
     liability of $1,535 and an increase in interest and other income of $1,306.
     As of December 31, 2004 and 2003, the accumulated liability associated with
     the restoration costs was $910 and $2,243, respectively, and is included in
     other liabilities.  Accretion expense for the years ended December 31, 2004
     and  2003  included  in  plant   operating   expense  was  $202  and  $204,
     respectively.  If CFP had adopted SFAS No. 143  retroactively to January 1,
     2002, net income for the year ended December 31,  2002 would have decreased
     by $199.

     Reclassifications

     Certain  balances in prior years have been  reclassified  to conform to the
     presentation adopted in the current year.

(3)  Plant Operating Expense

     Included in plant  operating  expense are general  administrative  expenses
     that include insurance,  property taxes, and other  professional  expenses.
     For the years ended  December 31,  2004,  2003, and 2002,  these costs were
     $5,377, $6,270, and $6,516, respectively.

(4)  Property, Plant, and Equipment

     Property, plant, and equipment at December 31, 2004 and 2003 consist of the
     following:

                                                         2004          2003
                                                         ----          ----
       Power plant and gathering system           $    160,465       161,207
       Transmission line                                 5,746         5,746
       Wells and resource development costs             86,570        80,262
                                                       -------       -------
                                                       252,781       247,215
       Less accumulated depreciation and
           amortization                               (119,157)     (111,344)
                                                       -------       -------
                                                  $    133,624       135,871
                                                       =======       =======
(5)  Royalty Expense

     Royalty expense for the years ended  December 31,  2004,  2003, and 2002 is
     summarized as follows:
                               2004          2003          2002
                               ----          ----          ----
     Unit 1                $   3,202         6,047         6,281
     Others                    9,545         7,034         6,633
                              ------        ------         -----
     Total                 $  12,747        13,081        12,914
                              ======        ======        ======

     CFP is required to make royalty payments to the Navy. On November 1,  2004,
     the New Contract with the Navy  terminated  the existing  contract that was
     due to  expire  on  December 31,  2009.  The  New  Contract  extends  CFP's
     exclusive right to explore,  develop,  and use certain geothermal resources
     on Navy lands through October 31, 2034.

     Under  the  terms of the New  Contract,  the  royalty  paid to the Navy was
     restructured  so  that  CFP  will  pay at a rate of 15% of  gross  revenues
     received  up to an annual  base  revenue  amount.  Beyond the  annual  base
     revenue amount,  the Navy and CFP will split the additional revenues,  on a
     50/50 basis, until the Navy receives a maximum of 20% of all gross revenue.

     Under  the  original  contract  with the  Navy,  CFP was  obligated  to pay
     royalties for Units 2 and 3 at a fixed  percentage of electricity  sales at
     15% of revenue  received  through 2003,  and was increased to 20% from 2004
     through  2009,  and a royalty for Unit I  consisting  of the payment of the
     Navy's  electric  bill for the China Lake Weapons  Facility,  subject to an
     indexed  reimbursement  from the  Navy.  The  reimbursement  was based on a
     pricing formula for tariff rates charged by Edison, which were increased in
     2001 by the CPUC. On July 10,  2003, the CPUC adopted a settlement  between
     Edison and other  parties to lower retail  electric  rates  effective as of
     August 1,  2003.  Those rates were in effect for one year,  after which new
     rates would have been  established in accordance  with CPUC  guidelines and
     while  Edison has filed for new rates,  they are not  currently  effective.
     Additionally,  under  the  original  agreement,  the Navy  was  compensated
     annually  for any savings in  electrical  usage at the China Lake  Facility
     below a baseline amount (Conserved Power). Upon termination of the existing
     Navy  contract,  the Navy was paid  $1.2 million  for Conserved  Power from
     January 1,  2004 through October 31,  2004. The original contract obligated
     CFP to fund an escrow account so that the Navy I  Partnership would pay the
     Navy  $25 million on December 31,  2009. That provision was also terminated
     and a new escrow  arrangement  was entered into and the amount CFP owes the
     Navy under the new contract is now $18 million.  That payment is secured by
     the  existing  funds on deposit so that funds  plus  accrued  interest  are
     expected to aggregate $18.0 million by December 31, 2009. Accordingly, $111
     was deposited monthly through  October 31,  2004.  Finally, in the original
     contracts the Navy had the right to terminate the contracts at any time for
     its convenience, which was eliminated under the New Contract.

(6)  Project Loan

     On May 28,  1999,  Caithness Coso Funding Corp.  (Funding  Corp.), a wholly
     owned subsidiary of the Partnership,  CED, and CPD  (collectively  known as
     the Coso Partnerships),  raised $413,000 from an offering of senior secured
     notes. Funding Corp. loaned approximately $151,550 to CFP from the $413,000
     debt raised from the offering of senior  secured notes on terms  consistent
     with those of the senior secured  notes.  The loan consisted of one note of
     $29,000 at 6.80% which was paid off on  December 15,  2001,  and another of
     $122,550 at 9.05% which has payments due semiannually  through December 15,
     2009.

     The annual maturity of the project loan for each year ending December 31 is
     as follows:

                                                     Amount
                                                     ------
                  2005                           $   15,100
                  2006                               16,160
                  2007                               17,337
                  2008                               18,295
                  2009                               19,958
                                                     ------
                                                 $   86,850
                                                     ======

     The loan contains certain  restrictive  covenants that, among other things,
     limit the Partnership's ability to incur additional  indebtedness,  release
     funds from reserve accounts,  make  distributions,  create liens, and enter
     into any transaction of merger or consolidation.

     The  Partnership,  Funding  Corp.,  CPD, and CED are jointly and  severally
     liable  for  the  repayment  of  the  senior  secured   notes,   which  are
     collateralized by the assets of the Coso Partnerships.

     The  annual  maturity  of the  senior  secured  notes for each year  ending
     December 31 is as follows:

                                                     Amount
                                                     ------
                  2005                           $   35,480
                  2006                               38,286
                  2007                               47,419
                  2008                               49,261
                  2009                               51,831
                                                    -------
                                                 $  222,277
                                                    =======

(7)  Related Party Transactions

     The amounts due from and to related parties at  December 31,  2004 and 2003
     consist of the following:

                                                        2004           2003
                                                        ----           ----
     Amounts due from related parties:
       Coso Operating Company, LLC                  $     --            116
       New RVPI Company, LLC                              21             --
       Caithness Energy, LLC                             239            239
       Coso Power Developers                             951            838
       Coso Energy Developers                            372            332
                                                       -----          -----
                                                    $  1,583          1,525
                                                       =====          =====
     Amounts due to related parties:
       Caithness Coso Funding Corp.                 $    345            388
       Coso Operating Company, LLC                       131             --
       Caithness Corporation                              76             --
       Caithness Operating Company, LLC                   54             86
       Coso Power Developers (Noncurrent)              1,923          1,914
       Coso Energy Developers (Noncurrent)               459            548
                                                       -----          -----
                                                    $  2,988          2,936
                                                       =====          =====


     COC and  Caithness  Operating  Company,  LLC  are  reimbursed  monthly  for
     non-third-party  costs  incurred  on behalf of CFP.  These  costs  comprise
     principally  direct  operating  costs  of  the  CFP  geothermal   facility,
     allocable general and administrative costs, and an operator fee. The amount
     due from COC relates to advances for payments of  operating  expenses.  The
     amount  due to COC  relates to  reimbursements  for  payment  of  operating
     expenses.  For each of the years ended  December 31,  2004, 2003, and 2002,
     the Partnership paid COC an operators fee of $418.

     CFP is charged a nonmanaging fee payable to the nonmanaging partner,  ESCA,
     or its assignee. For the years ended December 31, 2004, 2003, and 2002, CFP
     paid $248, $243, and $241, respectively.

     The  amount  due to  Funding  Corp.  is  accrued  interest  for  15 days in
     December related to the project loan (see note 6).

     During 1994, the Coso  Partnerships  entered into steam sharing  agreements
     under  which  the  partnerships  may  transfer  steam,  with the  resulting
     incremental revenue and royalty expense shared equally by the partnerships.
     In the second half of 1995,  interconnection  facilities between the plants
     were  completed  and the transfer of steam  commenced.  CFP's steam sharing
     revenue,  included in energy revenues,  was $8,101,  $7,796, and $5,801 for
     the years ended December 31, 2004, 2003, and 2002, respectively.

     CLPSI is a wholly owned subsidiary of Caithness  Acquisition  Company,  LLC
     (CAC).  CLPSI purchases,  stores,  and distributes  spare parts to the Coso
     Partnerships.  Also, certain other maintenance  facilities  utilized by the
     Coso  Partnerships  are owned by CLPSI.  CFP's  advances  to CLPSI fund the
     purchase of spare parts inventory and other assets.  Intercompany  balances
     and transactions have been eliminated upon  consolidation.  CLPSI bills the
     Coso  Partnerships  for  spare  parts  as  utilized  and for  use of  other
     facilities at amounts sufficient for CLPSI to recover its operating costs.

(8)  Accounts Payable and Accrued Liabilities

     Accounts  payable and accrued  liabilities  at  December 31,  2004 and 2003
     consist of the following:

                                                          2004          2003
                                                        --------      --------
     Accrued capitalized costs                          $ 1,204           479
     Royalty payable                                      1,308         3,091
     Trade creditors                                      1,165            --
     Other                                                  924           933
                                                        --------      --------
                                                        $ 4,601         4,503
                                                        ========      ========

(9)  Employee Benefit Plan

     The Partnership has established a 401(k) plan (the Plan) for the benefit of
     eligible  employees who elect to participate.  Eligible employees may elect
     to contribute up to 15% of their annual  compensation,  as defined,  in the
     Plan. The Partnership  will match 50% of the employee's  contribution up to
     the first 6% of the employee's  salary.  Additionally,  the Partnership may
     elect to make a discretionary  profit sharing contribution to the Plan. The
     Partnership's  expense  relating to the Plan  approximated  $143, $128, and
     $122 in 2004, 2003, and 2002, respectively.

(10) Settlement of Litigation

     In  December 2003,  CFP  settled  outstanding  litigation  relating  to the
     failure  and  repair of a  generator  in 1999.  The total net  proceeds  of
     approximately $900 were received in December 2003 and January 2004.

(11) Commitments and Contingencies

     The  Partnership  is required  to obtain a  "Financial  Guarantee  Bond for
     Closure  Costs"  (Water  Bond),  which  would  be  used  in  the  event  of
     noncompliance of the remediation  obligation for waste  discharge.  For the
     years ended  December 31,  2004 and 2003,  the fair value of the Water Bond
     that is reported as a noncurrent restricted investment is $156.

     Settlement  Agreement  Between Edison and the California  Public  Utilities
     Commission

     On  September 23,  2002,  the United  States Court of Appeals for the Ninth
     Circuit  (Ninth  Circuit)  issued an opinion  and order on appeal  from the
     district court's stipulated judgment which affirmed the stipulated judgment
     in part  and  referred  questions  based  on  California  state  law to the
     California  Supreme Court.  The appeals court stated that if the settlement
     agreement  violated  California  state law then the appeals  court would be
     required to void the  stipulated  judgment.  The  California  Supreme Court
     accepted the Ninth  Circuit's  request to address the issues referred to in
     the September 23,  2002 ruling. On August 21,  2003, the California Supreme
     Court found that state laws were not violated as a result of the settlement
     agreements.  On  December 19,  2003,  the Ninth Circuit fully  affirmed the
     district court's stipulated judgment based on the reply from the California
     Supreme Court. No appeal of this order was taken and it is now final.

     Court of Appeals' Decision on Line Loss Factor

     Edison  filed  a  petition  for a writ of  review  of a  January 2001  CPUC
     decision,  claiming that the "floor" line loss factor of 0.95 for renewable
     generators  violated the Public  Utility  Regulatory  Policies Act of 1978.
     Subsequently,  the  California  Court  of  Appeals  issued  a  decision  on
     August 20,  2002 in response to the writ  affirming the  January 2001  CPUC
     decision,  except for the 0.95  "floor,"  which it  rejected as an abuse of
     discretion  by the CPUC.  While this matter was appealed to the  California
     Supreme Court,  the petition for review was denied.  The Coso  Partnerships
     are currently  evaluating potential actions to redress this issue. The Coso
     Partnerships' Agreements set the loss factor at 1.0 for energy sold between
     May 2002 through  May 2007.  After  April 2007,  the Coso Partnerships will
     have a line loss factor of less than 1.0,  effectively  decreasing revenues
     if Edison's  challenge  to the CPUC ruling  stands.  The Coso  Partnerships
     cannot  predict  whether  any  subsequent  action  on this  matter  will be
     successful.

(12) Risks and Uncertainties

     CFP  sells  100% of the  electrical  energy  generated  to  Edison  under a
     long-term  PPC,  and may be  significantly  impacted  by risks  beyond  the
     Partnership's  control. Among the important factors that could cause future
     operating results to differ materially from those anticipated  include, but
     are  not  limited  to:  (i) risks  relating  to  the  uncertainties  in the
     California  energy  market,   (ii) the   financial   viability  of  Edison,
     (iii) risks  related to the operation of power plants,  (iv) the  impact of
     avoided cost pricing along with other pricing variables,  including natural
     gas,  (v) general  operating  risks,  including  resource  availability and
     regulatory  oversight,  (vi) changes in government  regulations,  (vii) the
     effects of competition,  (viii) the alleged  manipulation of the California
     energy market,  and (ix) acts of terrorism directed at the project or other
     facilities affecting the normal course of business.




                                      F-11
<PAGE>

             Report of Independent Registered Public Accounting Firm



The Partners and Management Committee
Coso Energy Developers:


We have  audited  the  accompanying  balance  sheets of Coso  Energy  Developers
(the Partnership)  as of December 31,  2004 and 2003, and the related statements
of operations,  partners'  capital,  and cash flows for each of the years in the
three-year period ended  December 31,  2004. These financial  statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Coso Energy Developers as of
December 31, 2004 and 2003, and the results of its operations and its cash flows
for each of the years in the  three-year  period  ended  December 31,  2004,  in
conformity with U.S. generally accepted accounting principles.

As discussed in note 2 to the financial statements,  effective January 1,  2003,
the  Partnership  adopted the  provisions  of Statement of Financial  Accounting
Standards No. 143, Accounting for Asset Retirement Obligations.





March 17, 2005
New York, New York

/s/ KPMG, LLP
-------------
    KPMG, LLP



                                      F-12
<PAGE>
                                                       COSO ENERGY DEVELOPERS

                                                           Balance Sheets

                                                     December 31, 2004 and 2003

                                                       (Dollars in thousands)
<TABLE>
<CAPTION>
                   Assets                                                           2004                   2003
                                                                              ---------------        ---------------
<S>                                                                           <C>                    <C>
Current assets:
  Cash                                                                    $           496                    603
  Restricted cash and cash equivalents (note 2)                                    10,850                  9,941
  Accounts receivable (note 2)                                                      6,636                  6,830
  Prepaid expenses and other assets                                                   930                  1,094
  Amounts due from related parties (note 7)                                           485                    442
                                                                              --------------         --------------

              Total current assests                                                19,397                 18,910

Restricted investments (notes 2 and 11)                                               221                    214
Investment in Coso Transmission Line Partners (note 3)                              2,430                  2,542
Advances to New CLPSI Company, LLC (note 4)                                           459                    548
Property, plant, and equipment (note 5)                                           123,903                130,519
Power purchase contract, net (note 2)                                              15,221                 16,293
Deferred financing costs, net (note 2)                                              1,275                  1,530
                                                                              ---------------        --------------

              Total assets                                                $       162,906                170,556
                                                                              ===============        ==============

                   Liabilities and Partners' Capital

Current liabilities:
  Accounts payable and accrued liabilities (note 8)                       $         1,710                  2,114
  Amounts due to related parties (note 7)                                           1,648                  1,473
  Current portion of project loan (note 6)                                          8,683                  9,920
                                                                              ---------------        --------------

              Total current liabilities                                            12,041                 13,507

Other liabilities (note 2)                                                          1,263                  1,522
Amounts due to related parties (note 7)                                            26,449                 25,809
Project loan (note 6)                                                              66,217                 74,901
                                                                              ---------------        --------------

              Total liabilities                                                   105,970                115,739

Commitments and contingencies (notes 6 and 11)

Partners' capital                                                                  56,936                 54,817
                                                                              ---------------        --------------

              Total liabilities and partners' capital                     $       162,906                170,556
                                                                              ===============        ==============
</TABLE>

See accompanying notes to financial statements.





                                                               F-13
<PAGE>
<TABLE>
<CAPTION>
                                                      COSO ENERGY DEVELOPERS

                                                    Statements of Operations

                                          Years ended December 31, 2004, 2003, and 2002

                                                     (Dollars in thousands)


                                                                2004               2003                2002
                                                             ----------         ----------          ----------
<S>                                                       <C>                   <C>                   <C>
Revenues:
  Energy revenues (notes 2, 7, and 11)                    $    30,833             32,930              65,489
  Capacity and bonus payments                                  13,913             13,939              15,763
                                                             -----------        ----------          ----------

              Total revenues                                   44,746             46,869              81,252
                                                             -----------        ----------          ----------

Operating expenses:
  Plant operating expense (note 9)                             14,088             12,834              11,748
  Royalty expense                                               2,313              2,778               2,436
  Depreciation and amortization                                 9,081              9,320              14,342
                                                             -----------        ----------          ----------

              Total operating expenses                         25,482             24,932              28,526
                                                             -----------        ----------          ----------

              Operating income                                 19,264             21,937              52,726
                                                             -----------        ----------          ----------

Other (income)/expenses:
  Interest and other income                                    (2,059)            (1,141)             (1,455)
  Interest expense on project loan                              7,457              8,018               8,567
  Noncash interest expense                                        255                255                 255
                                                             -----------        ----------          ----------

              Total other expenses                              5,653              7,132               7,367
                                                             -----------        ----------          ----------

Income before cumulative effect
  of change in accounting principle                            13,611             14,805              45,359

Cumulative effect of change in accounting
  principle (note 2)                                               --                924                  --
                                                             -----------        ----------          ----------



              Net income                                  $    13,611             13,881              45,359
                                                             ===========        ==========          ==========
</TABLE>

See accompanying notes to financial statements.





                                                               F-14
<PAGE>

<TABLE>
<CAPTION>
                                                      COSO ENERGY DEVELOPERS

                                                  Statements of Partners' Capital

                                          Years ended December 31, 2004, 2003, and 2002

                                                     (Dollars in thousands)

                                                                   Caithness
                                                                     Coso                  New
                                                                   Holdings,               CHIP
                                                                      LLC              Company, LLC            Total
                                                                 ------------          ------------         ------------
<S>                                                            <C>                  <C>                   <C>
Balance at December 31, 2001                                   $    34,407                18,355               52,762

Distributions to partners                                          (21,589)              (19,929)             (41,518)

Net income                                                          23,587                21,772               45,359
                                                                 ------------          ------------         -------------

Balance at December 31, 2002                                        36,405                20,198               56,603

Distributions to partners                                           (8,147)               (7,520)             (15,667)

Net income                                                           7,218                 6,663               13,881
                                                                 ------------          ------------         -------------

Balance at December 31, 2003                                        35,476                19,341               54,817

Distributions to partners                                           (5,976)               (5,516)             (11,492)

Net income                                                           7,078                 6,533               13,611
                                                                 ------------          ------------         -------------

Balance at December 31, 2004                                   $    36,578                20,358               56,936
                                                                 ============          ============         =============
</TABLE>

See accompanying notes to financial statements.





                                                               F-15
<PAGE>
<TABLE>
<CAPTION>
                                                      COSO ENERGY DEVELOPERS

                                                     Statements of Cash Flows

                                           Years ended December 31, 2004, 2003, and 2002

                                                      (Dollars in thousands)


                                                                         2004              2003               2002
                                                                     -----------        -----------        -----------
<S>                                                              <C>                  <C>                  <C>
Cash flows from operating activities:
  Net income                                                     $     13,611             13,881              45,359
  Adjustments to reconcile net income to
    net cash provided by operating activities:
       Depreciation and amortization                                    9,081              9,320              14,342
       Noncash interest expense                                           255                255                 255
       Noncash plant operating expense                                    124                112                  --
       Cumulative effect of change in accounting
         principle                                                         --                924                  --
       Changes in operating assets and liabilities:
         Accounts receivable, prepaid expenses
           and other assets                                               358                127              (4,263)
         Advances to New CLPSI Company, LLC                                89                126                 115
         Accounts payable and accrued liabilities                        (404)               470              (6,055)
         Amounts due from related parties                                 (43)               (21)                (20)
         Other                                                           (289)              (144)                432
         Amounts due to related parties                                   815                965                (950)
                                                                     -----------        -----------        ------------
           Net cash provided by operating activities                   23,597             26,015              49,215
                                                                     -----------        -----------        ------------
Cash flows from investing activities:
  Capital expenditures                                                 (1,487)            (2,716)               (706)
  Investment in Coso Transmission Line Partners                           112                111                  85
  (Increase) decrease in restricted cash                                 (916)            (3,509)                722
                                                                     -----------        -----------        ------------
           Net cash (used in) provided by
             investing activities                                      (2,291)            (6,114)                101
                                                                     -----------        -----------        ------------
Cash flows from financing activities:
  Distributions to partners                                           (11,492)           (15,667)            (41,518)
  Repayment of project financing loans                                 (9,921)            (5,054)             (6,375)
                                                                     -----------        -----------        ------------

           Net cash used in financing activities                      (21,413)           (20,721)            (47,893)
                                                                     -----------        -----------        ------------

           Net change in cash                                            (107)              (820)              1,423

Cash at beginning of year                                                 603              1,423                  --
                                                                     -----------        -----------        ------------

Cash at end of year                                              $        496                603               1,423
                                                                     ===========        ===========        ============
Supplemental cash flow disclosure:
  Cash paid for interest                                         $      7,497              8,042               8,595
</TABLE>


See accompanying notes to financial statements.





                                                             F-16
<PAGE>
                             COSO ENERGY DEVELOPERS

                          Notes to Financial Statements

                        December 31, 2004, 2003, and 2002

                             (Dollars in thousands)



(1)  Organization, Operation, and Business of the Partnership

     Coso Energy  Developers  (CED or the  Partnership),  a  California  general
     partnership,  was founded on March 31,  1988, in connection  with financing
     the  construction of a geothermal  power plant on land leased from the U.S.
     Bureau  of  Land  Management  (BLM)  at  Coso  Hot  Springs,   China  Lake,
     California.  CED is a general partnership owned by Caithness Coso Holdings,
     LLC (CCH), a California  limited liability  company,  and New CHIP Company,
     LLC (New CHIP), a Delaware limited liability company,  which are affiliates
     of CED.

     The CED power  plants are  located on land owned by BLM.  There are turbine
     generators  located  at both  the  East  and  West  power  locks.  CED pays
     royalties to BLM of 10% of the net value of the steam produced.

     The primary BLM geothermal lease had an initial term of ten years ending in
     1998, and thereafter is subject to automatic  extension  until  October 31,
     2035, so long as geothermal  steam is commercially  produced.  In addition,
     the lease may be extended to 2075 at the option of BLM.  Coso Land  Company
     (CLC),  the original  leaseholder,  retained a 5%  overriding  royalty from
     interest based on the value of the steam produced.  CLC was a joint venture
     between Caithness Acquisition Company, LLC (CAC) and an affiliate to CCH.

     The  Partnership  sells all  electricity  produced to  Southern  California
     Edison (Edison) under a 30-year power purchase contract  (the PPC) expiring
     in 2019.  Under  the  terms of the PPC,  Edison  makes  payments  to CED as
     follows:

     *    Contractual payments for energy delivered escalated at an average rate
          of  approximately  7.6% for the first ten years after the date of firm
          operation (scheduled energy price period).  After the scheduled energy
          price period, the energy payment adjusted to the actual avoided energy
          cost experienced by Edison. In March 1999,  the Partnership  completed
          the ten-year  fixed price payment  period and Edison ceased paying the
          scheduled   energy   rates.   Edison   entered   into   an   agreement
          (the Agreement)  with the Partnership on June 19,  2001 that addressed
          renewable  energy pricing and issues  concerning  California's  energy
          crisis.  The  Agreement,  which  was  amended  on  November 30,  2001,
          established  May 1,  2002 as the date when the Partnership  will begin
          receiving a fixed energy rate of  5.37 cents  per  kilowatt  (kWh) for
          five  (5) years.  From  January 1,  2002 through  April 30,  2002, CED
          elected to receive  from Edison a fixed  energy rate of 3.25 cents per
          kWh. The average rate of energy paid to the  Partnership for the years
          ended December 31, 2004, 2003, and 2002 was 5.37, 5.37, and 4.66 cents
          per kWh,  respectively.  Starting May 1, 2002, CED received 5.37 cents
          per kWh, pursuant to the Agreement discussed above.  Subsequent to the
          five-year  period,  Edison will be required to make energy payments to
          the  Partnership  based on its  avoided  cost of energy  until the PPC
          expires.  Beyond the five-year period,  the Partnership cannot predict
          the likely level of avoided  cost of energy  prices under the PPC and,
          accordingly, the revenues generated by the Partnership could fluctuate
          significantly;

     *    Capacity  payments  which remain fixed over the life of the PPC to the
          extent that actual  energy  delivered  exceeds  minimum  levels of the
          plant capacity defined in the PPC; and

     *    Bonus payments to the extent that actual energy  delivery  exceeds 85%
          of the plant capacity, are calculated monthly as stated in the PPC. In
          2004, 2003, and 2002, the bonus payments  aggregated  $2,100,  $2,126,
          and $2,126, respectively.

     Coso Operating Company, LLC (COC), an affiliated Delaware limited liability
     company, provides for the operation and maintenance of the geothermal power
     facilities and  administrative  services  pursuant to certain operation and
     maintenance  agreements  with New CHIP, the managing  general  partner (see
     note 7).

     The  partnership  agreement  provides  for  distributable  cash  flow to be
     allocated  48% to New CHIP and 52% to CCH. For purposes of  allocating  net
     income to  partners'  capital  accounts,  profits and losses are  allocated
     based on the aforementioned cash flow percentages. For income tax purposes,
     certain  deductions  and  credits  are  subject to special  allocations  as
     defined in the partnership agreement.

(2)  Summary of Significant Accounting Policies

     Accounts Receivable and Revenue Recognition

     Accounts  receivable  primarily  consist  of  receivables  from  Edison for
     electricity  delivered  and sold  under  the PPC.  Operating  revenues  are
     recognized as income during the period in which electricity is delivered to
     Edison. Subsequent to the five-year period stated in the Agreement,  except
     for the period  January 1,  2002 through  April 30,  2002,  as discussed in
     note 1,  revenue is recognized based on Edison's avoided energy cost, until
     the Partnership's PPC expires.

     Periodic  increases in natural gas prices and imbalances between supply and
     demand, among other factors,  have at times led to significant increases in
     wholesale  electricity prices in California.  During those periods,  Edison
     had fixed tariffs with its retail customers that were  significantly  below
     the wholesale  prices it paid in  California.  That resulted in significant
     under-recoveries   by  Edison  of  its   electricity   purchase  costs.  On
     January 16,  2001,  Edison  announced  that it was  temporarily  suspending
     payments  for  energy  provided,  including  the  energy  provided  by  the
     Partnership,   pending  a  permanent  solution  to  its  liquidity  crisis.
     Subsequently,  pursuant to a California Public Utilities  Commission (CPUC)
     order,  Edison resumed making  payments to the  Partnership  beginning with
     power generated on March 27,  2001. Edison also made a payment equal to 10%
     of the  unpaid  balance  for  power  generated  from  November 1,  2000  to
     March 26, 2001 and paid interest on the outstanding amount at 7% per annum.
     That  payment was made  pursuant to the  Agreement  between  Edison and the
     Partnership described in note 1. The Agreement,  as amended, which received
     CPUC approval in January 2002, established the fixed energy rates discussed
     above and set payment terms for past due amounts owed to the Partnership by
     Edison. Due to the uncertainty surrounding Edison's ability to make payment
     on  past  due  amounts,  collection  was  not  reasonably  assured  and the
     Partnership  did not  recognize  revenue of $37,068  from Edison for energy
     delivered during the period  November 1,  2000 through  March 26,  2001. On
     March 1,  2002,  Edison reached certain  financing  milestones and paid the
     Partnership $37,068 for electricity generated during the period November 1,
     2000 through March 26,  2001. The Partnership  recognized  revenue for such
     electricity deliveries in March 2002.

     Revenue for capacity  payments is  recognized at the end of each month that
     capacity is provided under the PPC when  collection is reasonably  assured.
     Revenue for bonus  payments is recognized at the end of each month in which
     actual energy  delivered  exceeds 85% of the plant  capacity  stated in the
     PPC.

     In the event that the PPC is amended, the Partnership's accounting policies
     would be modified in accordance  with the guidance  established in Emerging
     Issues Task Force (EITF) 91-6, Revenue Recognition of Long-Term Power Sales
     Contracts,  and EITF 01-8,  Determining  Whether an Arrangement  Contains a
     Lease.

     Fixed Assets and Depreciation

     The  costs  of major  additions  and  betterments  are  capitalized,  while
     replacements,  maintenance, and repairs, which do not improve or extend the
     life of the respective assets, are expensed as incurred.

     Depreciation  of the power  plant and  transmission  line is  computed on a
     straight-line  basis over their estimated useful lives of 30 years and, for
     significant  additions,  the shorter of the useful life or the remainder of
     the 30-year life from the plant's commencement of operations.

     Wells and Resource Development Costs

     Wells and resource  development  costs include costs incurred in connection
     with the  exploration  and  development of geothermal  resources.  All such
     costs,  which  include dry hole costs,  the cost of drilling and  equipping
     production   wells,   and   administrative   and  interest  costs  directly
     attributable  to the  project  are  capitalized  and  amortized  over their
     estimated  useful lives when  production  commences.  The estimated  useful
     lives  of  production  wells  are  10 years  each;  exploration  costs  and
     development costs, other than production wells, are amortized over 30 years
     and,  for  significant  additions,  the  shorter of the useful  life or the
     remainder of the 30-year life from the plant's commencement of operations.

     Deferred Plant Overhaul Costs and Well Rework Costs

     Plant overhaul  costs are deferred and amortized over the estimated  period
     between overhauls as these costs extend the life of the respective  assets.
     These  deferred  costs  of $199  and $420 at  December 31,  2004 and  2003,
     respectively,  are included in property,  plant, and equipment.  Currently,
     plant  overhauls  are  amortized  over   three years   from  the  point  of
     completion.

     Production and injection rework costs included in plant operating  expenses
     are expensed as incurred during the year. For the years ended  December 31,
     2004, 2003, and 2002, such costs were $2,495, $1,493, and $0, respectively.

     Impairment of Long-Lived Assets

     Long-lived assets,  such as property,  plant, and equipment,  and purchased
     intangibles  subject to amortization,  are reviewed for impairment whenever
     events or changes in circumstances  indicate that the carrying amount of an
     asset may not be recoverable.  Recoverability of assets to be held and used
     is measured by a comparison of the carrying amount of an asset to estimated
     undiscounted  future cash flows  expected to be generated by the asset.  If
     the carrying amount of an asset exceeds its estimated future cash flows, an
     impairment  charge is recognized by the amount by which the carrying amount
     of the asset exceeds the fair value of the asset.  Assets to be disposed of
     would be  separately  presented  in the balance  sheet and  reported at the
     lower of the carrying  amount or fair value less costs to sell,  and are no
     longer  depreciated.  The  assets  and  liabilities  of  a  disposed  group
     classified  as  held  for  sale  would  be  presented   separately  in  the
     appropriate asset and liability sections of the balance sheet.

     Deferred Financing Costs

     Deferred  financing costs as of December 31,  2004 and 2003 consist of loan
     fees and other costs of financing  that are amortized  over the term of the
     related  financing.  Annual  amortization  of the deferred  financing costs
     included in noncash interest expense is $255.  Accumulated  amortization at
     December 31, 2004 and 2003 was $1,757 and $1,502, respectively.

     Power Purchase Contract

     Intangible asset as of December 31,  2004 and 2003 consists of the PPC that
     is amortized on a  straight-line  basis over the remaining term of the PPC,
     which will expire in 2019.  Annual  amortization of the PPC is $1,072.  The
     PPC  consists  of a gross  carrying  amount  of  $21,443,  and  accumulated
     amortization  at  December 31,   2004  and  2003  was  $6,222  and  $5,150,
     respectively.

     Income Taxes

     There  is  no  provision   for  income  taxes  since  such  taxes  are  the
     responsibility  of the partners.  The net difference  between the tax bases
     and  the  reported  amounts  of  property,  plant,  and  equipment,  net at
     December 31, 2004 and 2003 was $106,270 and $123,010, respectively.

     Cash Equivalents

     For  purposes of the  statements  of cash flows,  CED  considers  all money
     market  instruments  purchased with an initial  maturity of three months or
     less to be cash equivalents.

     Restricted Cash and Investments

     As of  December 31,  2004 and  2003,  the  Partnership's  investments  were
     classified as held to maturity and reported at amortized cost.  Included in
     restricted cash and investments are capital  expenditure  reserves and debt
     service  reserve for the project debt service  required by the project loan
     (see note 6).  The carrying  amount of restricted  cash and  investments at
     December 31,  2004  and 2003  approximated  fair  value,  which is based on
     quoted market prices as provided by the  financial  institution  that holds
     the investments.

     Use of Estimates

     The preparation of financial  statements in conformity with U.S.  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets,  liabilities,  and
     partners'  capital and disclosure of contingent  assets and  liabilities at
     the date of the financial  statements and the reported amounts of revenues,
     expenses,  and the  allocation  of profits  and losses  during the  period.
     Actual results could differ significantly from those estimates.

     Fair Value of Financial Instruments

     The  carrying  amount of cash and cash  equivalents,  accounts  receivable,
     prepaid  expenses  and other  assets,  amounts  due from  related  parties,
     accounts  payable  and  accrued  liabilities,  and  amounts  due to related
     parties  approximated fair value as of December 31,  2004 and 2003, because
     of the relatively short maturity of these instruments.  The project loan as
     of  December 31,  2004 and 2003 has an estimated  fair value of $83,469 and
     $92,031,  respectively,  based on the  quoted  market  price of the  senior
     secured notes (see note 6).

     The investment in Coso Transmission Line Partners (see note 3) and advances
     to New CLPSI Company, LLC (CLPSI) (see note 4) approximate the fair value.

     Asset Retirement Obligations

     In June 2001,  the  Financial  Accounting  Standards  Board  (FASB)  issued
     Statement of Financial Accounting Standards (SFAS) No. 143,  Accounting for
     Asset Retirement Obligations. This Statement addresses financial accounting
     and reporting for  obligations  associated  with the retirement of tangible
     long-lived assets and the associated asset retirement costs and amends SFAS
     No. 19,  Financial  Accounting  and  Reporting  by Oil  and  Gas  Producing
     Companies. The Statement requires that the fair value of a liability for an
     asset  retirement  obligation  be  recognized  in the period in which it is
     incurred if a reasonable estimate of a fair value can be made, and that the
     associated  asset  retirement  costs be capitalized as part of the carrying
     amount of the  long-lived  asset.  The Statement is effective for financial
     statements  issued for fiscal  years  beginning  after  June 15,  2002.  On
     January 1,  2003, CED adopted  SFAS No. 143  and estimated the  restoration
     costs CED expects to incur when the land lease with BLM expires.  Under the
     land lease, CED is required to remove all property, plant, and equipment to
     restore the land to its original state.  Adoption of SFAS No. 143  resulted
     in a loss from the cumulative effect of a change in accounting principle of
     $924, a net  increase in property,  plant,  and  equipment of $198,  and an
     increase in other liabilities of $1,122. As of December 31,  2004 and 2003,
     the accumulated  liability associated with the restoration costs was $1,357
     and $1,234, respectively,  and is included in other liabilities.  Accretion
     expense for the years ended  December  31, 2004 and 2003  included in plant
     operating expense was $123 and $112, respectively.  If CED had adopted SFAS
     No. 143  retroactively  to  January 1, 2002,  net income for the year ended
     December 31, 2002 would have decreased by $110.

     New Accounting Pronouncements

     In December 2003, the FASB issued  Interpretation  No. 46 (revised December
     2003),   (FIN  46)  Consolidation  of  Variable   Interest   Entities,   an
     interpretation of Accounting  Research Bulletin No. 51. This Interpretation
     addresses the  consolidation by business  enterprises of variable  interest
     entities  as defined in the  Interpretation.  The  Interpretation  is to be
     applied in the first fiscal year or interim period beginning after December
     15, 2003 to enterprises that hold a variable  interest in all entities that
     are not special purpose entities.  There is no effect of the application of
     this Interpretation on CED's financial statements.

(3)  Investment in Coso Transmission Line Partners

     Coso Transmission Line Partners (CTLP) is a partnership owned 46.67% by CED
     and 53.33% by Coso Power Developers (CPD), which owns the transmission line
     and  facilities  connecting  the power  plants  owned by CED and CPD to the
     transmission  line  owned  by  Edison,  at  Inyokern,  California,  located
     28 miles  south of the plants.  CTLP charges CED and CPD for the use of the
     transmission  line at amounts  sufficient for CTLP to recover its operating
     costs.  These  charges  are  recorded  by CED  as  operating  expenses  and
     reflected as an increase in CED's payable to CTLP (see note 7).

(4)  Advances to New CLPSI Company, LLC

     CLPSI is a wholly owned  subsidiary of CAC. CLPSI  purchases,  stores,  and
     distributes  spare  parts to CED,  CPD,  and Coso  Finance  Partners  (CFP)
     (collectively  known  as  the  Coso  Partnerships).   Also,  certain  other
     maintenance  facilities  utilized  by the  Coso Partnerships  are  owned by
     CLPSI.  CED's advances to CLPSI fund the purchase of spare parts  inventory
     and other  assets.  CLPSI  bills the Coso  Partnerships  for spare parts as
     utilized  and for use of the other  facilities  at amounts  sufficient  for
     CLPSI to recover its operating costs.

(5)  Property, Plant, and Equipment

     Property, plant, and equipment at December 31, 2004 and 2003 consist of the
     following:


                                                          2004          2003
                                                        --------      --------
     Power plant and gathering system                 $  148,751       148,198
     Transmission line                                     9,120         9,120
     Wells and resources development costs                93,483        93,612
                                                         -------       -------
                                                         251,354       250,930
     Less accumulated depreciation and amortization     (127,451)     (120,411)
                                                         -------       -------
                                                      $  123,903       130,519
                                                         =======       =======

(6)  Project Loan

     On May 28,  1999,  Caithness Coso Funding Corp.  (Funding  Corp.), a wholly
     owned subsidiary of the Coso Partnerships, raised $413,000 from an offering
     of senior secured notes. Funding Corp. loaned approximately $108,000 to CED
     from the $413,000 debt raised from the offering of senior  secured notes on
     terms consistent with those of the senior secured notes. The loan consisted
     of one note of $11,650 at 6.80%,  which was paid off on December 15,  2001,
     and  another of  $96,250 at 9.05%,  which has  payments  due  semi-annually
     through December 15, 2009.

     The annual maturity of the project loan for each year ending December 31 is
     as follows:

                                                      Amount
                                                      ------
                  2005                            $    8,683
                  2006                                10,388
                  2007                                17,552
                  2009                                18,574
                  2009                                19,703
                                                      ------
                                                  $   74,900
                                                      ======

     The loan contains certain  restrictive  covenants that, among other things,
     limit the Partnership's ability to incur additional  indebtedness,  release
     funds from reserve accounts,  make  distributions,  create liens, and enter
     into any transaction of merger or consolidation.

     The  Partnership,  Funding  Corp.,  CPD, and CFP are jointly and  severally
     liable  for  the  repayment  of  the  senior  secured   notes,   which  are
     collateralized by the assets of the Coso Partnerships.

     The  annual  maturity  of the  senior  secured  notes for each year  ending
     December 31 is as follows:

                                                      Amount
                                                      ------
                  2005                            $   35,480
                  2006                                38,286
                  2007                                47,419
                  2009                                49,261
                  2009                                51,831
                                                     -------
                                                  $  222,277
                                                     =======

(7)  Related Party Transactions

     The amounts due from and to related parties at  December 31,  2004 and 2003
     consist of the following:
                                                      2004              2003
                                                      ----              ----
     Amounts due from related parties:
       New RVPI Company, LLC                      $     21                --
       Coso Land Company:
         Principal                                     141               141
         Accrued interest                              323               301
                                                    ------            ------
                                                  $    485               442
                                                    ======            ======
     Amounts due to related parties:
       Coso Power Developers                      $    379               380
       Coso Finance Partners                           372               332
       Coso Land Company (noncurrent)               26,449            25,809
       Caithness Coso Funding Corp.                    297               337
       Coso Operating Company, LLC                     555               350
       Caithness Operating Company, Inc.                45                74
                                                    ------            ------
                                                  $ 28,097            27,282
                                                    ======            ======

     COC and  Caithness  Operating  Company,  Inc  are  reimbursed  monthly  for
     non-third-party  costs incurred on behalf of CED. These costs are comprised
     principally  of  direct  operating  costs of the CED  geothermal  facility,
     allocable general and administrative costs, and an operator fee. The amount
     due to COC relates to  reimbursements  for payments of operating  expenses.
     For  each of the  years  ended  December 31,  2004,  2003,  and  2002,  the
     Partnership paid COC an operators fee of $418.

     CED is charged a nonmanaging fee payable to the nonmanaging  partner,  CCH,
     or its assignee. For the years ended December 31, 2004, 2003, and 2002, CED
     paid $248, $243, and $241, respectively.

     As indicated in note 1,  CLC is entitled to a royalty of 5% of the value of
     steam used by CED to produce the  electricity  sold to Edison.  The royalty
     due CLC for the years ended  December 31,  2004,  2003,  and 2002 was $640,
     $814,  and  $781,  respectively.   Payment  of  royalties  due  to  CLC  is
     subordinated  to payment of the project loan and is included in amounts due
     to related parties noncurrent (see note 6).  The total amount payable as of
     December 31,  2004 and 2003 was  $26,449  and  $25,809,  respectively.  The
     obligation is noninterest bearing.

     CED is charged  for its use of the  transmission  line  owned by CTLP.  The
     amount of such net charges, which are included in plant operating expenses,
     were $112, $111, and $113 for the years ended December 31,  2004, 2003, and
     2002, respectively.

     CED is charged by CLPSI for both its inventory usage and its portion of the
     expenses of operating  CLPSI. The 2004, 2003, and 2002 costs charged to CED
     from  CLPSI,  which  are  included  in  plant  operating   expenses,   were
     approximately $81, $318, and $350, respectively.

     The amount due to Funding Corp.  represents accrued interest for 15 days in
     December related to the project loan (see note 6).

     On  December 16,  1992, CED retired CLC's  promissory note due to CalEnergy
     Company,  Inc.,  resulting in the loan from CED to CLC of $141. Interest at
     5% was accrued on this loan for the years ended  December 31,  2004,  2003,
     and 2002, respectively. Interest on the note was $22, $21, and $20 in 2004,
     2003, and 2002, respectively.

     During 1994, the Coso  Partnerships  entered into steam sharing  agreements
     under  which  the  partnerships  may  transfer  steam,  with the  resulting
     incremental revenue and royalty expense shared equally by the partnerships.
     In the second half of 1995,  interconnection  facilities between the plants
     were  completed  and the transfer of steam  commenced.  CED's steam sharing
     resulted in an expense,  included in energy revenues,  of $1,888, $908, and
     $546, for the years ended December 31, 2004, 2003, and 2002, respectively.

(8)  Accounts Payable and Accrued Liabilities

     Accounts  payable and accrued  liabilities  at  December 31,  2004 and 2003
     consist of the following:

                                                          2004          2003
                                                        --------      --------
     Royalty payable                                    $   226         1,045
     Other                                                1,484         1,069
                                                        --------      --------
                                                        $ 1,710         2,114
                                                        ========      ========

(9)  Plant Operating Expense

     Included in plant  operating  expense are general  administrative  expenses
     that include insurance,  property taxes, and other  professional  expenses.
     For the years ended  December 31,  2004,  2003, and 2002,  these costs were
     $6,534, $6,503, and $7,198, respectively.

(10) Employee Benefit Plan

     The Partnership has established a 401(k) plan (the Plan) for the benefit of
     eligible  employees who elect to participate.  Eligible employees may elect
     to contribute up to 15% of their annual  compensation,  as defined,  in the
     Plan. The Partnership  will match 50% of the employee's  contribution up to
     the first 6% of the employee's  salary.  Additionally,  the Partnership may
     elect to make a discretionary  profit sharing contribution to the Plan. The
     Partnership's  expense  relating to the Plan  approximated  $149, $146, and
     $157 in 2004, 2003, and 2002, respectively.

(11) Commitments and Contingencies

     The  Partnership  is required  to obtain a  "Financial  Guarantee  Bond for
     Closure  Costs"  (Water Bond),   which  would  be  used  in  the  event  of
     noncompliance of the remediation  obligation for waste  discharge.  For the
     years ended  December 31,  2004 and 2003, the fair values of the Water Bond
     that is reported as a noncurrent  restricted  investment are $221 and $214,
     respectively.

     Settlement  Agreement  between Edison and the California  Public  Utilities
     Commission

     On  September 23,  2002,  the United  States Court of Appeals for the Ninth
     Circuit  (Ninth Circuit)  issued an  opinion  and order on appeal  from the
     district court's stipulated judgment which affirmed the stipulated judgment
     in part  and  referred  questions  based  on  California  state  law to the
     California  Supreme Court.  The Ninth Circuit stated that if the settlement
     agreement  violated  California  state law, then the appeals court would be
     required to void the  stipulated  judgment.  The  California  Supreme Court
     accepted the Ninth  Circuit's  request to address the issues referred to in
     the September 23,  2002 ruling. On August 21,  2003, the California Supreme
     Court found that state laws were not violated as a result of the settlement
     agreements.  On  December 19,  2003,  the Ninth Circuit fully  affirmed the
     district court's stipulated judgment based on the reply from the California
     Supreme Court. No appeal of this order was taken and it is now final.

     Court of Appeals Decision on Line Loss Factor

     Edison  filed a  petition  for a writ of  review  of a  January  2001  CPUC
     decision,  claiming that the "floor" line loss factor of 0.95 for renewable
     generators  violated the Public  Utility  Regulatory  Policies Act of 1978.
     Subsequently,  the  California  Court  of  Appeals  issued  a  decision  on
     August 20,  2002 in response to the writ  affirming  the January  2001 CPUC
     decision,  except for the 0.95  "floor,"  which it  rejected as an abuse of
     discretion  by the CPUC.  While this matter was appealed to the  California
     Supreme Court,  the petition for review was denied.  The Coso  Partnerships
     are currently  evaluating potential actions to redress this issue. The Coso
     Partnerships' Agreements set the loss factor at 1.0 for energy sold between
     May 2002 through May 2007.  After April 2007,  the Coso  Partnerships  will
     have a line loss factor of less than 1.0,  effectively  decreasing revenues
     if Edison's  challenge  to the CPUC ruling  stands.  The Coso  Partnerships
     cannot predict whether any subsequent  action regarding this matter will be
     successful.

(12) Risks and Uncertainties

     CED  sells  100% of the  electrical  energy  generated  to  Edison  under a
     long-term  PPC,  and may be  significantly  impacted  by risks  beyond  the
     Partnership's  control. Among the important factors that could cause future
     operating results to differ materially from those anticipated  include, but
     are  not  limited  to:  (i) risks  relating  to  the  uncertainties  in the
     California  energy  market,   (ii) the   financial   viability  of  Edison,
     (iii) risks  related to the operation of power plants,  (iv) the  impact of
     avoided  cost  pricing  along with  other  pricing  variables,  (v) general
     operating risks,  including resource availability and regulatory oversight,
     (vi) changes in government  regulations,  (vii) the effects of competition,
     (viii) the  alleged  manipulation of the California energy market, and (ix)
     acts of terrorism directed at the project or other facilities affecting the
     normal course of business.


                                      F-17

<PAGE>
             Report of Independent Registered Public Accounting Firm



The Partners and Management Committee
Coso Power Developers and subsidiary:


We have  audited  the  accompanying  consolidated  balance  sheets of Coso Power
Developers and subsidiary  (the Partnership)  as of December 31,  2004 and 2003,
and the related  consolidated  statements of operations,  partners' capital, and
cash flows for each of the years in the  three-year  period  ended  December 31,
2004. These  consolidated  financial  statements are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in  all  material  respects,  the  financial  position  of  Coso  Power
Developers and subsidiary as of  December 31,  2004 and 2003, and the results of
their  operations  and their cash flows for each of the years in the  three-year
period  ended  December 31,  2004 in  conformity  with U.S.  generally  accepted
accounting principles.

As discussed in note 2 to the financial  statements,  effective January 1, 2004,
the  Partnership  retroactively  adopted the provisions of Financial  Accounting
Standards Board Interpretation No. 46 (revised December 2003),  Consolidation of
Variable  Interest  Entities,  by  restating  the  2003  and  2002  consolidated
financial statements, and effective January 1, 2003, the Partnership adopted the
provisions of Statement of Financial  Accounting  Standards No. 143,  Accounting
for Asset Retirement Obligations.





March 17, 2005
New York, New York

/s/ KPMG, LLP
-------------
    KPMG, LLP



                                      F-18
<PAGE>
                                                     COSO POWER DEVELOPERS
                                                         AND SUBSIDIARY

                                                   Consolidated Balance Sheets

                                                   December 31, 2004 and 2003

                                                     (Dollars in thousands)
<TABLE>
<CAPTION>
                  Assets                                                                    2004                 2003
                                                                                       --------------       --------------
<S>                                                                                <C>                      <C>
Current assets:
  Cash                                                                             $          507                   78
  Restricted cash and cash equivalents (note 2)                                             8,474                8,146
  Accounts receivable, (net of allowances of $82) (note 2)                                  7,693                7,985
  Prepaid expenses and other assets                                                           634                  830
  Amounts due from related parties (note 7)                                                 6,421                6,412
                                                                                       --------------       --------------

              Total current assets                                                         23,729               23,451

Restricted investments (notes 2 and 11)                                                       135                  135
Advances to New CLPSI Company, LLC (note 4)                                                 1,923                1,914
Property, plant, and equipment, net (note 5)                                              113,696              120,509
Power purchase contract, net (note 2)                                                      14,437               17,232
Deferred financing costs, net (note 2)                                                      1,085                1,302
                                                                                       --------------       --------------

              Total assets                                                         $      155,005              164,543
                                                                                      ===============       ==============

                  Liabilities and Partners' Capital

Current liabilities:
  Accounts payable and accrued liabilities (note 8)                                $        2,372                1,891
  Amounts due to related parties (note 7)                                                   1,313                1,191
  Current portion of project loan (note 6)                                                 11,697               10,718
                                                                                      ---------------       --------------
              Total current liabilities                                                    15,382               13,800

Other liabilities (note 2)                                                                    835                2,589
Project loan (note 6)                                                                      48,830               60,528
                                                                                      ---------------       --------------

              Total liabilities                                                            65,047               76,917

Commitments and contingencies (notes 6 and 11)

Minority interest                                                                           2,431                2,542
Partners' capital                                                                          87,527               85,084
                                                                                      ---------------       --------------

              Total liabilities and partners' capital                              $      155,005              164,543
                                                                                      ===============       ==============
</TABLE>

See accompanying notes to consolidated financial statements.





                                                                 F-19
<PAGE>
<TABLE>
<CAPTION>
                                                    COSO POWER DEVELOPERS
                                                        AND SUBSIDIARY

                                            Consolidated Statements of Operations

                                        Years ended December 31, 2004, 2003, and 2002

                                                    (Dollars in thousands)



<S>                                                           <C>                   <C>                   <C>
                                                                     2004                  2003                  2002
                                                              ------------------    ------------------    ------------------
Revenues:
  Energy revenues (notes 2, 7, and 11)                        $      34,111                32,131                63,756
  Capacity and bonus payments                                        14,018                14,018                15,836
                                                              ------------------    ------------------    ------------------

              Total revenues                                         48,129                46,149                79,592
                                                              ------------------    ------------------    ------------------
Operating expenses:
  Plant operating expense (note 9)                                    9,617                 9,890                10,192
  Royalty expense                                                     8,231                 7,520                 6,961
  Depreciation and amortization                                      10,241                10,356                12,406
                                                              ------------------    ------------------    ------------------

              Total operating expenses                               28,089                27,766                29,559
                                                              ------------------    ------------------    ------------------

              Operating income                                       20,040                18,383                50,033
                                                              ------------------    ------------------    ------------------
Other (income)/expenses:
  Interest and other income (note 2)                                 (2,681)                 (569)               (1,025)
  Interest expense on project loan                                    6,211                 7,070                 7,538
  Noncash interest expense                                              217                   217                   217
                                                              ------------------    ------------------    ------------------

              Total other expenses                                    3,747                 6,718                 6,730
                                                              ------------------    ------------------    ------------------

Income before cumulative effect
  of change in accounting principle                                  16,293                11,665                43,303

Cumulative effect of change in accounting
  principle (note 2)                                                     --                 1,777                    --
                                                              ------------------    ------------------    ------------------


              Net income                                      $      16,293                 9,888                43,303
                                                              ==================    ==================    ==================
</TABLE>

See accompanying notes to consolidated financial statements.






                                                                F-20
<PAGE>
<TABLE>
<CAPTION>

                                                    COSO POWER DEVELOPERS
                                                       AND SUBSIDIARY

                                         Consolidated Statements of Partners' Capital

                                         Years ended December 31, 2004, 2003, and 2002

                                                   (Dollars in thousands)


                                                             Caithness
                                                              Navy II                    New
                                                               Group,                    CTC
                                                                LLC                 Company, LLC             Total
                                                         -------------------      ------------------   -------------------
<S>                                                      <C>                      <C>                  <C>
Balance at December 31, 2001                             $      32,340.0                29,880.0              62,220.0

Distributions to partners                                      (10,081.0)              (10,081.0)            (20,162.0)

Net income                                                      21,651.5                21,651.5              43,303.0
                                                         -------------------      ------------------   -------------------

Balance at December 31, 2002                                    43,910.5                41,450.5              85,361.0

Distributions to partners                                       (5,082.5)               (5,082.5)            (10,165.0)

Net income                                                       4,944.0                 4,944.0               9,888.0
                                                         -------------------      ------------------   -------------------

Balance at December 31, 2003                                    43,772.0                41,312.0              85,084.0

Distributions to partners                                       (6,925.0)               (6,925.0)            (13,850.0)

Net income                                                       8,146.5                 8,146.5              16,293.0
                                                         -------------------      ------------------   -------------------

Balance at December 31, 2004                             $      44,993.5                42,533.5              87,527.0
                                                         ===================      ==================   ===================
</TABLE>

See accompanying notes to consolidated financial statements.





                                                             F-21
<PAGE>
<TABLE>
<CAPTION>
                                                    COSO POWER DEVELOPERS
                                                        AND SUBSIDIARY

                                             Consolidated Statements of Cash Flows

                                         Years ended December 31, 2004, 2003, and 2002

                                                   (Dollars in thousands)


                                                                             2004              2003               2002
                                                                       ----------------  ----------------   ----------------
<S>                                                                    <C>               <C>                <C>
Cash flows from operating activities:
  Net income                                                           $     16,293             9,888             43,303
  Adjustments to reconcile net income to
    net cash provided by operating activities:
       Depreciation and amortization                                         10,241            10,356             12,406
       Noncash interest expense                                                 217               217                217
       Noncash plant operating expense                                          209               213                 --
       Provision for doubtful accounts                                           --                82                 --
       Cumulative effect of change in accounting principle                       --             1,777                 --
       Changes in operating assets and liabilities:
         Accounts receivable, prepaid expenses, and other assets                488              (552)            (4,475)
         Advances to New CLPSI Company, LLC                                      (9)               (3)                 2
         Accounts payable and accrued liabilities                               481               (57)           (13,912)
         Amounts due from related parties                                        (9)             (510)               237
         Other                                                               (1,647)             (122)               366
         Amounts due to related parties                                         122               433             (7,020)
                                                                       ----------------  ----------------   ----------------
           Net cash provided by operating activities                         26,386            21,722             31,124
                                                                       ----------------  ----------------   ----------------
Cash flows from investing activities:
  Capital expenditures                                                         (949)           (5,611)              (896)
  (Increase) decrease in restricted cash                                       (328)            2,574             (5,338)
                                                                       ----------------  ----------------   ----------------

           Net cash used in investing activities                             (1,277)           (3,037)            (6,234)
                                                                       ----------------  ----------------   ----------------
Cash flows from financing activities:
  Distributions to partners                                                 (13,850)          (10,165)           (20,162)
  Advances to minority interest                                                (111)             (111)              (105)
  Repayment of project financing loan                                       (10,719)           (9,155)            (3,799)
                                                                       ----------------  ----------------   ----------------

           Net cash used in financing activities                            (24,680)          (19,431)           (24,066)
                                                                       ----------------  ----------------   ----------------

           Net change in cash                                                   429              (746)               824

Cash at beginning of year                                                        78               824                 --
                                                                       ----------------  ----------------   ----------------

Cash at end of year                                                    $        507                78                824
                                                                       ================  ================   ================
Supplemental cash flow disclosure:
  Cash paid for interest                                               $      6,254             7,110              7,551
</TABLE>


See accompanying notes to consolidated financial statements.




                                                               F-22
<PAGE>
                              COSO POWER DEVELOPERS
                                 AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                        December 31, 2004, 2003, and 2002

                             (Dollars in thousands)



(1)  Organization, Operation, and Business of the Partnership

     Coso Power Developers (CPD), a California general  partnership,  was formed
     on July  31,  1989 in  connection  with  financing  the  construction  of a
     geothermal  power plant on land at the China Lake Naval Air Weapons Station
     at Coso Hot Springs, China Lake,  California.  CPD is a general partnership
     between  Caithness Navy II Group,  LLC (Navy II), and New CTC Company,  LLC
     (New CTC), which are affiliated Delaware limited liability companies.

     The power plant is located on land owned by the United  States Navy (Navy),
     which CPD paid a royalty of 18% of revenues,  through  October 31, 2004. On
     November 1, 2004,  CPD entered into a new agreement (New Contract) with the
     Navy,  which  terminated the existing  contracts that were due to expire in
     2010. The New Contract  extends CPD's exclusive right to explore,  develop,
     and use certain  geothermal  resources  of Navy lands  through  October 31,
     2034.

     Under the terms of the New Contract,  the royalty paid to the Navy has been
     restructured so that CPD will pay a rate of 15% of gross revenues  received
     up to annual base revenue  amount.  Beyond the annual base revenue  amount,
     the Navy and CPD will  split the  additional  revenues,  on a 50/50  basis,
     until the Navy receives a maximum of 20% of all gross revenue.

     CPD sells all electricity  produced to Southern  California Edison (Edison)
     under a 20-year power purchase  contract (the PPC) expiring in 2010.  Under
     the terms of the PPC, Edison makes payments to CPD as follows:

     *    Contractual payments for energy delivered escalated at an average rate
          of  approximately  7.6% for the first ten years after the date of firm
          operation  (scheduled energy price period). The scheduled energy price
          period extended until January 2000.  After the scheduled  energy price
          period,  the energy payment adjusted to the actual avoided energy cost
          experienced   by  Edison.   Edison  entered  into  an  agreement  (the
          Agreement) with CPD on June 19,  2001 that addressed  renewable energy
          pricing  and  issues  concerning   California's   energy  crisis.  The
          Agreement, which was amended on November 30,  2001, established May 1,
          2002 as the date from which CPD  receives a fixed  energy rate of 5.37
          cents per  kilowatt  (kWh) for five (5) years.  From  January 1,  2002
          through  April 30,  2002,  CPD elected to receive  from Edison a fixed
          energy rate of 3.25 cents per kWh.  The average rate of energy paid to
          CPD for the years ended  December 31, 2004,  2003, and 2002, was 5.37,
          5.37, and 4.66 cents per kWh, respectively.  Starting May 1, 2002, CPD
          received  5.37  cents per kWh,  pursuant  to the  Agreement  discussed
          above.  Subsequent to the five-year period, Edison will be required to
          make energy  payments to CPD based on its avoided cost of energy until
          the PPC expires.  Beyond the five-year period,  CPD cannot predict the
          likely  level of  avoided  cost of  energy  prices  under the PPC and,
          accordingly,   the   revenues   generated   by  CPD  could   fluctuate
          significantly;

     *    Capacity  payments  which remain fixed over the life of the PPC to the
          extent that actual  energy  delivered  exceeds  minimum  levels of the
          plant capacity defined in the PPC; and

     *    Bonus payments to the extent that actual energy delivered  exceeds 85%
          of the plant capacity, are calculated monthly as stated in the PPC. In
          2004, 2003, and 2002, the bonus payments  aggregated  $2,138,  $2,138,
          and $2,138, respectively.

     Coso Operating Company, LLC (COC), an affiliated Delaware limited liability
     company, provides for the operation and maintenance of the geothermal power
     facilities and  administrative  services  pursuant to certain operation and
     maintenance  agreements  with New CTC,  the managing  general  partner (see
     note 7).

     The  partnership  agreement  provides  for  distributable  cash  flow to be
     allocated 50% each to New CTC and Navy II.  For purposes of allocating  net
     income to partners'  capital accounts and for income tax purposes,  profits
     and losses are allocated based on the aforementioned cash flow percentages.
     For income tax  purposes,  certain  deductions  and  credits are subject to
     special allocations as defined in the partnership agreements.

(2)  Summary of Significant Accounting Policies

     Consolidation

     The  accompanying  consolidated  financial  statements  include the assets,
     liabilities,  income, and expenses of CPD and its majority-owned subsidiary
     Coso  Transmission  Line  Partners   (collectively  the  Partnership)  (see
     note 3).  Intercompany  balances and transactions have been eliminated upon
     consolidation.

     The  consolidated   financial  statements  include  the  accounts  of  Coso
     Transmission  Line  Partners  (CTLP)  as a result  of the  adoption  of the
     Financial Accounting Standards Board (FASB)  Interpretation No. 46 (revised
     December 2003) (FIN 46R),  Consolidation of Variable Interest Entities,  an
     interpretation  of Accounting  Research Bulletin No. 51. An entity shall be
     subject to  consolidation  according to the  provisions  of FIN 46R, if, by
     design,  the holders of the equity  investment  at risk lack any one of the
     following  three  characteristics  of  a  controlling  financial  interest:
     (1) the  direct or  indirect  ability to make  decisions  about an entity's
     activities  through voting rights or similar rights;  (2) the obligation to
     absorb the expected losses of the entity if they occur; or (3) the right to
     receive the  expected  residual  returns of the entity if they  occur.  The
     Company  determined  that CTLP is a variable  interest entity under FIN 46R
     and  was  consolidated  effective  January 1,  2004.  The  effects  on  the
     Partnership's   consolidated  financial  statements  for  the  years  ended
     December 31,  2004 and 2003 were  increases of $2,431 and $2,542 to assets,
     and minority interest, respectively.

     The consolidated  financial  statements relating to prior periods have been
     retroactively  restated  to  consolidate  the  accounts of CTLP as a direct
     result of the adoption of FIN 46R.  There was no cumulative effect recorded
     upon the adoption of the Interpretation.

     Accounts Receivable and Revenue Recognition

     Accounts  receivable  primarily  consists  of  receivables  from Edison for
     electricity delivered and sold under the PPC. As of December 31,  2003, the
     Partnership established an allowance for doubtful accounts of $82, based on
     a dispute  with Edison  regarding a payment  for  capacity.  In October and
     November of 2003, Edison limited  generation to complete their transmission
     system maintenance,  resulting in lower capacity payments. CPD is disputing
     Edison's  claim that the forced  reduction in generation  was the result of
     scheduled  maintenance,  which  permits  Edison to  discount  the  capacity
     payment to CPD.

     Operating  revenues  are  recognized  as income  during the period in which
     electricity  is  delivered  to  Edison.  Subsequent  to  May 31,  2007,  as
     discussed in note 1, revenue is recognized based on Edison's avoided energy
     cost, until CPD's PPC expires.

     Periodic  increases in natural gas prices and imbalances between supply and
     demand, among other factors,  have at times led to significant increases in
     wholesale  electricity prices in California.  During those periods,  Edison
     had fixed tariffs with its retail customers that were  significantly  below
     the wholesale  prices it paid in  California.  That resulted in significant
     under-recoveries   by  Edison  of  its   electricity   purchase  costs.  On
     January 16,  2001,  Edison  announced  that it was  temporarily  suspending
     payments  for  energy  provided,  including  the  energy  provided  by  the
     Partnership,   pending  a  permanent  solution  to  its  liquidity  crisis.
     Subsequently,  pursuant to a California Public Utilities  Commission (CPUC)
     order,  Edison resumed making  payments to the  Partnership  beginning with
     power generated on March 27,  2001. Edison also made a payment equal to 10%
     of the  unpaid  balance  for  power  generated  from  November 1,  2000  to
     March 26, 2001 and paid interest on the outstanding amount at 7% per annum.
     That  payment was made  pursuant to the  Agreement  between  Edison and CPD
     described  in note 1.  The  Agreement,  as  amended,  which  received  CPUC
     approval in January  2002,  established  the fixed energy  rates  discussed
     above and set payment terms for past due amounts owed to the Partnership by
     Edison. Due to the uncertainty surrounding Edison's ability to make payment
     on  past  due  amounts,  collection  was  not  reasonably  assured  and the
     Partnership  did not  recognize  revenue of $38,045  from Edison for energy
     delivered during the period  November 1,  2000 through  March 26,  2001. On
     March 1,  2002,  Edison reached certain  financing  milestones and paid the
     Partnership $38,045 for electricity generated during the period November 1,
     2000 through March 26,  2001. The Partnership  recognized revenues for such
     electricity deliveries in March 2002.

     Revenue for capacity  payments is  recognized at the end of each month that
     capacity is provided under the PPC when  collection is reasonably  assured.
     Revenue for bonus  payments is recognized at the end of each month in which
     actual energy  delivered  exceeds 85% of the plant  capacity  stated in the
     PPC.

     In the event that the PPC is amended, the Partnership's accounting policies
     would be modified in accordance  with the guidance  established in Emerging
     Issues Task Force (EITF) 91-6, Revenue Recognition of Long-Term Power Sales
     Contracts,  and EITF 01-8,  Determining  Whether an Arrangement  Contains a
     Lease.

     Fixed Assets and Depreciation

     The  costs  of major  additions  and  betterments  are  capitalized,  while
     replacements,  maintenance,  and repairs  that do not improve or extend the
     life of the respective assets are expensed as incurred.

     Depreciation  of the power  plant and  transmission  line is  computed on a
     straight-line  basis over their estimated  useful life of 30 years and, for
     significant  additions,  the shorter of the useful life or the remainder of
     the 30-year life from the plant's commencement of operations.

     Wells and Resource Development Costs

     Wells and resource  development  costs include costs incurred in connection
     with the  exploration  and  development of geothermal  resources.  All such
     costs,  which  include dry hole costs,  the costs of drilling and equipping
     production   wells,   and   administrative   and  interest  costs  directly
     attributable  to the project,  are  capitalized  and  amortized  over their
     estimated  useful lives when  production  commences.  The estimated  useful
     lives of  production  wells  are ten  years  each;  exploration  costs  and
     development costs, other than production wells, are amortized over 30 years
     and,  for  significant  additions,  the  shorter of the useful  life or the
     remainder of the 30-year life from the plant's commencement of operations.

     Deferred Plant Overhaul Costs and Well Rework Costs

     Plant overhaul  costs are deferred and amortized over the estimated  period
     between overhauls, as these costs extend the useful lives of the respective
     assets.  These  deferred  costs of $199 and $246 at  December 31,  2004 and
     2003,  respectively,  are  included  in  property,  plant,  and  equipment.
     Currently, plant overhauls are amortized over three years from the point of
     completion.

     Production and injection rework costs included in plant operating  expenses
     are expensed as incurred. For the years ended December 31,  2004, 2003, and
     2002, such costs were $407, $0, and $328, respectively.

     Impairment of Long-Lived Assets

     Long-lived assets,  such as property,  plant, and equipment,  and purchased
     intangibles  subject to amortization,  are reviewed for impairment whenever
     events or changes in circumstances  indicate that the carrying amount of an
     asset may not be recoverable.  Recoverability of assets to be held and used
     is measured by a comparison of the carrying amount of an asset to estimated
     undiscounted  future cash flows  expected to be generated by the asset.  If
     the carrying amount of an asset exceeds its estimated future cash flows, an
     impairment  charge is recognized by the amount by which the carrying amount
     of the asset exceeds the fair value of the asset.  Assets to be disposed of
     would  be  separately  presented  in the  consolidated  balance  sheet  and
     reported  at the lower of the  carrying  amount or fair value less costs to
     sell,  and are no longer  depreciated.  The  assets  and  liabilities  of a
     disposed group classified as held for sale would be presented separately in
     the appropriate  asset and liability  sections of the consolidated  balance
     sheet.

     Deferred Financing Costs

     Deferred  financing costs as of December 31,  2004 and 2003 consist of loan
     fees and other costs of financing  that are amortized  over the term of the
     related financing.  Annual  amortization of the deferred financing costs is
     $217, and is included in noncash interest expense. Accumulated amortization
     at December 31, 2004 and 2003 was $3,090 and $2,873, respectively.

     Power Purchase Contract

     The PPC,  which is amortized on a  straight-line  basis over the  remaining
     term of the PPC,  will expire in 2010.  Annual  amortization  of the PPC is
     approximately  $2,794.  The PPC  consists  of a gross  carrying  amount  of
     $30,738,  and accumulated  amortization  at December 31,  2004 and 2003 was
     $16,301 and $13,506, respectively.

     Income Taxes

     There  is  no  provision   for  income  taxes  since  such  taxes  are  the
     responsibility  of the partners.  The net difference  between the tax basis
     and the reported amounts of property, plant, and equipment, net at December
     31, 2004 and 2003 was $86,322 and $91,420, respectively.

     Cash Equivalents

     For purposes of the statements of cash flows, the Partnership considers all
     money market instruments  purchased with initial maturities of three months
     or less to be cash equivalents.

     Restricted Cash and Investments

     As of  December 31,  2004 and  2003,  the  Partnership's  investments  were
     classified as held to maturity and reported at amortized cost.  Included in
     restricted cash and investments are capital expenditure reserves and a debt
     service  reserve for the project debt service  required by the project loan
     (see note 6).  The carrying  amount of restricted  cash and  investments at
     December 31,  2004  and 2003  approximated  fair  value,  which is based on
     quoted market prices as provided by the  financial  institution  that holds
     the investments.

     Use of Estimates

     The  preparation of  consolidated  financial  statements in conformity with
     U.S. generally accepted  accounting  principles requires management to make
     estimates  and  assumptions  that  affect the  reported  amounts of assets,
     liabilities,  partners'  capital,  and disclosure of contingent  assets and
     liabilities at the date of the  consolidated  financial  statements and the
     reported amounts of revenues,  expenses,  and the allocation of profits and
     losses  during  the   reportable   period.   Actual  results  could  differ
     significantly from those estimates.

     Fair Value of Financial Instruments

     The  carrying  amount of cash and cash  equivalents,  accounts  receivable,
     prepaid  expenses  and other  assets,  amounts  due from  related  parties,
     accounts  payable  and  accrued  liabilities,  and  amounts  due to related
     parties  approximated fair value as of December 31,  2004 and 2003, because
     of the relatively short maturity of these instruments.  The project loan as
     of  December 31,  2004 and 2003 has an estimated  fair value of $67,451 and
     $77,302,  respectively,  based on the  quoted  market  price of the  senior
     secured notes (see note 6).

     The investments in CTLP (see note 3) and advances to New CLPSI Company, LLC
     (CLPSI) (see note 4) approximate fair value.

     Asset Retirement Obligation

     In June 2001,  FASB issued  Statement  of  Financial  Accounting  Standards
     (SFAS) No. 143, Accounting for Asset Retirement Obligations. This Statement
     addresses  financial  accounting and reporting for  obligations  associated
     with the retirement of tangible  long-lived assets and the associated asset
     retirement costs and amends FASB No. 19, Financial Accounting and Reporting
     by Oil and Gas Producing  Companies.  The Statement  requires that the fair
     value of a liability  for an asset  retirement  obligation be recognized in
     the period in which it is incurred if a reasonable estimate of a fair value
     can be made, and that the associated  asset retirement costs be capitalized
     as part of the carrying  amount of the long-lived  asset.  The Statement is
     effective for  consolidated  financial  statements  issued for fiscal years
     beginning after June 15, 2002. On January 1, 2003, CPD adopted SFAS No. 143
     and  estimated  the  restoration  costs CPD  expects to incur when the land
     lease with the Navy expires. Under the land lease CPD is required to remove
     all  property,  plant,  and  equipment  to restore the land to its original
     state.  Adoption of  SFAS No. 143  resulted  in a loss from the  cumulative
     effect of a change in  accounting  principle  of $1,777,  a net increase in
     property,   plant,  and  equipment  of  $354,  and  an  increase  in  other
     liabilities  of $2,131.  On  November 1,  2004,  CPD  entered  into the New
     Contract with the Navy, extending their land lease through October 31, 2034
     (see  note 1).  Adoption  of the terms of the New  Contract  resulted  in a
     change in accounting estimate, resulting in a reduction of property, plant,
     and  equipment,  net of $316, a reduction of the  accumulated  liability of
     $1,719,  and an  increase  in interest  and other  income of $1,403.  As of
     December 31,  2004 and 2003, the accumulated  liability associated with the
     restorations  costs was $835 and $2,345,  respectively,  and is included in
     other liabilities.  Accretion expense for the years ended December 31, 2004
     and  2003  included  in  plant   operating   expense  was  $209  and  $213,
     respectively.  If CPD had adopted SFAS No. 143  retroactively to January 1,
     2002, net income for the year ended December 31,  2002 would have decreased
     by $215.

     Reclassifications

     Certain  balances in prior years have been  reclassified  to conform to the
     presentation adopted in the current year.

(3)  Investment in Coso Transmission Line Partners

     CTLP is a  partnership  owned  53.33%  by CPD  and  46.67%  by Coso  Energy
     Developers   (CED),   which  owns  the  transmission  line  and  facilities
     connecting the power plants owned by CPD and CED to the  transmission  line
     owned by Edison,  at  Inyokern,  California,  located 28 miles south of the
     plants.  CTLP charges CPD and CED for the use of the  transmission  line at
     amounts  sufficient for CTLP to recover its operating costs. The charges to
     CPD are eliminated in consolidation.

(4)  Advances to New CLPSI Company, LLC

     CLPSI is a wholly owned subsidiary of Caithness  Acquisition  Company,  LLC
     (CAC).  CLPSI purchases,  stores,  and distributes spare parts to CPD, CED,
     and  Coso  Finance   Partners  (CFP)   (collectively   known  as  the  Coso
     Partnerships).  Also, certain other maintenance  facilities utilized by the
     Coso  Partnerships  are owned by CLPSI.  CPD's  advances  to CLPSI fund the
     purchase of spare parts  inventory and other  assets.  CLPSI bills the Coso
     Partnerships  for  spare  parts  as  utilized  and  for  use of  the  other
     facilities at amounts sufficient for CLPSI to recover its operating costs.

(5)  Property, Plant, and Equipment

     Property, plant, and equipment at December 31, 2004 and 2003 consist of the
     following:
                                                         2004          2003
                                                       -------       -------
     Power, plant, and gathering system             $  148,960       149,775
     Transmission line                                  16,336        16,336
     Wells and resource development costs               59,598        59,762
                                                       -------       -------
                                                       224,894       225,873
     Less accumulated depreciation
     and amortization                                 (111,198)     (105,364)
                                                       -------       -------
                                                    $  113,696       120,509
                                                       =======       =======

(6)  Project Loan

     On May 28,  1999,  Caithness Coso Funding Corp.  (Funding Corp.),  a wholly
     owned subsidiary of the Coso Partnerships, raised $413,000 from an offering
     of senior secured notes. Funding Corp. loaned approximately $154,000 to CPD
     from the $413,000 debt raised from the offering of senior  secured notes on
     terms consistent with those of the senior secured notes. The loan consisted
     of one note of $69,350 at 6.80%,  which was paid off on December 15,  2001,
     and another note of $84,200 at 9.05%,  which has payments due semi-annually
     through December 15, 2009.

     The annual maturity of the project loan for each year ending December 31 is
     as follows:

                                                         Amount
                                                         ------
                  2005                              $    11,697
                  2006                                   11,738
                  2007                                   12,530
                  2008                                   12,392
                  2009                                   12,170
                                                         ------
                                                    $    60,527
                                                         ======

     The loan contains certain  restrictive  covenants that, among other things,
     limit the Partnership's ability to incur additional  indebtedness,  release
     funds from reserve  amounts,  make  distributions,  create loans, and enter
     into any transaction of merger or consolidation.

     The  Partnership,  Funding  Corp.,  CED, and CFP are jointly and  severally
     liable  for  the  repayment  of  the  senior  secured   notes,   which  are
     collateralized by the assets of the Coso Partnerships.

     The  annual  maturity  of the  senior  secured  notes for each year  ending
     December 31 is as follows:

                                                         Amount
                                                         ------
                  2005                              $    35,480
                  2006                                   38,286
                  2007                                   47,419
                  2008                                   49,261
                  2009                                   51,831
                                                        -------
                                                    $   222,277
                                                        =======

(7)  Related Party Transactions

     The amounts due from and to related parties at  December 31,  2004 and 2003
     consist of the following:

                                                     2004             2003
                                                   --------         --------
     Amounts due from related parties:
       Coso Energy Developers                    $     379              380
       New RVPI Company, LLC                            21               --
       Coso Operating Company, LLC                     865            1,122
       China Lake Joint Venture:
         Principal                                   1,562            1,562
         Accrued interest                            3,594            3,348
                                                     -----            -----
                                                 $   6,421            6,412
                                                     =====            =====
     Amounts due to related parties:
       Coso Finance Partners                     $     951              838
       Caithness Corporation                            79               --
       Caithness Coso Funding Corp.                    241              283
       Caithness Operating Company, LLC                 42               70
                                                     -----            -----
                                                 $   1,313            1,191
                                                     =====            =====


     COC and  Caithness  Operating  Company,  LLC  are  reimbursed  monthly  for
     non-third-party  costs incurred on behalf of CPD. These costs are comprised
     principally  of  direct  operating  costs of the CPD  geothermal  facility,
     allocable general and administrative costs, and an operator fee. The amount
     due from COC relates to advances for payments of  operating  expenses.  For
     each of the years ended December 31,  2004, 2003, and 2002, the Partnership
     paid COC an operator's fee of $418.

     CPD is  charged a  nonmanaging  fee  payable  to the  nonmanaging  partner,
     Navy II, or its assignee. For the years ended December 31,  2004, 2003, and
     2002, CPD paid $248, $243, and $241, respectively.

     CPD is charged by CLPSI for both its inventory usage and its portion of the
     expenses of operating  CLPSI.  The charges to CPD from CLPSI in 2004, 2003,
     and  2002,   which  are  included  in  plant   operating   expenses,   were
     approximately $81, $189, and $237, respectively.

     On  December 16,  1992,  CPD  retired  China  Lake Joint  Venture's  (CLJV)
     promissory  note due  CalEnergy,  resulting in the loan from CPD to CLJV of
     $1,562 at December 31,  1992. CLJV is an affiliated  venture.  Interest has
     been accrued on this loan for the years ended December 31,  2004, 2003, and
     2002 at 5%, 5%, and 5%, respectively.  Interest on the loan was $246, $234,
     and $229, in 2004, 2003, and 2002, respectively.

     The amount due to Funding Corp.  represents accrued interest for 15 days in
     December, related to the project loan (see note 6).

     During 1994, the Coso  Partnerships  entered into steam sharing  agreements
     under  which  the  partnerships  may  transfer  steam,  with the  resulting
     incremental revenue and royalty expense shared equally by the partnerships.
     In the second half of 1995,  interconnection  facilities between the plants
     were  completed  and the transfer of steam  commenced.  CPD's steam sharing
     resulted in an expense, included in energy revenues, of $6,213, $6,888, and
     $5,255 for the years ended December 31, 2004, 2003, and 2002, respectively.

(8)  Accounts Payable and Accrued Liabilities

     Accounts  payable and accrued  liabilities  at  December 31,  2004 and 2003
     consist of the following:

                                                          2004          2003
                                                        --------      --------
     Royalty payable                                    $ 1,094         1,044
     Other                                                1,278           847
                                                        --------      --------
                                                        $ 2,372         1,891
                                                        ========      ========

(9)  Plant Operating Expense

     Included in plant  operating  expense are general  administrative  expenses
     that include insurance,  property taxes, and other  professional  expenses.
     For the years ended  December 31,  2004,  2003, and 2002,  these costs were
     $5,306, $6,030, and $6,429, respectively.

(10) Employee Benefit Plan

     The Partnership has established a 401(k) plan (the Plan) for the benefit of
     eligible  employees who elect to participate.  Eligible employees may elect
     to contribute up to 15% of their annual  compensation,  as defined,  to the
     Plan. The Partnership  will match 50% of the employee's  contribution up to
     the first 6% of the employee's  salary.  Additionally,  the Partnership may
     elect to make a discretionary  profit sharing contribution to the Plan. The
     Partnership's  expense  relating to the Plan  approximated  $132, $127, and
     $125 in 2004, 2003, and 2002, respectively.

(11) Commitments and Contingencies

     The  Partnership  is required  to obtain a  "Financial  Guarantee  Bond for
     Closure  Costs"  (Water  Bond),  which  would  be  used  in  the  event  of
     noncompliance of the remediation  obligation for waste  discharge.  For the
     years ended  December 31,  2004 and 2003,  the fair value of the Water Bond
     that is reported as a noncurrent restricted investment is $135.

     Settlement  Agreement  between Edison and the California  Public  Utilities
     Commission

     On  September 23,  2002,  the United  States Court of Appeals for the Ninth
     Circuit  (Ninth  Circuit)  issued an opinion  and order on appeal  from the
     district court's stipulated judgment which affirmed the stipulated judgment
     in part  and  referred  questions  based  on  California  state  law to the
     California  Supreme Court.  The Ninth Circuit stated that if the settlement
     agreement  violated  California  state law, then the appeals court would be
     required to void the  stipulated  judgment.  The  California  Supreme Court
     accepted the Ninth  Circuit's  request to address the issues referred to in
     the September 23,  2002 ruling. On August 21,  2003, the California Supreme
     Court  found  that  state  laws  were  not  violated  as of  result  of the
     settlement  agreements.  On  December 19,  2003,  the Ninth  Circuit  fully
     affirmed the district court's  stipulated  judgment based on the reply from
     the California Supreme Court.

     Court of Appeals Decision on Line Loss Factor

     Edison  filed a  petition  for a writ of  review  of a  January  2001  CPUC
     decision,  claiming that the "floor" line loss factor of 0.95 for renewable
     generators  violated  the Public  Utility  Regulator  Policies Act of 1978.
     Subsequently,  the  California  Court  of  Appeals  issued  a  decision  on
     August 20,  2002 in response to the writ  affirming  the January  2001 CPUC
     decision,  except for the 0.95  "floor,"  which it  rejected as an abuse of
     discretion  by the CPUC.  While this matter was appealed to the  California
     Supreme Court,  the petition for review was denied.  The Coso  Partnerships
     are currently  evaluating potential actions to redress this issue. The Coso
     Partnerships' Agreements set the loss factor at 1.0 for energy sold between
     May 2002 through May 2007.  After April 2007,  the Coso  Partnerships  will
     have a line loss factor of less than 1.0,  effectively  decreasing revenues
     if Edison's challenge to the CPUC ruling stands. CPD cannot predict whether
     any subsequent action regarding this matter will be successful.

(12) Risks and Uncertainties

     CPD  sells  100% of the  electrical  energy  generated  to  Edison  under a
     long-term  PPC,  and may be  significantly  impacted  by risks  beyond  the
     Partnership's  control. Among the important factors that could cause future
     operating results to differ materially from those anticipated  include, but
     are  not  limited  to:  (i) risks  relating  to  the  uncertainties  in the
     California  energy  market,   (ii) the   financial   viability  of  Edison,
     (iii) risks  related to the operation of power plants,  (iv) the  impact of
     avoided cost pricing along with other pricing  variables  including natural
     gas,  (v) general  operating  risks,  including  resource  availability and
     regulatory  oversight,  (vi) changes in government  regulations,  (vii) the
     effects of competition,  (viii) the alleged  manipulation of the California
     energy market,  and (ix) acts of terrorism directed at the project or other
     facilities affecting the normal course of business.





                                      F-23
<PAGE>
<TABLE>
<CAPTION>
Quarterly Data (Unaudited)
                                           March 31(a)      June 30(a)     September 30(a)     December 31(a)
                                           -----------      ----------     ---------------     --------------
<S>                                        <C>                 <C>               <C>                 <C>
Caithness Coso Funding Corp:

        2004
        Total revenues                     $    5,675         5,689             5,482               5,414
        Operating income                          --            --                --                  --
          Net income                       $      --            --                --                  --

        2003
        Total revenues                     $    6,294         6,323             6,144               6,067
        Operating income                          --            --                --                  --
          Net income                       $      --            --                --                  --

        2002
        Total revenues                     $    6,854         6,856             6,659               6,562
        Operating income                          --            --                --                  --
          Net income                       $      --            --                --                  --


Coso Finance Partners:

        2004
        Total revenues                     $   13,111        14,583            19,847              13,003
        Operating income                        5,358         6,102             8,422               5,507
          Net income                       $    3,130         3,899             6,933               5,011

        2003
        Total revenues                     $   12,553        15,323            19,833              12,083
        Operating income                        5,039         6,348             9,829               4,539
          Net income                       $      760         3,836             7,400               3,708

        2002
        Total revenues                     $   45,498        14,328            19,761              12,478
        Operating income                       38,408         6,072             8,104               5,964
          Net income                       $   36,063         4,300             5,528               3,221


Coso Energy Developers:

        2004
        Total revenues                     $    9,099        11,034            15,467               9,146
        Operating income                        3,369         3,236             9,166               3,493
          Net income                       $    1,687         1,469             8,372               2,083

        2003
        Total revenues                     $    9,334        11,610            16,222               9,703
        Operating income                        4,212         5,559             9,073               3,093
          Net income                       $    1,514         3,721             7,265               1,381

        2002
        Total revenues                     $   43,480        11,190            16,591               9,991
        Operating income                       36,805         3,705             7,878               4,338
          Net income                       $   35,203         1,725             5,961               2,470


Coso Power Developers:

        2004
        Total revenues                     $    9,656        11,443            17,094               9,936
        Operating income                        2,705         4,539             9,516               3,280
          Net income                       $    1,127         2,970             8,693               3,503

        2003
        Total revenues                     $    8,512        10,825            16,513              10,299
        Operating income                        1,890         4,112             8,873               3,508
          Net income (loss)                $   (1,634)        2,330             7,174               2,018

        2002
        Total revenues                     $   44,422         9,771            15,838               9,561
        Operating income                       37,532         1,697             8,451               2,353
          Net income (loss)                $   36,085           (60)            6,796                 482
  </TABLE>

(a)  In the opinion of the Caithness  Coso Funding Corp.  and the  Partnerships,
     all adjustments,  which consist of normal  recurring  accruals to present a
     fair statement of the amounts shown for such periods, have been made.


Supplemental  Consolidated  Condensed  Combined  Financial  Information for Coso
Partnerships

The  following  information  presents  unaudited  condensed  combined  financial
statements of the Coso  Partnerships.  These  financial  statements  represent a
compilation of the financial  statements of Caithness  Coso Funding Corp.,  Coso
Finance  Partners,  Coso Energy  Developers  and Coso Power  Developers  for the
periods indicated.  This supplemental  financial  information is not required by
GAAP and has been provided to facilitate a more  comprehensive  understanding of
the  financial   position,   operating  results  and  cash  flows  of  the  Coso
Partnerships as a whole, which jointly and severally  guarantee the repayment of
Caithness Coso Funding  Corp's senior notes.  The unaudited  condensed  combined
financial  statements  should  be  read  in  conjunction  with  each  individual
Partnership's financial statements and their accompanying notes.



                                      F-24
<PAGE>
<TABLE>
<CAPTION>
                                                       COSO PARTNERSHIPS

                                    UNAUDITED CONSOLIDATED CONDENSED COMBINED BALANCE SHEETS

                                                    (Dollars in thousands)


                                                                             December 31,       December 31,
                                                                                 2004               2003
<S>                                                                            <C>               <C>
              Assets:

Current assets:
  Cash...........................................                            $   1,794             2,135
  Restricted cash and cash equivalents...........                               32,622            29,495
  Accounts receivable, net.......................                               21,831            21,740
  Prepaid expenses and other.....................                                2,266             2,796
  Inventory......................................                                5,357             5,270
  Amounts due from related parties...............                                6,787             6,829
                                                                                ------            ------
          Total current assets                                                  70,657            68,265

Restricted cash and cash equivalents.............                               15,250            13,598
Property, plant and equipment, net...............                              371,223           386,899
Power purchase agreement, net....................                               37,308            42,323
Deferred financing costs, net....................                                3,938             4,725
                                                                               -------           -------

          Total assets...........................                            $ 498,376         $ 515,810
                                                                               =======           =======


              Liabilities and Partners' Capital:

Current Liabilities:
  Accounts payable and accrued liabilities......                             $   8,684         $   8,508
  Amounts due to related parties................                                 1,865             1,588
  Current portion of project loans..............                                35,480            31,332
                                                                                ------            ------
          Total current liabilities                                             46,029            41,428


Other liabilities...............................                                17,746            19,714
Amounts due to related parties..................                                26,449            25,809
Project loan....................................                               186,797           222,282
                                                                               -------           -------

          Total liabilities.....................                               277,021           309,233


Partners' capital................................                              221,355           206,577
                                                                               -------           -------

          Total liabilities and partners' capital                            $ 498,376         $ 515,810
                                                                               =======           =======





                  See accompanying notes to the unaudited condensed combined financial statements.


</TABLE>

                                                       F-25
<PAGE>
<TABLE>
<CAPTION>
                                                      COSO PARTNERSHIPS

                              UNAUDITED CONSOLIDATED CONDENSED COMBINED STATEMENTS OF OPERATIONS

                                                   (Dollars in thousands)


                                                                Twelve Months        Twelve Months       Twelve Months
                                                                    Ended                Ended              Ended
                                                                 December 31,        December 31,        December 31,
                                                                     2004                2003                2002
                                                                 ------------        ------------        ------------
<S>                                                             <C>                  <C>                 <C>
Revenue:
  Energy revenues............................                    $ 111,251            $ 110,587           $ 205,151
  Capacity revenues..........................                       42,168               42,223              47,758
                                                                   -------              -------             -------

       Total revenue.........................                      153,419              152,810             252,909
                                                                   -------              -------             -------
Operating expenses:
  Plant operating expenses...................                       34,368               32,883              31,777
  Royalty expense............................                       23,291               23,379              22,311
  Depreciation and amortization..............                       30,775               30,172              37,242
                                                                    ------               ------              ------

       Total operating expenses..............                       88,434               86,434              91,330
                                                                    ------              -------             -------

       Operating income......................                       64,985               66,376             161,579
                                                                    ------               ------             -------

Other (income)/expenses:
  Interest and other income..................                       (6,939)              (3,191)             (3,923)
  Interest expense...........................                       22,260               24,826              26,941
  Non cash interest expense..................                          787                  787                 787
                                                                    ------               ------              ------

       Total other expenses..................                       16,108               22,422              23,805
                                                                    ------               ------              ------

    Income before cumulative effect of change
       in accounting principle...............                       48,877               43,954             137,774

    Cumulative effect of change in accounting
       principle.............................                           --                4,481                  --
                                                                    ------               ------             -------


       Net income............................                    $  48,877            $  39,473           $ 137,774
                                                                    ======               ======             =======





                       See accompanying notes to the unaudited condensed combined financial statements.


</TABLE>
                                                               F-26

<PAGE>
<TABLE>
<CAPTION>
                                                         COSO PARTNERSHIPS

                                  UNAUDITED CONSOLIDATED CONDENSED COMBINED STATEMENTS OF CASH FLOWS

                                                      (Dollars in thousands)


                                                              Twelve Months      Twelve Months        Twelve Months
                                                                  Ended              Ended               Ended
                                                               December 31,       December 31,         December 31,
                                                                   2004               2003                 2002
<S>                                                            <C>                <C>                  <C>

Net cash provided by (used in) operating activities...         $   80,596         $   76,491           $  144,902
Net cash provided by (used in) investing activities...            (15,390)           (12,881)             (18,962)
Net cash provided by (used in) financing activities...            (65,547)           (67,996)            (119,683)
                                                                   ------             ------              -------

Net change in cash....................................         $     (341)        $   (4,386)          $    6,257
                                                                   ======             ======              =======
Supplemental cash flow disclosure:

            Cash paid for interest....................         $   22,385         $   24,950           $   27,026
                                                                   ======             ======               ======



                  See accompanying notes to the unaudited condensed combined financial statements.


</TABLE>

                                                         F-27
<PAGE>

                                COSO PARTNERSHIPS
             NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED COMBINED
                              FINANCIAL STATEMENTS


(1)  Basis of Presentation

The accompanying  unaudited condensed combined financial statements were derived
from the stand alone unaudited condensed financial  statements of Caithness Coso
Funding  Corp.,  Coso Finance  Partners,  Coso Energy  Developers and Coso Power
Developers (the "Coso Partnerships"). All intercompany accounts and transactions
were  eliminated.  This financial  information has been provided to facilitate a
more comprehensive  understanding of the financial  position,  operating results
and cash flows of the Coso  Partnerships  as a whole.  The  unaudited  condensed
combined financial statements should be read in conjunction with each individual
Partnership's unaudited condensed financial statements.

(2)  Accounts Receivable and Revenue Recognition

The Coso  Partnerships  sell all  electricity  produced to  Southern  California
Edison (Edison) under long-term power purchase contracts. Due to the uncertainty
surrounding Edison's ability to make payment on past due amounts, collection was
not reasonably assured and the Coso Partnerships had not recognized revenue from
Edison for energy delivered during the period November 1, 2000 through March 26,
2001.

On March 1, 2002, the Coso Partnerships  recognized revenue for energy delivered
from  November 1, 2000  through  March 26, 2001 of $112.4  million,  when Edison
reached certain financing  milestones and paid the Coso Partnerships for revenue
generated but not recognized  for the period  November 1, 2000 through March 26,
2001.

(3)  Reclassifications

Certain  balances  in prior  years  have been  reclassified  to  conform  to the
presentation adopted in the current year.




                                      F-28
<PAGE>

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

          None.


Item 9A.  Controls and Procedures.

     The Registrants'  Chief Executive  Officer and Chief Financial Officer (the
Registrant's  principal  executive  officer  and  principal  financial  officer,
respectively) have concluded, based on their evaluation as of December 31, 2004,
that the design and  operation  of the  Registrant's  "disclosure  controls  and
procedures" (as defined in Rules 13a-15(e) under the Securities  Exchange Act of
1934,  as amended  (Exchange  Act)) are  effective  to ensure  that  information
required to be disclosed by the  Registrant in the reports filed or submitted by
the  Registrant  under the Exchange  Act is  accumulated,  recorded,  processed,
summarized  and  reported  to  the   Registrant's   management,   including  the
Registrants'  principal  executive officer and principal  financial officer,  as
appropriate  to allow timely  decisions  regarding  whether or not disclosure is
required.

     During the period ended  December  31,  2004,  there were no changes in the
Registrant's  "internal  controls over financial  reporting" (as defined in Rule
13a-15(f)  under  the  Exchange  Act)  that  have  materially  affected,  or are
reasonably likely to materially affect, the Registrant's  internal controls over
financial reporting.

                                       18

Item 9B.  Other Information.

     The  Registrants'  do not have any  additional  information  required to be
disclosed in a report on Form 8-K during the fourth quarter of 2004 that was not
already reported on the Form 8-K filed November 1, 2004.

                                    Part III

Item 10.  Directors and Executive Officers of the Registrant.


     The following  table sets forth the persons who served as our directors and
executive officers as of December 31, 2004:
<TABLE>
<CAPTION>
       Name                          Age                         Position(s)
       ----                          ---                         -----------
<S>                                  <C>              <C>
James D. Bishop, Sr.                  71               Director, Chairman and Chief Executive Officer

Leslie J. Gelber                      48               Director, President and Chief Operating Officer

James D. Bishop, Jr.                  44               Director, Vice Chairman

Christopher T. McCallion              43               Director, Executive Vice President and Chief Financial
                                                       Officer

Kenneth P. Hoffman                    52               Senior Vice President

Mark A. Ferrucci                      52               Director

David V. Casale                       41               Vice President and Controller

John A. McNamara                      45               Vice President Finance

Barbara Bishop Gollan                 46               Vice President
</TABLE>

     James D. Bishop,  Sr., Chairman,  Chief Executive Officer and a Director of
Funding  Corp.  and of Caithness  Energy,  has served as a Director of Caithness
Equities  Corporation  (formerly  known  as  Caithness  Corporation)  since  its
inception  in 1975.  Mr.  Bishop  served  as  Caithness  Equities  Corporation's
President  from its inception  until December 1986 and has served as Chairman of
Caithness  Equities  Corporation since January 1987. Mr. Bishop also serves as a
director for various other entities which engage in independent power production
and natural resource  exploration and development.  Mr. Bishop holds a Master of
Business  Administration  degree from Harvard  Business School and a Bachelor of
Arts degree from Yale  University.  Mr. Bishop is the father of James D. Bishop,
Jr. and Barbara Bishop Gollan.

     Leslie J.  Gelber,  President,  Chief  Operating  Officer and a Director of
Funding  Corp.  and of  Caithness  Energy,  has  served as  President  and Chief
Operating Officer of Caithness Equities Corporation since January 1999. Prior to
joining Caithness Equities Corporation,  Mr. Gelber served as President of Cogen
Technologies,  Inc.,  which is also  engaged in the field of  independent  power
production,  from August 1998 until December 1998.  From July 1993 to July 1998,
Mr.  Gelber  served  as  President  of  ESI  Energy,   Inc.,  the  non-regulated
independent  power company owned by FPL Group, Inc. Mr. Gelber holds a Master of
Business Administration degree from the University of Miami and holds a Bachelor
of Arts degree in Economics from Alfred University.

                                       19

     James D. Bishop,  Jr., Vice Chairman and a Director of Funding Corp. and of
Caithness Energy,  joined Caithness  Equities  Corporation in 1988 and served as
President and Chief Operating  Officer of Caithness  Equities  Corporation  from
November 1995 until  December  1998. Mr. Bishop also serves on all the boards of
directors  and  management   committees  of  the  entities  and  joint  ventures
affiliated  with Caithness  Equities  Corporation.  Mr. Bishop holds a Master of
Business Administration degree from the Kellogg Graduate School of Management at
Northwestern  University  and holds a Bachelor of Science  degree  from  Trinity
College.  Mr.  Bishop is the son of James D.  Bishop,  Sr.  and the  brother  of
Barbara Bishop Gollan.

     Christopher T. McCallion, Executive Vice President, Chief Financial Officer
and a  Director  of  Funding  Corp.  and of  Caithness  Energy,  served  as Vice
President and  Controller of Caithness  Equities  Corporation  from July 1991 to
November 1995,  and has served as Executive  Vice President and Chief  Financial
Officer of Caithness  Equities  Corporation  since November 1995. Mr.  McCallion
holds a Bachelor of Science degree from Seton Hall University.

     Kenneth P. Hoffman a Senior Vice President of Funding Corp and of Caithness
Energy, joined Caithness Equities Corporation in March of 2000. Prior to joining
Caithness,  Mr. Hoffman was a Vice President of FPL Energy, Inc. From 1989 until
1993 he was the Vice President of Business Management of ESI Energy, Inc. Before
1989,  Mr.  Hoffman was employed by Florida Power & Light  Company.  Mr. Hoffman
holds a Master of  Business  Administration  degree from  Florida  International
University  and a  Bachelor  of  Science  degree  from  Rochester  Institute  of
Technology.

     Mark  A.  Ferrucci,  a  Director  of  Funding  Corp.,  has  served  as  the
independent  director of Funding Corp. since May 1999. From 1977 until 2002, Mr.
Ferrucci  was an  employee  of CT  Corporation  System,  where he  served  as CT
Corporation  System's  Assistant  Secretary and as Assistant Vice President from
1992 to 2002.  At  present,  Mr.  Ferrucci  operates as a sole  proprietor  that
provides corporate staffing services to businesses and law firms.

     David V. Casale,  Vice President and the Controller of Funding Corp. and of
Caithness Energy joined Caithness Equities  Corporation in December 1991 and has
served as Vice President and as its  Controller  since November 1995. Mr. Casale
also  serves on the  boards  of  directors  of joint  ventures  affiliated  with
Caithness Equities Corporation.  Mr. Casale holds a Bachelor of Arts degree from
Adelphi University.

     John A.  McNamara,  Vice  President  of  Finance of  Funding  Corp.  and of
Caithness Energy, joined Caithness Equities Corporation in September of 1990 and
has served as Vice President  since 1999.  Prior to joining  Caithness  Equities
Corporation,  Mr.  McNamara  was a broker  with  Bradley &  Company,  an account
executive  with First  Georgetown  Securities,  Inc.  and a staff  member of the
United  States  Senate  Committee  on Small  Business.  He received a Masters of
Business Administration degree from Georgetown University and a Bachelor of Arts
degree from Denison University.

     Barbara  Bishop  Gollan,  Vice  President of Funding Corp. and of Caithness
Energy, joined Caithness Equities Corporation as Vice President in October 1990.
Ms.  Gollan  has  authored  and  co-authored  a number  of  technical  papers on
geothermal  systems,  which were presented to the Geothermal  Resources Council,
the Geologic Society of America and the Stanford Geothermal Workshop. Ms. Gollan
holds a Master of  Science  degree in Geology  and  Geochemistry  from  Stanford
University and holds a Bachelor of Arts degree from Amherst College.  Ms. Gollan
is the daughter of Mr.  James D. Bishop,  Sr. and the sister of James D. Bishop,
Jr.

     The Board of Directors  appointed Mr. Ferrucci as an independent  director.
The  unanimous  affirmative  vote  of our  Board  of  Directors  (including  Mr.
Ferrucci) is required  before certain actions can be taken,  including,  but not
limited to, (1)  engaging in any  business  or activity  other than  issuing the
senior secured notes and making the related loans to the Coso Partnerships,  (2)
incurring  any debt, or assuming or  guaranteeing  any debt of any other entity,
(3)  dissolving or  liquidating,  (4)  consolidating,  merging or selling all or
substantially  all of our assets or (5) instituting any bankruptcy or insolvency
proceedings.

                                       20

Item 11. Executive Compensation.

     None of the directors or executive  officers of Funding Corp.  receives any
compensation for his or her services, except Mr. Ferruci, who receives $8,400 in
compensation annually for services provided.


Item 12. Security Ownership of Certain Beneficial Owners and Management.

     The following table sets forth, as of December 31, 2004 certain information
regarding the beneficial ownership of Coso Funding Corp.'s voting securities and
the  beneficial  ownership  of  the  voting  securities  of  each  of  the  Coso
Partnerships by:

(1)  Each person who is known by the  Registrants  and the Coso  Partnerships to
     beneficially own 5% or more of Coso Funding Corp.'s voting securities or 5%
     or more of the voting securities of any Coso Partnership,

(2)  Each of Coso Funding Corp.'s directors and executive  officers who also act
     in  similar  capacities  on behalf  of the  managing  partner  of each Coso
     Partnership  and each of the delegates to the management  committee of each
     Coso Partnership, and

(3)  All of Coso Funding Corp.'s  directors and executive  officers who also act
     in similar capacities for the managing partnership of each Coso Partnership
     and  all  of the  delegates  to  the  management  committee  of  each  Coso
     Partnership as a group.

     Beneficial  ownership has been  determined  in  accordance  with Rule 13d-3
under the  Securities  Exchange  Act of 1934,  as amended.  Except as  otherwise
noted, each person named below has an address in care of our principal executive
offices.
<TABLE>
<CAPTION>
                               Beneficial Ownership of Coso Funding Corp. and the Coso Partnerships

                                               Percent Indirect      Percent Indirect      Percent Indirect      Percent Indirect
                                                  Beneficial            Beneficial            Beneficial            Beneficial
             Name and Address of                 Ownership in          Ownership in          Ownership in          Ownership in
              Beneficial Owner                   Coso Funding           the Navy I             the BLM              the Navy II
              ----------------                       Corp.             Partnership           Partnership            Partnership
                                                     -----             -----------           -----------            -----------
 <S>                                             <C>                  <C>                  <C>                   <C>
 James D. Bishop, Sr. (1)(2)..............           --                   --                    --                     --

 Leslie J. Gelber (1)(3)..................           --                   --                    --                     --

 James D. Bishop, Jr. (1)(4)..............          17.3%                16.9%                 19.3%                  15.7%

 Christopher T. McCallion (1)(3)..........           --                   --                    --                     --

 Kenneth P. Hoffman (1)(3)................           --                   --                    --                     --

 Larry K. Carpenter (1)(3)................           --                   --                    --                     --

 Mark A. Ferrucci.........................           --                   --                    --                     --

 David V. Casale (1)(3)...................           --                   --                    --                     --

 John A. McNamara (1)(3)..................           --                   --                    --                     --

 Barbara Bishop Gollan (1)(3)(5)..........           --                   --                    --                     --

 Dominion Energy, Inc. (6)................           *                    --                    7.8%                   2.8%
    901 East Byrd Street
    Richmond, VA  23219

                                                                21

 Mojave Energy Company (7)................           6.1%                 5.5%                  7.7%                   5.2%
    c/o Davenport Resources, Inc.
    200 Railroad Avenue, 3rd floor
    Greenwich, CT  06830

 ArcLight Clean Power Investors, LLC                13.96%                13.6%                 14.7%                  13.3%
 (8)......................................
    200 Clarendon Street
    Boston, MA  02117

 All directors, executive officers
 and management committee delegates
 as a group...............................           21.4%                17.4%                 30.2%                  16.6%
</TABLE>

*     Less than 5.0%.
(1)  The address of such person is c/o Caithness Corporation,  565 Fifth Avenue,
     29th Floor, New York, New York 10017-2478.
(2)  James D. Bishop,  Sr. is the beneficiary of The James D. Bishop Trust--2002
     ("Bishop,  Sr.  2Trust"),  which owns shares of common  stock of  Caithness
     Equities Corporation (f/k/a Caithness Corporation), Mojave Power, Inc., and
     Mojave Power II, Inc., and  membership  units in Caithness  1997,  LLC, the
     voting  rights of which have been  transferred  to The  Caithness  Entities
     Voting  Trust,  the  trustee  of which is James D.  Bishop,  Jr.  Caithness
     Equities  Corporation  (f/k/a Caithness  Corporation),  Mojave Power, Inc.,
     Mojave Power II Inc.,  and  Caithness  1997,  LLC own,  indirectly  through
     various entities,  general partnership interests in the Navy I Partnership,
     the BLM Partnership and the Navy II Partnership, which collectively own all
     of the shares of common  stock of Funding  Corp.  The Bishop,  Sr. Trust is
     irrevocable.  James D.  Bishop,  Sr.,  therefore,  does not have  voting or
     investment  power over these shares of common  stock of Caithness  Equities
     Corporation (f/k/a Caithness Corporation), Mojave Power, Inc., Mojave Power
     II, Inc. and these membership interests in Caithness 1997, LLC.
(3)  Indirect  owner of  economic  interests  in the Coso  Partnerships  through
     Caithness Equities  Corporation's  (f/k/a Caithness  Corporation)  employee
     incentive plans, which economic interests are not listed on this table.
(4)  James D. Bishop,  Jr. is: (i) the  beneficiary of The James D. Bishop,  Jr.
     Irrevocable  Trust--1996  (the "Bishop,  Jr. Trust"),  which owns shares of
     common   stock  of  Caithness   Equities   Corporation   (f/k/a   Caithness
     Corporation),  and  membership  units in  Caithness  1997,  LLC, the voting
     rights of which have been  transferred  to the  Caithness  Entities  Voting
     Trust,  the  trustee of which is James D.  Bishop,  Jr.;  (ii) the owner of
     common   stock  of  Caithness   Equities   Corporation   (f/k/a   Caithness
     Corporation)  and Mojave Power,  Inc.,  and  membership  units in Caithness
     1997,  LLC; and (iii) the trustee of The  Caithness  Entities  Voting Trust
     which  possesses  sole voting  control  over the shares of common  stock of
     Caithness Equities Corporation (f/k/a Caithness Corporation), Mojave Power,
     Inc.,  Mojave Power II,  Inc.,  and the  membership  interests in Caithness
     1997,  LLC  held by the  Bishop,  Sr.  Trust,  The  Barbara  Bishop  Gollan
     Irrevocable  Trust--1996 (the "Gollan Trust"),  The Elizabeth Bishop DeLuca
     Irrevocable Trust--1996 and The Linda Bishop Fotiu Irrevocable Trust--1996.
     The interests listed in (i) and (ii) above entitle James D. Bishop,  Jr. to
     the following indirect beneficial ownership interests:  Funding Corp. 1.6%;
     Navy I Partnership  1.6%;  BLM  Partnership  1.5%;  and Navy II Partnership
     1.6%. James D. Bishop, Jr. disclaims  beneficial ownership of the interests
     listed in (iii) above.
(5)  Barbara Bishop Gollan is the  beneficiary  of the Gollan Trust,  which owns
     shares of common stock of Caithness  Equities  Corporation (f/k/a Caithness
     Corporation),  and  membership  units in  Caithness  1997,  LLC, the voting
     rights of which have been  transferred  to The  Caithness  Entities  Voting
     Trust,  the trustee of which is James D.  Bishop,  Jr. The Gollan  Trust is
     irrevocable.  Barbara  Bishop  Gollan,  therefore,  does not have voting or
     investment  power over these shares of common  stock of Caithness  Equities
     Corporation (f/k/a Caithness Corporation).
(6)  Dominion  Energy,  Inc. owns: (i) a limited  liability  company  membership
     interest in Caithness BLM Group, LP, a Delaware limited partnership,  which
     owns a limited  liability  company  membership  interest in Caithness  Coso
     Holdings,  LLC,  which  owns a  general  partnership  interest  in the  BLM
     Partnership;  and (ii) a limited liability company  membership  interest in
     Navy II Group  which  owns a general  partnership  interest  in the Navy II
     Partnership.
                                       22

(7)  Mojave Energy Company owns limited liability company  membership  interests
     in Caithness Power, LLC, which owns,  indirectly  through various entities,
     general partnership interests in each of the Coso Partnerships.
(8)  ArcLight  Clean  Power  Investors,   LLC  owns  limited  liability  company
     membership  interests in Caithness Investors,  LLC, which owns,  indirectly
     through various entities, general partnership interests in each of the Coso
     Partnerships.


Item 13. Certain Relationships and Related Transactions.

The Coso Partnerships

     Each of the Coso Partnerships has two general partners,  a managing partner
and  a  non-managing  partner.   Under  the  amended  and  restated  partnership
agreement,   the  managing   partner  of  each  Coso  Partnership  is  generally
responsible  for the  management  and  control of the  day-to-day  business  and
affairs.  The managing  partner of the Navy I  Partnership  is New CLOC Company,
LLC, a Delaware  limited  liability  company,  the  managing  partner of the BLM
Partnership is New CHIP Company,  LLC, a Delaware limited  liability company and
the  managing  partner of the Navy II  Partnership  is New CTC  Company,  LLC, a
Delaware  limited  liability  company.  The  non-managing  partner of the Navy I
Partnership is ESCA, LLC, a Delaware limited liability company, the non-managing
partner of the BLM  Partnership  is  Caithness  Coso  Holdings,  LLC, a Delaware
limited  liability  company,  and  the  non-managing  partner  of  the  Navy  II
Partnership  is  Caithness  Navy II Group,  LLC,  a Delaware  limited  liability
company.

     Each managing partner is a limited  liability  company managed by a manager
who is appointed by Caithness Acquisition Company, LLC (CAC), the sole member of
each  managing  partner.  The manager is  responsible  for the  ordinary  course
management and operations by its Coso  Partnership.  CAC has appointed itself as
the manager of each managing partner. CAC has also appointed Mr. Ferrucci as the
independent manager of each managing partner. (In addition, each of the managing
members  of  the  non-managing  partners  has  appointed  Mr.  Ferrucci  as  the
independent  manager  of  that  non-managing   partner.)  The  approval  of  the
independent manager is required before the managing partner (or the non-managing
partner,  as the case may be) may take  certain  actions that do not involve the
ordinary course  management and operations by the Coso  Partnerships of the Coso
projects,  including,  among others, (1) commencing any bankruptcy or insolvency
proceeding involving the managing partner, (2) incurring any debt in the name of
the managing partner for which it would be liable, (3) dissolving,  liquidating,
consolidating or merging,  or selling all or substantially all of the assets of,
its  respective  Coso  Partnership,  or (4) engaging in any business or activity
other than acting as the managing  partner of its respective  Coso  Partnership.
Each managing  partner also has its  officers,  who are also officers of Funding
Corp. who act on behalf of the managing partners of the Coso Partnerships.

     CAC, a limited liability company, is the manager and sole member of each of
the managing  partners.  Caithness Energy, LLC (Caithness Energy) as the manager
and sole owner of CAC, has delegated its role as manager of CAC to the CAC board
of directors,  including  the power to manage the managing  partners of the Coso
Partnerships.  Each  managing  partner's  officers are also the officers of CAC.
None of the  persons  acting  on behalf of the Coso  Partnerships  receives  any
compensation  from the Coso  Partnerships  for his or her services,  except that
nominal compensation is paid in consideration for Mr. Ferrucci's services.

     Caithness  Energy  is  governed  by a  board  of  directors  and not by its
members. The directors of Funding Corp., other than Mr. Ferrucci, also currently
serve as  members  of the board of  directors  of  Caithness  Energy.  Under the
limited  liability company  agreement of Caithness  Energy,  Caithness  Equities
Corporation  (formerly known as Caithness  Corporation) is entitled to appoint a
number of members to the Board of Directors of Caithness Energy who hold, in the
aggregate,  a majority of the votes of all  members of such board of  directors.
Caithness  Corporation's present appointees are Messrs. Bishop, Sr., and Bishop,
Jr. In addition,  Messrs.  Gelber,  and McCallion serve as voting members of the
board of directors of Caithness  Energy pursuant to their  individual  executive
compensation agreements with Caithness Energy. These four individuals,  together
with Mr. Ferrucci, serve as the CAC board of directors.

                                       23

Management Committees

     Under  the  amended  and  restated  partnership   agreement  of  each  Coso
Partnership,  the managing  partner is subject to the directives of a management
committee which oversees the business  operations of the Coso  Partnership.  The
managing  partner of a Coso  Partnership may not take certain  specific  actions
without  the  consent  of the  management  committee  of that Coso  Partnership.
However,  the  management  committee may not direct the managing  partner of the
Coso  Partnership  to take any action  over which the  independent  manager  has
exclusive  authority without the requisite approval of the independent  manager.
The management  committee of each Coso  Partnership  consists of four delegates,
two of  which  are  appointed  by the  managing  partner  and two of  which  are
appointed by the non-managing partner. Each partner may substitute or change its
delegates.

     Under  the  amended  and  restated  partnership   agreements  of  the  Coso
Partnerships,  each partner may appoint one delegate  with multiple  votes.  The
names of the  delegates  appointed  by  affiliates  of  Caithness  Energy to the
management committees of the Coso Partnerships are set forth below.

     As of December  31,  2004,  the  following  persons were the members of the
management  committee of each Coso Partnership,  as applicable.  Each person has
two votes on each management committee on which he serves:
<TABLE>
<CAPTION>
       Name                        Age                          Partnership(s)
       ----                        ---                          --------------
<S>                                <C>      <C>
 Kenneth P. Hoffman                 52       Navy I Partnership, BLM Partnership, Navy II Partnership

 Christopher T. McCallion           43       Navy I Partnership, BLM Partnership, Navy II Partnership
</TABLE>

     Certain  information  regarding  Messrs.  Bishop and  McCallion is provided
above.


Management Committee Fees

     The members of the  management  committees  are not  entitled to any direct
compensation  from Funding Corp. or the Coso  Partnerships.  However,  each Coso
Partnership   previously  paid  its  two  general  partners'  annual  management
committee fees for their participation on the management  committee of that Coso
Partnership.  The following  table sets forth,  for the years ended December 31,
2004,  2003 and 2002,  the total  amount of  management  committee  fees paid or
payable by each of the Coso Partnerships to its partners:

                                                Year Ended December 31
                                                ----------------------

                                        2004             2003             2002
                                        ----             ----             ----

Navy I Partnership
   ESCA.......................      $  248,000       $  243,000       $  241,000
                                       =======          =======          =======

BLM Partnership
   CCH........................      $  248,000       $  243,000       $  241,000
                                       =======          =======          =======

Navy II Partnership
   Navy II Group..............      $  248,000       $  243,000       $  241,000
                                       =======          =======          =======


Funding Corp.

     As of December 31, 2004,  the  authorized  capital  stock of Funding  Corp.
consisted of 1,000 shares of common stock,  par value 1 cent per share, of which
300 shares were  outstanding.  The outstanding  common stock is owned equally by
the Coso Partnerships.

                                       24

Coso Partnerships

     The  directors and  executive  officers  also act in similar  capacities on
behalf of the  managing  partner of each Coso  Partnership  and,  except for Mr.
Ferrucci, on behalf of CAC and Caithness Energy.  Several of these directors and
executive  officers  beneficially  own  the  securities  of  Caithness  Equities
Corporation,  who  beneficially  owns the  majority of  membership  interests of
Caithness Energy.


Item 14. Principal Accounting Fees and Services

     Audit Fees
1)   The  aggregate  Audit Fees billed for  professional  services for the years
     ended  December 31, 2004,  2003 and 2002  rendered by KPMG for the audit of
     the annual financial statements and review of financial statements included
     in the Form 10-Q or services  provided in  connection  with  statutory  and
     regulatory filings or engagements were approximately $268,000, $249,000 and
     $249,000, respectively.

     Non-Audit Fees
2)   There were no  Audit-Related  Fees billed for the years ended  December 31,
     2004,  2003 and 2002 for assurance  and related  services by KPMG that were
     related  to the  performance  of  the  audit  or  review  of the  financial
     statements.

     Tax Fees
3)   The aggregate Tax Fees billed for professional services for the years ended
     December 31, 2004, 2003 and 2002 rendered by KPMG for tax  compliance,  tax
     advice, and tax planning were approximately  $33,000,  $31,200 and $58,500,
     respectively.  The nature of tax services provided consisted of preparation
     and review of Federal and State income tax returns.

     All Other Fees
4)   There were no Other Fees billed for the years ended December 31, 2004, 2003
     and 2002 for  products  and  services  provided  by  KPMG,  other  than the
     services reported above.

                                     Part IV


Item 15. Exhibits, Financial Statements Schedules

(a)       Documents filed as part of this report:
          Financial Statements and Schedules

(b)       Exhibits:

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

                                INDEX TO EXHIBITS

Exhibit
Number                             Description of Exhibit
------                             ----------------------

3.1       Certificate of Incorporation of Caithness Coso Funding Corp.*

3.2       Bylaws of Caithness Coso Funding Corp.*

3.3       Third  Amended and  Restated  Partnership  Agreement  of Coso  Finance
          Partners, dated as of May 28, 1999.*

                                       25

3.4       Third  Amended  and  Restated  Partnership  Agreement  of Coso  Energy
          Developers, dated as of May 28, 1999.*

3.5       Third  Amended  and  Restated  Partnership  Agreement  of  Coso  Power
          Developers, dated as of May 28, 1999.*

3.6       Amendment  Agreement,  dated as of May 28,  1999,  by and  among  Coso
          Finance  Partners,   Caithness  Acquisition  Company,  LLC,  New  CLOC
          Company, LLC, ESCA, LLC and Coso Operating Company LLC.*

3.7       Amendment  Agreement,  dated as of May 28,  1999,  by and  among  Coso
          Energy  Developers,  Caithness  Acquisition  Company,  LLC,  New  CHIP
          Company, LLC, Caithness Coso Holdings,  LLC and Coso Operating Company
          LLC.*

3.8       Amendment Agreement, dated as of May 28, 1999, by and among Coso Power
          Developers,  Caithness Acquisition Company, LLC, New CTC Company, LLC,
          Caithness Navy II Group, LLC and Coso Operating Company LLC.*

4.1       Indenture,  dated as of May 28,  1999,  among  Caithness  Coso Funding
          Corp.,  Coso  Finance  Partners,  Coso Energy  Developers,  Coso Power
          Developers, and U.S. Bank Trust National Association as trustee and as
          collateral agent.*

4.3       Notation  of  Guarantee,  dated as of May 28,  1999,  of Coso  Finance
          Partners.*

4.4       Notation  of  Guarantee,  dated  as of May 28,  1999,  of Coso  Energy
          Developers.*

4.5       Notation  of  Guarantee,  dated  as of May 28,  1999,  of  Coso  Power
          Developers.*

4.6       Registration Rights Agreement,  dated as of May 28, 1999, by and among
          Caithness  Coso  Funding  Corp.,  Coso Finance  Partners,  Coso Energy
          Developers,  Coso Power Developers,  and Donaldson,  Lufkin & Jenrette
          Securities Corporation.*

10.1      Deposit and  Disbursement  Agreement,  dated as of May 28, 1999, among
          Caithness  Coso  Funding  Corp.,  Coso Finance  Partners,  Coso Energy
          Developers,  Coso  Power  Developers,  and U.S.  Bank  Trust  National
          Association, as collateral agent, as trustee, and as depositary.*

10.2      Credit  Agreement,  dated as of May 28, 1999,  between  Caithness Coso
          Funding Corp. and Coso Finance Partners.*

10.3      Promissory  Note  due  2001 of  Coso  Finance  Partners  in  favor  of
          Caithness Coso Funding Corp.*

10.4      Promissory  Note  due  2009 of  Coso  Finance  Partners  in  favor  of
          Caithness Coso Funding Corp.*

10.5      Credit  Agreement,  dated as of May 28, 1999,  between  Caithness Coso
          Funding Corp. and Coso Energy Developers.*

10.6      Promissory  Note  due  2001 of Coso  Energy  Developers  in  favor  of
          Caithness Coso Funding Corp.*

10.7      Promissory  Note  due  2009 of Coso  Energy  Developers  in  favor  of
          Caithness Coso Funding Corp.*

10.8      Credit  Agreement,  dated as of May 28, 1999,  between  Caithness Coso
          Funding Corp. and Coso Power Developers.*

10.9      Promissory  Note  due  2001 of  Coso  Power  Developers  in  favor  of
          Caithness Coso Funding Corp.*

10.10     Promissory  Note  due  2009 of  Coso  Power  Developers  in  favor  of
          Caithness Coso Funding Corp.*

                                       26

10.11     Purchase  Agreement,  dated as of May 21, 1999, by and among Caithness
          Coso Funding  Corp.,  as Issuer,  Coso Finance  Partners,  Coso Energy
          Developers and Coso Power  Developers,  as guarantors,  and Donaldson,
          Lufkin & Jenrette Securities Corporation, as initial purchaser.*

10.12     Security  Agreement,  dated as of May 28, 1999,  executed by and among
          Caithness  Coso Funding  Corp.  in favor of U.S.  Bank Trust  National
          Association, as collateral agent.*

10.13     Security  Agreement,  dated as of May 28, 1999,  executed by and among
          Coso  Finance   Partners  in  Favor  of  U.S.   Bank  Trust   National
          Association, as collateral agent.*

10.14     Security Agreement,  dated as of May 28, 1999, executed by Coso Energy
          Developers  in favor  of U.S.  Bank  Trust  National  Association,  as
          collateral agent.*

10.15     Security  Agreement,  dated as of May 28, 1999, executed by Coso Power
          Developers  in favor  of U.S.  Bank  Trust  National  Association,  as
          collateral agent.*

10.18     Security  Agreement  (Navy I  project  permits),  dated  as of May 28,
          1999,  executed by Coso  Operating  Company LLC in favor of U.S.  Bank
          Trust National Association, as collateral agent.*

10.19     Security  Agreement (BLM project  permits),  dated as of May 28, 1999,
          executed by Coso  Operating  Company  LLC in favor of U.S.  Bank Trust
          National Association, as collateral agent.*

10.20     Security  Agreement  (Navy II  project  permits),  dated as of May 28,
          1999,  executed by Coso  Operating  Company LLC in favor of U.S.  Bank
          Trust National Association, as collateral agent.*

10.24     Deed of  Trust,  Assignment  of Rents,  Fixture  Filing  and  Security
          Agreement, dated as of May 28, 1999, executed by Coso Finance Partners
          in favor of U.S. Bank Trust National  Association,  as trustee, and as
          beneficiary.*

10.25     Deed of  Trust,  Assignment  of Rents,  Fixture  Filing  and  Security
          Agreement,  dated  as  of  May  28,  1999,  executed  by  Coso  Energy
          Developers  in favor  of U.S.  Bank  Trust  National  Association,  as
          trustee, and as beneficiary.*

10.26     Deed of  Trust,  Assignment  of Rents,  Fixture  Filing  and  Security
          Agreement, dated as of May 28, 1999, executed by Coso Power Developers
          in favor of U.S. Bank Trust National  Association,  as trustee, and as
          beneficiary.*

10.27     Deed of  Trust,  Assignment  of Rents,  Fixture  Filing  and  Security
          Agreement,  dated as of May 28,  1999,  executed by Coso  Transmission
          Line Partners in favor of U.S.  Bank Trust  National  Association,  as
          trustee, and as beneficiary.*

10.28     Deed of  Trust,  Assignment  of Rents,  Fixture  Filing  and  Security
          Agreement,  dated as of May 28,  1999,  executed  by China  Lake Joint
          Venture in favor of U.S. Bank Trust National Association,  as trustee,
          and as beneficiary.*

10.29     Deed of  Trust,  Assignment  of Rents,  Fixture  Filing  and  Security
          Agreement,  dated as of May 28, 1999, executed by Coso Land Company in
          favor of U.S.  Bank Trust  National  Association,  as trustee,  and as
          beneficiary.*

10.30     Stock  Pledge  Agreement,  dated as of May 28,  1999,  by Coso Finance
          Partners, Coso Energy Developers and Coso Power Developers in favor of
          U.S. Bank Trust National Association, as Collateral agent.*

10.31     Partnership  Interest  Pledge  Agreement (Navy I), dated as of May 28,
          1999, by ESCA,  LLC and New CLOC  Company,  LLC, in favor of U.S. Bank
          Trust National Association, as collateral agent.*

                                       27

10.32     Partnership  Interest  Pledge  Agreement  (BLM),  dated  as of May 28,
          1999, by Caithness  Coso Holdings,  LLC and New CHIP Company,  LLC, in
          favor of U.S. Bank Trust National Association, as Collateral agent.*

10.33     Partnership  Interest Pledge  Agreement (Navy II), dated as of May 28,
          1999,  by Caithness  Navy II Group,  LLC and New CTC Company,  LLC, in
          favor of U.S. Bank Trust National Association, as collateral agent.*

10.34     Partnership  Interest  Pledge  Agreement  (CTLP),  dated as of May 28,
          1999, by Coso Energy Developers and Coso Power Developers, in favor of
          U.S. Bank Trust National Association, as Collateral agent.*

10.35     Partnership  Interest  Pledge  Agreement  (CLJV),  dated as of May 28,
          1999, by Caithness  Acquisition  Company, LLC and Caithness Geothermal
          1980 Ltd.,  LP, in favor of U.S. Bank Trust National  Association,  as
          collateral agent.*

10.36     Partnership  Interest  Pledge  Agreement  (CLC),  dated  as of May 28,
          1999, by Caithness  Acquisition  Company, LLC and Caithness Geothermal
          1980 Ltd.,  LP, in favor of U.S. Bank Trust National  Association,  as
          collateral agent.*

10.37     Promissory  Notes  Security  Agreement,  dated as of May 28, 1999,  by
          Caithness  Coso Funding  Corp.,  in favor of U.S. Bank Trust  National
          Association, as collateral agent.*

10.38     Original  Service Contract  N62474-79-C-5382,  dated December 6, 1979,
          between U.S. Naval Weapons Center and California Energy Company, Inc.,
          Contractor (the "Navy Contract "), including all Amendments thereto.*

10.39     Escrow  Agreement,  dated December 16, 1992, as amended,  by and among

10.40     Offer to Lease and Lease for Geothermal  Resources,  Serial No. 11402,
          dated April 29, 1985 but Effective May 1, 1985, from the United States
          of  America,  acting  through  the  Bureau  of  Land  Management,   to
          California Energy Company,  Inc.; as assigned by Assignment  Affecting
          Record Title to Geothermal  Resources Lease,  dated June 24, 1985, but
          effective July 1, 1985 from California  Energy  Company,  Inc. to Coso
          Land Company;  as assigned by Assignment of Record Title Interest in a
          Lease for Oil and Gas or Geothermal  Resources,  dated April 20, 1988,
          but  effective  May 1, 1988 from Coso Land Company to Coso  Geothermal
          Company; as assigned by Assignment of Record Title Interest in a Lease
          for Oil and Gas or  Geothermal  Resources  dated  April  20,  1988 but
          effective  May 1, 1988 from Coso  Geothermal  Company  to Coso  Energy
          Developers.*

10.41     Geothermal  Resources Lease,  Serial No. CA-11383,  by and between the
          United  States  of  America,   acting   through  the  Bureau  of  Land
          Management,  and the  LADWP,  effective  as of  January  1,  1988;  as
          assigned by Lease  Assignment  Agreement by and between LADWP and Coso
          Land Company,  dated  September 10, 1997; as assigned by Assignment of
          Record  Title  Interest  in  Lease  for  Oil  and  Gas  or  Geothermal
          Resources, by and between the United States of America, acting through
          the  Bureau  of Land  Management,  and Coso  Land  Company,  effective
          January 1, 1998;  and as  extended  by  Extension  of primary  term of
          CACA-11383 to September 23, 2004.*

10.42     Geothermal  Resources Lease,  Serial No. CA-11384,  by and between the
          United  States  of  America,   acting   through  the  Bureau  of  Land
          Management,  and the LADWP,  effective  as of  February  1,  1982;  as
          assigned by Lease  Assignment  Agreement by and between LADWP and Coso
          Land Company,  dated  September 10, 1997; as assigned by Assignment of
          Record  Title  Interest  in a Lease  for  Oil  and  Gas or  Geothermal
          Resources  (CACA-11384),  by and between the United States of America,
          acting through the Bureau of Land  Management,  and Coso Land Company,
          effective  as of January 1, 1998;  and as  extended  by  extension  of
          primary term of CACA-11385 to December 24, 2002.*

                                       28

10.43     Geothermal  Resources Lease,  Serial No. CA-11385,  by and between the
          United  States  of  America,   acting   through  the  Bureau  of  Land
          Management,  and the LADWP,  effective  as of  February  1,  1982;  as
          assigned by Lease  Assignment  Agreement by and between LADWP and Coso
          Land Company,  dated  September 10, 1997; as assigned by Assignment of
          Record  Title  Interest  in a Lease  for  Oil  and  Gas or  Geothermal
          Resources  (CACA-11385)  by and between the United  States of America,
          acting Through the Bureau of Land  Management,  and Coso Land Company,
          effective  as of January 1, 1998;  and as  extended  by  extension  of
          primary term of CACA-11385 to December 24, 2002.*

10.44     License for Electric Power Plant Site Utilizing  Geothermal  Resources
          between the United States of America,  Licensor, through the Bureau of
          Land Management, and Coso Energy Developers, Licensee, Serial No. CACA
          22512, dated March 8, 1989 (expires 3/8/19).*

10.45     License for Electric Power Plant Site Utilizing  Geothermal  Resources
          between  the United  States of America,  acting  through the Bureau of
          Land  Management,  and Coso Energy  Developers,  Licensee,  Serial No.
          25690, dated 12/29/1989 (expires 12/28/19).*

10.46     Right of Way  CA-18885 by and  between  the United  States of America,
          acting through the Bureau of Land  Management,  and California  Energy
          Company, Inc., dated May 7, 1986 (telephone cable)(expires 5/7/16).*

10.47     Right of Way  CA-13510 by and  between  the United  States of America,
          acting through the Bureau of Land  Management,  and California  Energy
          Company,  Inc.,  dated  April  12,  1984  (Coso  office  site)(expires
          4/12/14).*

10.48     Agreement  of Transfer  and  Assignment  (Navy I  Transmission  Line),
          dated July 14, 1987,  among China Lake Joint  Venture and Coso Finance
          Partners.*

10.49     Agreement  of Transfer and  Assignment  (Navy II  Transmission  Line),
          dated July 31, 1989, among Coso Power Developers and Coso Transmission
          Line Partners.*

10.50     Agreement of Transfer and Assignment (BLM  Transmission  Line),  dated
          July 31, 1989, among Coso Energy Developers and Coso Transmission Line
          Partners.*

10.51     Agreement  Regarding  Overriding  Royalty (CLC Royalty),  dated May 5,
          1988, between Coso Energy Developers and Coso Land Company.*

10.52     Coso  Geothermal  Exchange  Agreement,  dated January 11, 1994, by and
          among  Coso  Finance  Partners,  Coso  Energy  Developers,  Coso Power
          Developers, and California Energy Company, Inc.*

10.53     Amendment  to Coso  Geothermal  Exchange  Agreement,  dated  April 12,
          1995, by and among Coso Finance Partners, Coso Energy Developers, Coso
          Power Developers, and California Energy Company, Inc.*

10.55     Operation and Maintenance  Agreement  (Navy I Project),  dated May 28,
          1999,  by and among  FPL  Energy  Operating  Services,  Inc.  and Coso
          Operating Company, LLC and New CLOC Company, LLC.*

10.56     Operation  and  Maintenance  Agreement  (BLM  Project),  dated May 28,
          1999,  by and among  FPL  Energy  Operating  Services,  Inc.  and Coso
          Operating Company, LLC and New CHIP Company, LLC.*

10.57     Operation and Maintenance  Agreement (Navy II Project),  dated May 28,
          1999,  by and among  FPL  Energy  Operating  Services,  Inc.  and Coso
          Operating Company, LLC and New CTC Company, LLC.*

                                       29

10.58     Field  Operation and  Maintenance  Agreement  (Navy I), dated February
          25, 1999,  between Coso Operating  Company,  LLC and New CLOC Company,
          LLC.*

10.59     Field  Operations and Maintenance  Agreement (Navy II), dated February
          25, 1999,  between Coso  Operating  Company,  LLC and New CTC Company,
          LLC.*

10.60     Field Operations and Maintenance  Agreement (BLM),  dated February 25,
          1999, between Coso Operating Company, LLC and New CHIP Company, LLC.*

10.61     Purchase  Agreement,  dated  as of  January  16,  1999,  by and  among
          Caithness Energy,  L.L.C.,  Caithness  Acquisition  Company,  LLC, and
          California Energy Company, Inc.*

10.62     Agreement Concerning Consideration,  dated as of February 25, 1999, by
          and among Caithness Energy,  L.L.C.,  Caithness  Acquisition  Company,
          L.L.C., New CLOC Company, LLC, New CHIP Company, LLC, New CTC Company,
          LLC, and CalEnergy Company, Inc.*

10.63     Future  Revenue  Agreement,  dated  February 25, 1999,  by and between
          Caithness Energy, L.L.C.,  Caithness Acquisition Company, LLC, New CTC
          Company,  LLC, New CLOC  Company,  LLC,  NewCHIP  Company,  LLC,  Coso
          Finance Partners, Coso Energy Developers,  Coso Power Developers,  and
          California Energy Company, Inc.*

10.64     Acknowledgment  and   Agreement--Release,   dated  January  16,  1999,
          executed  by  Caithness  Resources,   Inc.,   Caithness   Corporation,
          Caithness  Power,   L.L.C.,   James  Bishop  Sr.,  and  Caithness  CEA
          Geothermal, LP (appended to Exhibit 10.61).*

10.65     Acknowledgment and Agreement--Indemnity,  dated May 28, 1999, executed
          by Coso Finance  Partners,  New CLOC  Company,  LLC,  ESCA,  LLC, Coso
          Energy  Developers,  New CHIP Company,  LLC,  Caithness Coso Holdings,
          LLC, Coso Power Developers,  New CTC Company,  LLC, and Caithness Navy
          II Group, LLC.*

10.66     Acknowledgment and  Agreement--Release,  dated May 28, 1999,  executed
          by Coso Finance  Partners,  New CLOC  Company,  LLC,  ESCA,  LLC, Coso
          Energy  Developers,  New CHIP Company,  LLC,  Caithness Coso Holdings,
          LLC, Coso Power Developers,  New CTC Company,  LLC, and Caithness Navy
          II Group, LLC.*

10.67     Acknowledgment  and  Agreement--Indemnity,  dated  January  16,  1999,
          executed  by  Caithness  Resources,   Inc.,   Caithness   Corporation,
          Caithness Power, L.L.C., China Lake Operating Company, Coso Technology
          Corporation  and Coso  Hotsprings  Intermountain  Power  (appended  to
          Exhibit 10.61).*

10.68     Power  Purchase  Agreement  (modified  Standard  Offer No.4) (Navy I),
          dated  as of  June  4,  1984,  as  Amended,  by and  between  Southern
          California  Edison  Company and Coso Finance  Partners (as assignee of
          China Lake Joint Venture).*

10.69     Power Purchase  Agreement  (modified Standard Offer No.4) (BLM), dated
          as of February  1, 1985,  by and between  Southern  California  Edison
          Company and Coso Energy  Developers  (as  assignee of China Lake Joint
          Venture).*

10.70     Power  Purchase  Agreement  (modified  Standard Offer No.4) (Navy II),
          dated as of  February  1, 1985,  by and  between  Southern  California
          Edison  Company and Coso Power  Developers  (as assignee of China Lake
          Joint Venture).*

10.72     Interconnection  and Integration  Facilities  Agreement (BLM project),
          dated December 15, 1988,  Between Southern  California  Edison Company
          and Coso Energy Developers (as assignee of China Lake Joint Venture).*

                                       30

10.73     Interconnection   and  Integration   Facilities   Agreement  (Navy  II
          project),  dated December 15, 1988, Between Southern California Edison
          Company  and Coso Power  Developers  (as  assignee of China Lake Joint
          Venture).*

10.77     Operating Fee  Subordination  Agreement  (Navy I), dated as of May 28,
          1999, by and among Coso  Operating  Company,  LLC, and U.S. Bank Trust
          National Association, as collateral agent.*

10.78     Operating  Fee  Subordination  Agreement  (BLM),  dated  as of May 28,
          1999, by and among Coso  Operating  Company,  LLC, and U.S. Bank Trust
          National Association, as collateral agent.*

10.79     Operating Fee  Subordination  Agreement (Navy II), dated as of May 28,
          1999, by and among Coso  Operating  Company,  LLC, and U.S. Bank Trust
          National Association, as collateral agent.*

10.80     Management Fee  Subordination  Agreement (Navy I), dated as of May 28,
          1999,  by and among ESCA,  LLC, New CLOC  Company,  LLC,  Coso Finance
          Partners,  and U.S.  Bank Trust  National  Association,  as collateral
          agent.*

10.81     Management  Fee  Subordination  Agreement  (BLM),  dated as of May 28,
          1999, by and among  Caithness  Coso  Holdings,  LLC, New CHIP Company,
          LLC, Coso Energy Developers, and U.S. Bank Trust National Association,
          as collateral agent.*

10.82     Management Fee Subordination  Agreement (Navy II), dated as of May 28,
          1999, by and among Caithness Navy II Group, LLC, New CTC Company, LLC,
          Coso Power Developers,  and U.S. Bank Trust National  Association,  as
          collateral agent.*

10.83     Cotenancy  Agreement,  dated as of May 28,  1999,  by and  among  Coso
          Finance Partners, Coso Energy Developers, and Coso Power Developers.*

10.84     Acquisition  Agreement,  dated as of May 28,  1999,  among  Coso  Land
          Company,  Coso Finance Partners,  Coso Energy  Developers,  Coso Power
          Developers, and Coso Operating Company, LLC.*

10.85     Assignment and Assumption Agreement,  dated as of May 28, 1999, by and
          among MidAmerican Energy Holdings Company as  successor-in-interest to
          Cal  Energy  Company,   Inc.,  Coso  Energy  Developers,   Coso  Power
          Developers and Coso Finance Partners.*

21.1      Subsidiaries of Caithness Coso Funding Corp.,  Coso Finance  Partners,
          Coso Energy Developers, and Coso Power Developers.*

23.3      Consent of Sandwell Engineering Inc.*

23.4      Consent of Henwood Energy Services, Inc.*

23.5      Consent of GeothermEx, Inc.*

23.6      Consent  of  Riordan  &  McKinzie,   A  Professional  Law  Corporation
          (included in Exhibit 5.1).*

23.7      Consent of Reed Smith Shaw & McClay LLP (included in Exhibit 5.2).*

24.1      Powers of Attorney (included on pages II-9, II-11, II-13 and II-15).*

25.1      Form T-1 Statement of Eligibility and Qualification of U.S. Bank Trust
          National Association as Trustee.*

99.1      Certification of Chief Executive Officer.

99.2      Certification of Chief Financial Officer.

                                       31

99.3      Sale Agreement by and between Caithness  Acquisition Company, LLC, and
          ESI Geothermal, Inc. dated as of October 6, 1999.**

99.4      Assignment,  Assumption and Novation Agreement (Coso Finance Partners)
          by and between FPL Energy Operating Services,  Inc. and Coso Operating
          Company, LLC dated October 18, 1999.**

99.5      Assignment, Assumption and Novation Agreement (Coso Energy Developers)
          by and between FPL Energy Operating Services,  Inc. and Coso Operating
          Company, LLC dated October 18, 1999.**

99.6      Assignment,  Assumption and Novation Agreement (Coso Power Developers)
          by and between FPL Energy Operating Services,  Inc. and Coso Operating
          Company, LLC dated October 18, 1999.**

100.1     Contract N68711-05-C-0001 Geothermal Resource  Development,  Naval Air
          Weapons Station at the Coso Project China Lake, California***

 *        Incorporated  herein by reference from the  Registration  Statement on
          Form S-4,  Registration  No.  333-83815  filed with the Securities and
          Exchange  Commission  (the SEC) by Coso  Funding  Corp.  on October 7,
          1999, as amended.

 **       Incorporated  herein by  reference  from the Form 8-K on report  dated
          October 18, 1999 for Coso Funding Corp., filed with the SEC.

***       Incorporated  herein  by reference  from the Form 8-K on report  dated
          November 1, 2004 for Coso Funding Corp., filed with the SEC.

                                       32
<PAGE>

                                  Exhibit 99.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In  connection  with the Annual  Report of Caithness  Coso Funding  Corp.,  Coso
Finance  Partners  and  Subsidiary,  Coso  Energy  Developers,  and  Coso  Power
Developers and Subsidiary  (collectively,  the  Registrant) on Form 10-K for the
year  ended  December  31,  2004 as  filed  with  the  Securities  and  Exchange
Commission  on the date hereof (the  Report),  I, James D.  Bishop,  Sr.,  Chief
Executive  Officer of the Registrant,  certify,  to the best of my knowledge and
belief,  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully  complies  with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and result of  operations of the
Registrant.


Date:  March 29, 2005                    Caithness Coso Funding Corp.
                                         a Delaware Corporation

                                         By: /S/ JAMES D. BISHOP, SR.
                                             ------------------------
                                                 James D. Bishop, Sr.
                                                 Director, Chairman &
                                                 Chief Executive Officer
<PAGE>


                                  Exhibit 99.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In  connection  with the Annual  Report of Caithness  Coso Funding  Corp.,  Coso
Finance  Partners  and  Subsidiary,  Coso  Energy  Developers,  and  Coso  Power
Developers and Subsidiary  (collectively,  the  Registrant) on Form 10-K for the
year  ended  December  31,  2004 as  filed  with  the  Securities  and  Exchange
Commission on the date hereof (the Report),  I, Christopher T. McCallion,  Chief
Financial  Officer of the Registrant,  certify,  to the best of my knowledge and
belief,  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects, the financial condition and result of operations of
          the Registrant.


Date:  March 29, 2005                         Caithness Coso Funding Corp.
                                              a Delaware Corporation

                                              By: /S/ CHRISTOPHER T. MCCALLION
                                                  ----------------------------
                                                      Christopher T. McCallion
                                                      Executive Vice President
                                                      & Chief Financial Officer
                                                      Principal Financial &
                                                      Accounting Officer
<PAGE>


          CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION
                    302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, James D. Bishop, Sr., certify that:

1.   I have reviewed  this annual report on Form 10-K of Caithness  Coso Funding
     Corp., Coso Finance Partners and Subsidiary,  Coso Energy  Developers,  and
     Coso Power Developers and Subsidiary (collectively, the Registrant);

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the Registrant as of, and for, the periods presented in this annual report;

4.   The  Registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  Registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

5.   The Registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  Registrant's  auditors  and the audit
     committee of  Registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  Registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  Registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          controls; and

6.   The  Registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date:  March 29, 2005                 Caithness Coso Funding Corp.
                                      a Delaware Corporation

                                      By: /S/ JAMES D. BISHOP, SR.
                                          ------------------------
                                              James D. Bishop, Sr.
                                              Director, Chairman &
                                              Chief Executive Officer
<PAGE>

          CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION
                    302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher T. McCallion, certify that:

1.   I have reviewed  this annual report on Form 10-K of Caithness  Coso Funding
     Corp., Coso Finance Partners and Subsidiary,  Coso Energy  Developers,  and
     Coso Power Developers and Subsidiary (collectively, the Registrant);

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the Registrant as of, and for, the periods presented in this annual report;

4.   The  Registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  Registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

5.   The Registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  Registrant's  auditors  and the audit
     committee of  Registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  Registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  Registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          controls; and

6.   The  Registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date:  March 29, 2005                  Caithness Coso Funding Corp.
                                       a Delaware Corporation

                                       By: /S/ CHRISTOPHER T. MCCALLION
                                           ----------------------------
                                               Christopher T. McCallion
                                               Executive Vice President
                                               & Chief Financial Officer
                                               Principal Financial &
                                               Accounting Officer
<PAGE>

                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                              CAITHNESS COSO FUNDING CORP.,
                              a Delaware corporation

                              By:  /S/ CHRISTOPHER T. MCCALLION
                                   ----------------------------
                                       Christopher T. McCallion
                                       Executive Vice President &
                                       Chief Financial Officer
                                       (Principal Financial and
                                       Accounting Officer)

                                       Date: March 29, 2005


                                       COSO FINANCE PARTNERS
                                       a California general partnership

                                       By: New CLOC Company, LLC,
                                             its Managing General Partner

                                       By: /S/ CHRISTOPHER T. MCCALLION
                                           ----------------------------
                                               Christopher T. McCallion
                                               Executive Vice President &
                                               Chief Financial Officer
                                               (Principal Financial and
                                               Accounting Officer)

                                               Date: March 29, 2005


                                       COSO ENERGY DEVELOPERS
                                       a California general partnership

                                       By: New CHIP Company, LLC,
                                             its Managing General Partner

                                       By: /S/ CHRISTOPHER T. MCCALLION
                                           ----------------------------
                                               Christopher T. McCallion
                                               Executive Vice President &
                                               Chief Financial Officer
                                               (Principal Financial and
                                               Accounting Officer)

                                               Date:  March 29, 2005


                                       COSO POWER DEVELOPERS
                                       a California general partnership

                                       By: New CTC Company, LLC,
                                             its Managing General Partner

                                       By: /S/ CHRISTOPHER T. MCCALLION
                                           ----------------------------
                                               Christopher T. McCallion
                                               Executive Vice President &
                                               Chief Financial Officer
                                               (Principal Financial and
                                               Accounting Officer)

                                               Date:  March 29, 2005
<PAGE>


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.



                           By:  /S/ JAMES D. BISHOP, SR.
                                ------------------------
                                    James D. Bishop, Sr.
                                    Director, Chairman and Chief
                                    Executive Officer
                                    (Principal Executive Officer

                                    Date: March 29, 2005

                           By:  /S/ CHRISTOPHER T. MCCALLION
                                ----------------------------
                                    Christopher T. McCallion
                                    Director, Executive Vice President
                                    & Chief Financial Officer
                                    (Principal Accounting Officer)

                                    Date: March 29, 2005

                           By:  /S/ LESLIE J. GELBER
                                --------------------
                                    Leslie J. Gelber
                                    Director, President and
                                    Chief Operating Officer

                                    Date:  March 29, 2005

                           By:  /S/ JAMES D. BISHOP, JR.
                                ------------------------
                                    James D. Bishop, Jr.
                                    Director, Vice Chairman

                                    Date:  March 29, 2005

                           By:  /S/ MARK A. FERRUCCI
                                --------------------
                                    Mark A. Ferrucci
                                    Director

                                    Date: March 29, 2005