FORM 10-K

(Mark One)
[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                         EXCHANGE ACT OF 1934
For the Fiscal year ended December 31, 2003.
                          -----------------

                                       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 characters)      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  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.  Yes [ x ] No [ ]

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

The Registrant's Common Stock is not traded in a public market.

         Aggregate market value of the voting stock 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, 2003 AND 2002

                                   Part I                                   Page
                                   ------                                   ----

Item 1.         Business                                                       1

Item 2.         Properties                                                     6

Item 3.         Legal Proceedings                                              7

Item 4.         Submission of Matters to a Vote of Security Holders            7


                                     Part II

Item 5.         Market for the Registrant's Common Equity and
                   Related Stockholder Matters (Not applicable)                7

Item 6.         Selected Financial Data                                        7

Item 7.         Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                        11

Item 7A.        Quantitative and Qualitative Disclosures About
                   Market Risk                                                17

Item 8.         Financial Statements and Supplementary Data                   18

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


                                    Part III

Item 10.        Directors and Executive Officers of the Registrant            18

Item 11.        Executive Compensation                                        20

Item 12.        Security Ownership of Certain Beneficial Owners and
                   Management (Not applicable)                                20

Item 13.        Certain Relationships and Related Transactions                22


                                     Part IV

Item 14.        Exhibits, Financial Statement Schedules and Reports
                   on Form 8-K                                                25

<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 Coso  partnerships  sell 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.  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.  Future energy payments required to be paid by Edison
to the Coso  partnerships  will  most  likely  be less  than  historical  energy
payments  because  they will be paid based on Edison's  avoided  cost of energy,
instead of the fixed payments paid during the first ten years.  The fixed energy
price period  expired in August 1997 for the Navy I  partnership,  in March 1999
for the BLM  partnership,  and in January 2000 for the Navy II 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.

                                       1

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 of 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 sponsor 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 23
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 six geothermal  plants,  including the Coso
projects, totaling 325 MW of generating capacity. Caithness Energy has interests
in other  operating  power  generating  facilities,  including  solar,  wind and
natural gas, totaling an additional 806 MW of generating capacity.

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


The Issuer

     Caithness  Coso  Funding  Corp.   (Funding  Corp.)  is  a  special  purpose
corporation  and a wholly  owned  subsidiary  of 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.

                                       2

     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  2003,  the Navy I  partnership  and the  Navy II  partnership  incurred
aggregate  royalties  to the U.S Navy of  approximately  $2.1  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  $1.0 million.  The BLM partnership
reimbursed the Navy II partnership  approximately  $0.2 million of the royalties
incurred by the Navy II partnership. The BLM partnership incurs a royalty to the
U.S.  Navy  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

     The Navy I partnership  pays a royalty for its first  generating unit (Unit
1) through reimbursement of electricity supplied to the U.S. Navy by Edison from
electricity  generated  at the Navy I  plant.  The  reimbursement  is based on a
pricing  formula  that is included in the U.S.  Navy  Contract.  This formula is
primarily  based on the tariff  rates  charged  by  Edison,  as agreed to by the
California  Public  Utilities  Commission  (CPUC),  and are  subject  to  future
revision.  On July 10, 2003,  the CPUC approved a settlement  between Edison and
other  parties to lower retail  electric  rates  effective as of August 1, 2003.
These  rates  are in  effect  for  one  year,  after  which  new  rates  will be
established  in  accordance  with  CPUC  guidelines.  Indices  utilized  in  the
calculation  of the  royalties  under  the Navy I  partnership  Unit 1  contract
remained unchanged  historically based on an agreement between the U.S. Navy and
the Navy I partnership.  In November 2001 and October 2002, modifications to the
calculation  of the  reimbursement  pricing  formula were made to the U.S.  Navy
Contract  resulting in a reduction of accrued royalties of $6.5 million and $1.3
million for those periods,  respectively,  which was agreed to by the U.S. Navy.
The parties have agreed to a replacement index and true-up  calculation in favor
of the Navy I partnership.
                                       3

     In addition,  with respect to Unit 1 at Navy I, the Navy I  partnership  is
obligated to pay the U.S.  Navy the sum of $25.0  million on or before  December
31, 2009, the expiration date of the term of the U.S. Navy Contract.  Payment of
this obligation will be made from an established  sinking fund to which the Navy
I partnership has been making payments since 1987.

     For  the  second  and  third   generating   units  (Unit  2  and  Unit  3),
respectively,  at Navy I, the Navy I  partnership's  royalty  expense is a fixed
percentage of its  electricity  sales to Edison.  The royalty  expense is 15% of
revenues  received by the Navy I  partnership  through 2003 and will increase to
20% of revenues received from 2004 through 2009, the expiration date of the U.S.
Navy Contract.


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.


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.


Navy II

     The Navy II  partnership  pays royalties to the U.S Navy under the U.S Navy
Contract. The Navy II partnership's royalty expense is a fixed percentage of its
electricity sales to Edison.  The royalty rate was 10.0% of electricity sales to
Edison through 1999,  increased to 18.0% for 2000 through 2004 and will increase
to 20.0% from 2005 through the end of the Navy Contract.


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 the Operation and Maintenance agreements. 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, 2003, COC employed 88 people to operate and maintain the Coso
projects.

                                       4

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, 2003 to February 24, 2004 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  60-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.


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.


Financial Information
   (in thousands)
<TABLE>
<CAPTION>
                                                                Years Ended December 31,
                                                                ------------------------
<S>                                             <C>               <C>               <C>
Navy I Partnership                                     2003              2002              2001
                                                       ----              ----              ----

Total Operating Revenue(e)(f)                    $   59,792        $   92,065        $   53,400
Operating Income                                     26,117            58,689            24,218
Total Assets                                        184,800           195,072           193,114

                                       5

                                                                Years Ended December 31,
                                                                ------------------------

BLM Partnership                                         2003             2002              2001
                                                        ----             ----              ----

Total Operating Revenue(e)(f)                     $   46,869       $   81,252        $   44,041
Operating Income                                      22,049           52,726            12,645
Total Assets                                         170,556          174,871           183,978


                                                                Years Ended December 31,
                                                                ------------------------

Navy II Partnership                                     2003             2002              2001
                                                        ----             ----              ----

Total Operating Revenue(e)(f)                     $   46,149       $   79,592        $   36,389
Operating Income                                      18,739           50,164             1,981
Total Assets                                         162,001          168,834           170,058
</TABLE>


                     See Footnotes to Selected Financial and Operating Data


Item 2.  Properties


Plants

Navy I

     Navy I and its steam  resource  are  located  on the  United  States  Naval
Weapons  Center at China Lake.  In December  2000,  Navy I acquired an undivided
one-third  interest in leases previously  purchased from LADWP located on Bureau
of Land Management property.  It commenced operations in 1987.  Geothermal steam
for Navy I is produced using 45 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 100.3% in 2003, 104.7% in 2002 and 108.3% in 2001, 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. 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.  It  commenced  operations  in 1989.  BLM is  comprised of
turbine  generators located at two different power blocks: the BLM East site and
the BLM 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 42 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
89.8% in 2003,  93.9% in 2002 and 102.8% in 2001,  based on a stated capacity of
80 MW.
                                       6

Navy II

     Navy II and its steam  resource  are  located  on the United  States  Naval
Weapons  Center at China Lake. 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.  It  commenced  operations  in  1989.
Geothermal steam for Navy II is produced using 35 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
103.4% in 2003, 100.4% in 2002 and 104.9% in 2001, 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 and Related Stockholder Matters.

      Not applicable.


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.

                                       7
<TABLE>
<CAPTION>
                                                       Navy I Partnership
                                                        (Stand-alone)(a)
                                                (In thousands, except ratio data)


                                                                                        Year Ended December 31,
                                                                                        -----------------------
<S>                                                               <C>           <C>           <C>           <C>          <C>
                                                                     2003          2002          2001          2000          1999
                                                                     ----          ----          ----          ----          ----
Statement of Operations Data:
     Operating revenues(a)(e)(f)(g)........................       $  59,792     $  92,065     $  53,400     $  52,419     $  55,666
     Operating expenses....................................         (33,675)      (33,376)      (29,182)      (29,124)      (32,129)
                                                                    --------      --------      --------      --------      --------
     Operating income......................................          26,117        58,689        24,218        23,295        23,537

Non-Operating income (expense):
     Interest expense......................................          (9,738)      (10,836)      (11,732)      (12,493)      (11,573)
     Other expenses........................................          (2,299)         (315)         (705)         (520)       (4,377)
     Interest and other income, net........................           1,624         1,574         2,928         2,506         2,234
                                                                     -------      --------       -------       -------       -------

     Net income............................................       $  15,704     $  49,112     $  14,709     $  12,788      $  9,821
                                                                     =======       ======        ======        ======        =======

Operating Data:
     Operating capacity factor (b)(c)......................          100.3%        104.7%        108.3%        111.8%         95.4%
     kWh produced..........................................         702,850       733,877       758,890       785,624       668,388


                                      See Footnotes to Selected Financial and Operating Data




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



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

                                                                     2003          2002          2001          2000          1999
                                                                     ----          ----          ----          ----          ----
Statement of Operations Data:
    Operating revenues (a)(e)(f)(g)........................       $  46,869     $  81,252     $  44,041     $  42,174     $  49,877
    Operating expenses.....................................         (24,820)      (28,526)      (31,396)      (31,414)      (38,534)
                                                                    --------      --------      --------      --------      --------
    Operating income.......................................          22,049        52,726        12,645        10,760        11,343

Non-Operating income (expense):
       Interest expense ...................................          (8,018)       (8,567)       (8,958)       (9,174)       (8,725)
       Other expenses......................................          (1,291)         (255)         (440)         (318)       (3,332)
       Interest and other income, net......................           1,141         1,455         3,766         8,125         1,066
                                                                     -------       -------       -------       -------       -------
       Net income..........................................       $  13,881     $  45,359      $  7,013      $  9,393     $     352
                                                                     =======       =======       =======       =======       =======

Operating Data:
    Operating capacity factor (b)(c).......................           89.8%         93.9%        102.8%        109.4%        105.0%
    kWh produced...........................................         629,470       657,813       720,130       769,098       735,840



                                      See Footnotes to Selected Financial and Operating Data

                                                               8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                      Navy II Partnership
                                                         (Stand-alone)
                                                (In thousands, except ratio data)


                                                                                        Year Ended December 31,
                                                                                        -----------------------
<S>                                                              <C>            <C>          <C>           <C>           <C>
                                                                     2003          2002          2001          2000          1999
                                                                     ----          ----          ----          ----          ----
Statement of Operations Data:
    Operating revenues (a) (e) (f) (g).....................       $  46,149     $  79,592     $  36,389     $  43,054     $ 113,746
    Operating expenses.....................................         (27,410)      (29,428)      (34,408)      (34,583)      (43,577)
                                                                    --------      --------      --------      --------      --------
    Operating income.......................................          18,739        50,164         1,981         8,471        70,169


Non-Operating income (expense):
       Interest expense....................................          (7,070)      (7,538)        (8,128)       (9,130)      (11,947)
       Other expenses......................................          (2,207)        (217)        (1,119)         (769)       (4,191)
       Interest and other income, net......................             426          894          2,883         2,868         2,174
                                                                     -------      -------        -------       -------      --------

       Net income (loss)...................................       $   9,888     $  43,303     $  (4,383)     $  1,440     $  56,205
                                                                     =======      =======        =======       =======      ========

Operating Data:
    Operating capacity factor (b)(c).......................          103.4%        100.4%        104.9%        111.1%        112.0%
    kWh produced...........................................         724,600       703,920       735,210       780,709       785,772


                                      See Footnotes to Selected Financial and Operating Data

                                                                9
</TABLE>
<TABLE>
<CAPTION>
                                                                                           As of December 31,
                                                                                           ------------------
<S>                                                              <C>            <C>           <C>         <C>           <C>
                                                                      2003           2002         2001         2000           1999
                                                                      ----           ----         ----         ----           ----
Balance Sheet Data (in thousands):
----------------------------------

Navy I Partnership (stand-alone)
   Cash and cash equivalents..............................       $   1,429      $   4,215     $    264    $   3,506      $   7,821
   Restricted cash and advances...........................          24,657         28,692       21,325       22,996         25,001
   Property, plant and equipment, net.....................         134,778        136,313      140,437      149,076        153,879
   Power purchase contract, net...........................           8,798          9,945       11,093       12,240         13,388
   Total assets...........................................         184,800        195,072      193,114      198,409        218,192
   Project loan (d).......................................          97,547        110,955      122,550      134,984        151,550
   Partners' capital......................................          66,676         65,408       52,425       46,871         49,362

BLM Partnership (stand-alone)
   Cash and cash equivalents..............................       $    603       $   1,423     $     --    $   5,862      $   6,423
   Restricted cash, investments and advances..............         10,155           6,646        7,368       14,502          9,806
   Property, plant and equipment, net.....................        130,519         135,853      148,417      153,618        165,650
   Power purchase contract, net...........................         16,293          17,365       18,437       19,510         20,549
   Total assets...........................................        170,556         174,871      183,978      201,312        216,391
   Project loan (d).......................................         84,821          89,875       96,250      100,907        107,900
   Partners' capital......................................         54,817          56,603       52,762       69,245         79,350


Navy II Partnership (stand-alone)
   Cash and cash equivalents..............................       $     78        $     824    $     --    $   7,741      $   6,020
   Restricted cash, investments and advances..............          8,281           10,855       5,517       10,214         54,338
   Property, plant and equipment, net.....................        114,839          116,192     124,665      136,947        147,522
   Power purchase contract, net...........................         17,232           20,026      22,820       25,614         28,409
   Total assets...........................................        162,001          168,834     170,058      195,693        273,269
   Project loan (d).......................................         71,246           80,401      84,200       94,176        153,550
   Partners' capital......................................         85,084           85,361      62,220       87,423        104,331




                                       See Footnotes to Selected Financial and Operating Data

                                                                 10
</TABLE>

               Footnotes to Selected Financial and Operating Data

(a)  The fixed energy price periods expired for the Navy I partnership in August
     1997, for the BLM partnership in March 1999 and for the Navy II partnership
     in January 2000.

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

(c)  The variance in the operating  capacity factors for the Navy I partnership,
     the BLM partnership, and the Navy II partnership are due to the transfer of
     steam from the Navy I partnership to the BLM and Navy II partnerships under
     the steam sharing program.

(d)  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.

(e)  Reflects  non-recognition  of operating revenues for the period November 1,
     2000 through  March 26, 2001,  based on  non-collection  of amounts due for
     power generated and sold to Edison.

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

(g)  Reflects recognition of operating revenue in 2003 resulting from collection
     of  amounts  due for  power  generated  and sold to Edison  for the  period
     November 1, 2000 through March 26, 2001.


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 ("the Navy
I partnership"),  Coso Energy Developers ("the BLM partnership"), and Coso Power
Developers ("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.

                                       11

     The following  data includes the operating  capacity  factor,  capacity and
electricity  production  (in kWh) for each  Coso  partnership  on a  stand-alone
basis:
<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                                               -----------------------
     <S>                                                <C>             <C>            <C>
                                                        2003            2002            2001
     Navy I Partnership (stand alone)                   ----            ----            ----
     Operating capacity factor                         100.3%          104.7%          108.3%
     Capacity (MW) (average)                            80.23           83.78           86.63
     kWh produced (000s)                              702,850         733,877         758,890

     BLM Partnership (stand alone)
     Operating capacity factor                          89.8%           93.9%          102.8%
     Capacity (MW) (average)                            71.86           75.09           82.21
     kWh produced (000s)                              629,470         657,813         720,130

     Navy II Partnership (stand alone)
     Operating capacity factor                         103.4%          100.4%          104.9%
     Capacity (MW) (average)                            82.72           80.36           83.93
     kWh produced (000s)                              724,600         703,920         735,210
</TABLE>

     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  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 a turbine  enhancement  program 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 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.

     Total energy  production  for the Coso  partnerships,  decreased in 2002 as
compared to 2001, due to the decline in steam which  management is attempting to
remediate  through  the  well  maintenance  and  capital  improvements  programs
discussed above.


Results of Operations for the years ended December 31, 2003, 2002, and 2001.
----------------------------------------------------------------------------

     The following  discusses the results of operations of the Coso partnerships
for the years ended December 31, 2003,  2002 and 2001 (dollar  amounts in tables
are in thousands, except per kWh data):


Revenue
<TABLE>
<CAPTION>
                                                2003                        2002                        2001
                                                ----                        ----                        ----
                                            $        cents/kWh          $        cents/kWh          $        cents/kWh
                                            -        ---------          -        ---------          -        ---------
<S>                                       <C>           <C>           <C>           <C>             <C>     <C>
Total Operating Revenues
including steam transfers
Navy I partnership                        59,792         8.5          92,065        12.5          53,400        7.0
BLM partnership                           46,869         7.4          81,252        12.4          44,041        6.1
Navy II partnership                       46,149         6.4          79,592        11.3          36,389        5.0
</TABLE>

                                                               12

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

     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. 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.

     Total  operating  revenues for the Coso  partnerships  increased in 2002 as
compared to 2001 due to the recognition of revenue  generated but not recognized
for the period  November 1, 2000  through  March 26,  2001,  resulting  from the
Edison's  liquidity  crisis,  partially  offset by decreases  in steam  transfer
revenues and the previously discussed decline in steam.


Plant Operating Expense
<TABLE>
<CAPTION>
                                                2003                        2002                        2001
                                                ----                        ----                        ----
                                            $        cents/kWh          $        cents/kWh          $        cents/kWh
                                            -        ---------          -        ---------          -        ---------
<S>                                       <C>           <C>           <C>           <C>            <C>       <C>
Navy I partnership                         9,951        1.4            9,832        1.3            9,010        1.2
BLM partnership                           12,722        2.0           11,748        1.8           10,221        1.4
Navy II partnership                        9,777        1.3           10,304        1.5            9,679        1.3
</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; insurance expense for each 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 $670,000,  $720,000
and  $610,000,  respectively,  in 2003 as  compared  to  2002.  The  significant
decrease in property  taxes in 2002 resulted from a correction by Inyo county to
the 2001 assessment received and paid in 2002.

     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.

     Plant  operating  expenses for the Coso  partnerships  increased in 2002 as
compared to 2001, due to increases in insurance costs, property taxes and repair
and  maintenance  projects,  partially  offset  by a  reduction  in legal  costs
associated  with Edison's  non-payment.  The increase in property taxes resulted
from the correction to the 2001  assessment  received and paid in 2002 discussed
above.  The  increase  in repair  and  maintenance  projects  resulted  from the
deferral in 2001 due to Edison's non-payment.

                                       13

Royalty Expenses
<TABLE>
<CAPTION>
                                                2003                        2002                        2001
                                                ----                        ----                        ----
                                            $        cents/kWh          $        cents/kWh          $        cents/kWh
                                            -        ---------          -        ---------          -        ---------
<S>                                      <C>            <C>           <C>           <C>             <C>      <C>
Navy I partnership                       13,081         1.9           12,914        1.8            9,950        1.3
BLM partnership                           2,778         0.4            2,436        0.4            5,203        0.7
Navy II partnership                       7,520         1.0            6,961        1.0            9,377        1.3
</TABLE>

     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.

     Royalty  expenses for the Navy I partnership  increased in 2002 as compared
to 2001  primarily  due to a $6.5  million  royalty  reimbursement  in 2001 that
resulted  from  the  modification  to  the  calculation  of the  Unit 1  royalty
reimbursement  pricing  formula.  The increase was  partially  offset by reduced
royalties  resulting  from the decrease in the rate of energy from 7.5 cents per
kWh  in  2001  to 4.7  cents  per  kWh  in  2002,  and a  $1.3  million  royalty
reimbursement  in 2002 resulting from the final  modification to the calculation
of the Unit I royalty reimbursement pricing formula.

     Royalty  expenses for the BLM partnership  decreased in 2002 as compared to
2001  primarily due to the decrease in the rate of energy from 7.5 cents per kWh
in 2001 to 4.7 cents per kWh in 2002 and a  decrease  in  production  in 2002 as
compared to 2001.

     Royalty expenses for the Navy II partnership  decreased in 2002 as compared
to 2001  primarily  due to the decrease in the rate of energy from 7.5 cents per
kWh in 2001 to 4.7 cents per kWh in 2002.


Depreciation and Amortization

     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.

     Depreciation and amortization for the Coso  partnerships  decreased in 2002
as compared to 2001 due to older wells being fully depreciated  during 2002. The
decrease for the Navy I  partnership  was offset by the increase in  capitalized
assets associated with the new well placed in service in 2002.


Interest and Other Income

     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 a one-time credit of $0.5 million from the
California  Department of Water Resources resulting from a refund related to the
energy crisis of 2001.

     Interest  and other income for the Coso  partnerships  decreased in 2002 as
compared to 2001 due to interest on amounts in arrears,  owed by Edison in 2001,
that were settled and paid by Edison on March 1, 2002.

                                       14

Interest Expense

     Interest expense for the Coso partnerships decreased in 2003 as compared to
2002 and 2002 as compared to 2001 due to the reduction in the  principle  amount
of the project loan from Funding Corp.


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.
As of December 2001, the 6.8% notes were repaid,  subsequently  leaving the Coso
partnerships with more cash flow annually. 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 debt.

     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
Funding Corp. Senior Secured (Notes). The Coso partnerships expect to be able to
meet these obligations from operating cash flow.  Historically,  any excess cash
after debt  service  have  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,
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 has accepted  the Ninth  Circuit  Court of Appeals  request to address the
issues referred to it in the September 23, 2002 ruling.  The California  Supreme
Court  found  that  the   stipulated   judgment  did  not  violate  state  laws.
Consequently,  the Agreement  remains in full force and effect and it is unknown
if any additional appeals are planned. Immediately after this settlement, Edison
and each of the Coso partnerships  entered into an amendment of their respective
Agreement (referenced above) pertaining to partial payment and interest payments
relating to Edison's past due  obligations  for the period from November 1, 2000
through  March 26,  2001.  The  Agreement,  as amended,  was approved by 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.

     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. 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.

                                       15

     Net cash from operating  activities for the Coso partnerships  decreased in
2003 as compared to 2002 and increased in 2002 as compared to 2001 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.

     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  flow  from  investing
activities for the Coso  partnerships  increased in 2002 as compared to 2001 due
to the decrease in restricted cash  requirements  associated with the notes. The
increase  for  the  BLM   partnership  was  offset  by  a  decrease  in  capital
expenditures for 2002.

     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.  Net  cash  flow  from  financing  activities  for the  Navy I and BLM
partnerships decreased in 2002 as compared to 2001 due to an increase in partner
distributions  in 2002.  The  Navy II  partnerships  cash  flow  from  financing
activities  decreased in 2002 as compared to 2001 due to lower repayments of the
notes.

     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.....................        $ 253,614      $  31,332      $  73,766      $  47,419        $ 101,097
Other long-term obligations.......            9,324          1,332          2,664          2,664            2,664
                                            -------         ------         ------         ------          -------
                                          $ 262,938      $  32,664      $  76,430      $  50,083        $ 103,761
</TABLE>

     The project  loans were issued under an indenture  dated as of 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 $25.0  million on or
before  December  31, 2009,  the  expiration  date of the term of the U.S.  Navy
contract.  Payment of this obligation  will be made from an established  sinking
fund which the Navy I partnership  has been making  payments to since 1987.  The
payment is secured by funds placed on deposit monthly,  which funds plus accrued
interest will  aggregate  $25.0  million.  Currently,  the monthly  amount to be
deposited is approximately $111,000 (see Item 8).


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.

                                       16

     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.

     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.


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:

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

     *    In light of the  uncertainty of the Western energy  markets,  Edison's
          financial  viability  may be considered  uncertain.  If Edison were to
          enter into bankruptcy proceedings,  the power purchase contracts could
          be amended and any accounts receivable from Edison could be reduced or
          eliminated;

     *    The Coso geothermal resource could be interrupted or unavailable;

     *    Operating and royalty costs could increase;

     *    Changes  in  the  regulatory   structure   which  govern  the  current
          operations of the Coso partnerships.

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

     *    Energy prices paid by Edison could decrease or terminate;

     *    Delivery of electrical energy to Edison could be disrupted;

                                       17

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

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

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

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

     *    Third parties could fail to perform their  contractual  obligations to
          the Coso partnerships; and

     *    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 8.  Financial Statements and Supplementary Data.


                        CAITHNESS COSO FUNDING CORP. AND
                          COSO OPERATING PARTNERSHIPS

                                           Index                           Page
                                           -----                           ----

Caithness Coso Funding Corp:
----------------------------
KPMG LLP Independent Auditors' Report                                      F-1
Balance Sheets as of December 31, 2003 and 2002                            F-2
Statement of Income for the years ended
   December 31, 2003, 2002 and 2001                                        F-3
Statement of Cash Flows for the years
   ended December 31, 2003, 2002 and 2001                                  F-4
Notes to Financial Statements                                              F-5

Coso Finance Partners:
----------------------
KPMG LLP Independent Auditors' Report                                      F-6
Balance Sheets as of December 31, 2003 and 2002                            F-7
Statement of Operations for the years ended
   December 31, 2003, 2002 and 2001                                        F-8
Statement of Partners' Capital for the years ended
   December 31, 2003, 2002 and 2001                                        F-9
Statement of Cash Flows for the years
   ended December 31, 2003, 2002 and 2001                                  F-10
Notes to Financial Statements                                              F-11

Coso Energy Developers:
-----------------------
KPMG LLP Independent Auditors' Report                                      F-12
Balance Sheets as of December 31, 2003 and 2002                            F-13
Statement of Operations for the years ended
   December 31, 2003, 2002 and 2001                                        F-14
Statement of Partners' Capital for the years ended
   December 31, 2003, 2002 and 2001                                        F-15
Statement of Cash Flows for the years
   ended December 31, 2003, 2002 and 2001                                  F-16
Notes to Financial Statements                                              F-17

Coso Power Developers:
----------------------
KPMG LLP Independent Auditors' Report                                      F-18
Balance Sheets as of December 31, 2003 and 2002                            F-19
Statement of Operations for the years ended
   December 31, 2003, 2002 and 2001                                        F-20
Statement of Partners' Capital for the years ended
   December 31, 2003, 2002 and 2001                                        F-21
Statement of Cash Flows for the years
   ended December 31, 2003, 2002 and 2001                                  F-22
Notes to Financial Statements                                              F-23

Supplemental Unaudited Condensed quarterly Financial
information for 2003, 2002 and 2001                                        F-24

Coso Partnerships:
------------------
Supplemental Condensed Combined Financial
   Information for the Coso Partnerships:
Unaudited Condensed Combined Balance Sheets as
   of December 31, 2003 and 2002                                           F-25
Unaudited Condensed Combined Statements of
   Operations for the years ended
   December 31, 2003, 2002 and 2001                                        F-26
Unaudited Condensed Combined Statements of
   Cash Flows for the years ended
   December 31, 2003, 2002 and 2001                                        F-27
Notes to the Unaudited Condensed Combined
   Financial Statements                                                    F-28

<PAGE>


                          Independent Auditors' Report



Caithness Coso Funding Corp.:


We have audited the accompanying  balance sheets of Caithness Coso Funding Corp.
as of December 31, 2003 and 2002, and the related  statements of income and cash
flows for each of the years in the  three-year  period ended  December 31, 2003.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Caithness Coso Funding Corp. as
of December 31, 2003 and 2002,  and the results of its  operations  and its cash
flows for each of the years in the three-year period ended December 31, 2003, in
conformity with accounting principles generally accepted in the United States of
America.






February 6, 2004
New York, New York

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





                                      F-1
<PAGE>


                                                    CAITHNESS COSO FUNDING CORP.

                                                           Balance Sheets

                                                     December 31, 2003 and 2002

                                                       (Dollars in thousands)
<TABLE>
<CAPTION>

                 Assets                                                     2003                  2002
                                                                        ------------          ------------
<S>                                                                    <C>                   <C>
Accrued interest receivable                                         $       1,008                 1,130
Project loan to Coso Finance Partners                                      97,547               110,955
Project loan to Coso Energy Developers                                     84,821                89,875
Project loan to Coso Power Developers                                      71,246                80,401
                                                                        ------------          ------------

               Total assets                                         $     254,622               282,361
                                                                        ============          ============

                 Liabilities and Stockholders' Equity
Senior secured notes:
     Accrued interest payable                                       $       1,008                 1,130
     9.05% notes due December 15, 2009                                    253,614               281,231
                                                                        ------------          ------------

               Total liabilities                                          254,622               282,361

Stockholders' equity (note 5)                                                 --                    --
                                                                        ------------          ------------

               Total liabilities and stockholders' equity           $     254,622               282,361
                                                                        ============          ============
</TABLE>

See accompanying notes to financial statements.




                                                                F-2

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

                                                    Statements of Income

                                        Years ended December 31, 2003, 2002, and 2001

                                                   (Dollars in thousands)



                                                                     2003                  2002                  2001
                                                                --------------        --------------        --------------
<S>                                                            <C>                       <C>                   <C>
Revenue:
     Interest income                                        $        24,828               26,931                28,820

Expense:
     Interest expense                                               (24,828)             (26,931)              (28,820)
                                                                 --------------       --------------        --------------

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, 2003, 2002, and 2001

                                                     (Dollars in thousands)



                                                                    2003                   2002                 2001
                                                               ---------------       ---------------       ---------------
<S>                                                            <C>                   <C>                   <C>
Cash flows from investing activities - repayment
  of project loans                                        $        27,739                 21,864                27,128
                                                               ---------------       ---------------       ---------------

Cash flows from financing activities - repayment
  of 9.05% notes                                                  (27,739)               (21,864)              (27,128)
                                                               ---------------       ---------------       ---------------
             Net changes in cash                                      --                     --                    --

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

Cash at end of year                                       $           --                     --                    --
                                                               ===============       ===============       ===============
Supplemental cash flow disclosures:
     Interest paid                                        $        24,950                 27,026                28,881
</TABLE>


See accompanying notes to financial statements.

                                                                F-4
<PAGE>
                          CAITHNESS COSO FUNDING CORP.

                          Notes to Financial Statements

                        December 31, 2003, 2002, and 2001

                             (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  accounting
     principles  generally  accepted  in the United  States of America  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, 2003 and 2002 is $253,614 and
     $281,231, respectively.

     New Accounting Pronouncements

     The Financial  Accounting  Standards Board (FASB) issued FAS Interpretation
     No. 45  (FIN 45),  Guarantor's  Accounting and Disclosure  Requirements for
     Guarantees,  Including Indirect  Guarantees of Indebtedness of Others. This
     is  an   interpretation   of  FASB   Statements   No. 5,   Accounting   for
     Contingencies,  No. 57, Related Party Disclosures, and No. 107, Disclosures
     about  Fair  Value  of  Financial   Instruments   and  Rescission  of  FASB
     Interpretation  No. 34,  Disclosures of Indirect Guarantees of Indebtedness
     of Others. The Interpretation elaborates on the disclosures to be made by a
     guarantor  in  its  interim  and  annual  financial  statements  about  its
     obligations under certain  guarantees that it has issued.  The Statement is
     being  applied  prospectively,  to  guarantees  issued  or  modified  after
     December 31,  2003.  FIN 45  has no impact  on  Funding  Corp.'s  financial
     statements.

(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 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 Notes for each year ending  December 31  is as
     follows:

                                                  Amount
                                               ------------
                      2004                  $     31,332
                      2005                        35,480
                      2006                        38,286
                      2007                        47,419
                      2008                        49,261
                      Thereafter                  51,836
                                               ------------
                                            $    253,614
                                               ============

     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 a 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>



                          Independent Auditors' Report



The Partners and Management Committee
Coso Finance Partners:


We have audited the  accompanying  balance sheets of Coso Finance Partners as of
December 31, 2003 and 2002, and the related statements of operations,  partners'
capital,  and cash flows for each of the years in the  three-year  period  ended
December 31,  2003.  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 auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Coso Finance  Partners as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for each of the  years  in the  three-year  period  ended  December 31,  2003 in
conformity with accounting principles generally accepted in the United States of
America.

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.






February 6, 2004
New York, New York

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




                                      F-6
<PAGE>


                                                      COSO FINANCE PARTNERS

                                                         Balance Sheets

                                                   December 31, 2003 and 2002

                                                     (Dollars in thousands)
<TABLE>
<CAPTION>
                  Assets                                                          2003                  2002
                                                                             ---------------       ---------------

<S>                                                                      <C>                    <C>
Cash and cash equivalents                                                $         1,429                 4,215
Restricted cash and investments (note 2)                                          24,657                28,692
Accounts receivable, net (note 2)                                                  6,925                 7,431
Prepaid expenses and other assets                                                    872                 1,068
Amounts due from related parties (note 7)                                          1,286                 1,190
Property, plant, and equipment, net (note 4)                                     134,778               136,313
Advances to New CLPSI Company, LLC (note 3)                                        4,162                 4,010
Power purchase contract, net (note 2)                                              8,798                 9,945
Deferred financing costs, net (note 2)                                             1,893                 2,208
                                                                             ---------------       ---------------

              Total assets                                                $      184,800               195,072
                                                                             ===============       ===============

                  Liabilities and Partners' Capital

Accounts payable and accrued liabilities (notes 5)                        $        4,500                 5,764
Amounts due to related parties (note 7)                                              474                   467
Other liabilities (notes 2 and 5)                                                 15,603                12,478
Project loans (note 6)                                                            97,547               110,955
                                                                             ---------------       ---------------

              Total liabilities                                                  118,124               129,664

Commitments and contingencies (notes 5, 6, and 9)

Partners' capital                                                                 66,676                65,408
                                                                             ---------------       ---------------

              Total liabilities and partners' capital                     $      184,800               195,072
                                                                             ===============       ===============
</TABLE>

See accompanying notes to financial statements.





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

                                                  Statements of Operations

                                        Years ended December 31, 2003, 2002, and 2001

                                                   (Dollars in thousands)



                                                                 2003                  2002                  2001
                                                           ------------------    ------------------    ------------------
<S>                                                       <C>                   <C>                   <C>
Revenue:
  Energy revenues (notes 2, 7, and 9)                     $      45,526                75,906                40,190
  Capacity and bonus payments                                    14,266                16,159                13,210

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

              Total revenue                                      59,792                92,065                53,400
                                                           ------------------    ------------------    ------------------

Operating expenses:
  Plant operating expenses                                        9,951                 9,832                 9,010
  Royalty expense (note 5)                                       13,081                12,914                 9,950
  Depreciation and amortizatio                                   10,643                10,630                10,222
                                                           ------------------    ------------------    ------------------

              Total operating expenses                           33,675                33,376                29,182
                                                           ------------------    ------------------    ------------------

              Operating income                                   26,117                58,689                24,218
                                                           ------------------    ------------------    ------------------

Other (income) expenses:
  Interest and other income                                      (1,624)               (1,574)               (2,928)
  Interest expense on project loan                                9,738                10,836                11,732
  Noncash interest expense                                          519                   315                   705
                                                           ------------------    ------------------    ------------------

              Total other expenses                                8,633                 9,577                 9,509
                                                           ------------------    ------------------    ------------------

Income before cumulative effect of
  change in accounting principle                                 17,484                49,112                14,709

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


              Net income                                  $      15,704                49,112                14,709
                                                           ==================    ==================    ==================
</TABLE>

See accompanying notes to financial statements.





                                                              F-8


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

                                               Statements of Partner's Capital

                                        Years ended December 31, 2003, 2002, and 2001

                                                   (Dollars in thousands)



                                                                                   New CLOC
                                                                ESCA               Company,
                                                                 LLC                  LLC                 Total
                                                          ------------------   ------------------   -------------------
<S>                                                       <C>                  <C>                  <C>
Balance at December 31, 2000                              $     26,607               20,264                46,871

Net income                                                       7,884                6,825                14,709

Distributions to partners                                       (4,907)              (4,248)               (9,155)
                                                          ------------------   ------------------   -------------------

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
                                                          ==================   ==================   ===================
</TABLE>

See accompanying notes to financial statements.





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

                                                   Statements of Cash Flows

                                         Years ended December 31, 2003, 2002, and 2001

                                                    (Dollars in thousands)



                                                                     2003                 2002                 2001
                                                               ------------------   -----------------    -----------------
<S>                                                            <C>                  <C>                  <C>
Cash flows from operating activities:
  Net income                                                   $     15,704              49,112               14,709
  Adjustments to reconcile net income to net
    cash provided by operating activities:
       Depreciation and amortization                                 10,643              10,630               10,222
       Noncash interest expense                                         519                 315                  705
       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                                             486              (4,395)              (2,774)
         Advances to New CLPSI Company, LLC                            (152)                 (5)                  67
         Accounts payable and accrued liabilities                    (1,264)               (716)                 486
         Amounts due from related parties                               (96)              8,172               (7,402)
         Amounts due to related parties                                   7                 (94)                (136)
         Other                                                          883               1,380
                                                               ------------------   -----------------    -----------------
           Net cash provided by operating activities                 28,726              64,399               17,112
                                                               ------------------   -----------------    -----------------
Cash flows from investing activities:
  Capital expenditures                                               (7,703)             (5,357)                (436)
  Decrease (increase) in restricted cash                              4,035              (7,367)               1,671
                                                               ------------------   -----------------    -----------------
           Net cash (used in) provided by
             investing activities                                    (3,668)            (12,724)               1,235
                                                               ------------------   -----------------    -----------------
Cash flows from financing activities:
  Distributions to partners                                         (14,436)            (36,129)              (9,155)
  Repayment of project financing loans                              (13,408)            (11,595)             (12,434)
                                                               ------------------   -----------------    -----------------

           Net cash used in financing activities                    (27,844)            (47,724)             (21,589)
                                                               ------------------   -----------------    -----------------

           Net change in cash and cash equivalents                   (2,786)              3,951               (3,242)

Cash and cash equivalents at beginning of year                        4,215                 264                3,506
                                                               ------------------   -----------------    -----------------

Cash and cash equivalents at end of year                       $      1,429               4,215                  264
                                                               ==================   =================    =================

Supplemental cash flow disclosure:
  Cash paid for interest                                       $      9,798              10,880               11,763
</TABLE>


See accompanying notes to financial statements.





                                                              F-10
<PAGE>

                              COSO FINANCE PARTNERS

                          Notes to Financial Statements

                        December 31, 2003, 2002, and 2001

                             (Dollars in thousands)




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

     Coso Finance Partners (CFP or the  Partnership) was formed on July 7,  1987
     in connection  with the  refinancing  of the  construction  of 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 of which are
     affiliated Delaware limited liability companies.

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

     The  Partnership  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, the Partnership  completed
          the first  ten-year  period.  At that time,  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  from  which  the  Partnership
          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 the  Partnership  for the years ended
          December 31, 2003,  2002, and 2001 was 5.37,  4.66, and 7.46 cents per
          kWh,  respectively.  Starting May 1, 2002, CFP 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 delivered  exceeds 85%
          of the plant capacity stated in the PPC. In 2003,  2002, and 2001, the
          bonus payments aggregated $2,176, $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 through December 31,  2009 pursuant
     to certain operation and maintenance agreements with New CLOC, the managing
     general partner.

     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

     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  reduction  in  generation  was the  result  of  scheduled
     maintenance which would have been completed in a more expeditious  fashion.
     In addition,  the U.S. Navy (Navy)  reimburses CFP for electricity  paid on
     its behalf (see note 5).  As of December 31, 2003 and 2002, the balance due
     from the Navy was $732 and $1,300,  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,  and  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 $37,253 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.

     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  remainder  of the 30-year  life from the
     plant's commencement of operations.

     Impairment of Long-Lived Assets

     Statement of Financial Accounting Standards (SFAS) No. 144,  Accounting for
     the  Impairment  or  Disposal  of  Long-Lived  Assets,  provides  a  single
     accounting model for long-lived assets to be disposed of. SFAS No. 144 also
     changes  the  criteria  for  classifying  an asset as held  for  sale;  and
     broadens  the  scope of  businesses  to be  disposed  of that  qualify  for
     reporting as discontinued  operations and changes the timing of recognizing
     losses  on  such  operations.  The  Partnership  adopted  SFAS  No. 144  on
     January 1,  2002.  The  adoption  of SFAS  No. 144  did not have a material
     impact on the Partnership's financial statements.

     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.

     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 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 life of the respective
     assets. These deferred costs of $58 and $215 at December 31, 2003 and 2002,
     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,  2003, 2002, and
     2001, such costs were $577, $305, and $561, respectively.

     Reclassifications

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

     Deferred Financing Costs

     Deferred  financing costs as of December 31,  2003 and 2002 consist of loan
     fees and other costs of financing  that are amortized  over the term of the
     related  financing.  Amortization  expense for the years ended December 31,
     2003,  2002, and 2001 included in noncash interest expense were $315, $315,
     and $705, respectively.  Accumulated amortization at December 31,  2003 and
     2002 was $2,228 and $1,913, respectively.

     Power Purchase Contract

     The PPC that is amortized on a straight-line  basis over the remaining term
     of the PPC, which 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,  2003 and 2002 was  $5,546  and
     $4,399, 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, 2003 and 2002 was $133,507 and $133,736, respectively.

     Cash and 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 $25,000 to be paid to
     the Navy in 2009 (see note 5)  totaling $13,093 and $11,957 at December 31,
     2003 and 2002, respectively.  Currently, the monthly amount to be deposited
     into the sinking fund is approximately $111. At December 31, 2003 and 2002,
     sinking fund account includes $7,293 and $2,100 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 sinking  fund for the  project  debt  service
     required  by  the  project  loan  (see note 6).   The  carrying  amount  of
     restricted cash and investments at December 31,  2003 and 2002 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 financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets,  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 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,  2003 and 2002, because
     of the relatively short maturities of these  instruments.  The project loan
     as of  December 31,  2003 and 2002 has an estimated  fair value of $105,838
     and $110,955,  respectively, based on the quoted market price of the senior
     secured notes (see note 6).

     The advances to New CLPSI  Company, LLC  (see note 3)  approximate the fair
     value.

     Asset Retirement Obligations

     In June 2001, the Financial  Accounting  Standards Board (FASB) issued 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, CFP adopted SFAS No. 143 and estimated
     the  restoration  costs CFP  expects  to incur when the land lease with the
     Navy expires will be approximately $9.1 million.  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.  As of December  31, 2003,  the  accumulated
     liability  associated with the restoration costs was $2,243 and is included
     in other  liabilities.  Accretion  expense for the year ended  December 31,
     2003 included in other  interest  expense was $204. If CFP had adopted SFAS
     No. 143  retroactively  to January 1, 2001,  net income for the years ended
     December  31,  2002  and  2001  would  have  decreased  by $199  and  $182,
     respectively.

     New Accounting Pronouncements

     The FASB issued FASB Interpretation No. 45 (FIN 45), Guarantor's Accounting
     and Disclosure  Requirements for Guarantees,  Including Indirect Guarantees
     of Indebtedness  of Others.  This is an  interpretation  of FASB Statements
     No. 5, Accounting for Contingencies, No. 57, Related Party Disclosures, and
     No. 107,  Disclosures  about  Fair  Value  of  Financial  Instruments,  and
     rescission  of  FASB   Interpretation   No. 34,   Disclosures  of  Indirect
     Guarantees of Indebtedness of Others. The Interpretation  elaborates on the
     disclosures  to be made by a guarantor in its interim and annual  financial
     statements  about its  obligations  under  certain  guarantees  that it has
     issued.  The  Interpretation  is being applied  prospectively to guarantees
     issued or modified  after  December 31,  2002. At  December 31,  2003,  the
     Partnership's only guarantees relate to the project loan (see note 6). This
     guarantee  is not within the scope of the initial  recognition  and initial
     measurement provision of FIN 45.

     In December 2003, the FASB issued  Interpretation  No. 46 (Revised December
     2003),   (FIN  46)  Consolidation  of  Variable   Interest   Entities,   an
     interpretation   of  ARB  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.   The  effect  of  the  application  of  this
     Interpretation  on CFP's financial  statements is currently being evaluated
     and the expected impact has not yet been determined.

(3)  Advances to New CLPSI Company, LLC

     New CLPSI  Company, LLC  (CLPSI) is a wholly owned  subsidiary of Caithness
     Acquisition  Company,  LLC (CAC). CLPSI purchases,  stores, and distributes
     spare parts to CFP, Coso Energy Developers (CED), and Coso Power Developers
     (CPD) (collectively  known as 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.  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.

(4)  Property, Plant, and Equipment

     Property, plant, and equipment at December 31, 2003 and 2002 consist of the
     following:

                                                         2003          2002
                                                         ----          ----
       Power plant and gathering system           $    156,608       155,714
       Transmission line                                 5,746         5,746
       Wells and resource development costs             80,262        72,982
                                                       -------       -------
                                                       242,616       234,442
       Less accumulated depreciation and
           amortization                               (107,838)      (98,129)
                                                       -------       -------
                                                  $    134,778       136,313
                                                       =======       =======

     The transmission line costs represent the Partnership's  share of the costs
     of  construction  of  transmission  lines from Inyokern,  California to the
     Edison  substation  at  Kramer,  California  and from  Kramer to the Edison
     substation at Victorville, California.

(5)  Royalty Expense

     Royalty expense for the years ended  December 31,  2003,  2002, and 2001 is
     summarized as follows:

                               2003          2002          2001
                               ----          ----          ----
     Unit 1                $   6,047         6,281         4,889
     Others                    7,034         6,633         5,061
                              ------        ------         -----
     Total                 $  13,081        12,914         9,950
                              ======        ======         =====

     CFP pays a royalty for Unit 1 through reimbursement of electricity supplied
     to the Navy by Edison from  electricity  generated at the Navy I plant. The
     reimbursement  is based on a pricing  formula  that is included in the Navy
     contract.  This formula is primarily based upon the tariff rates charged by
     Edison,  which were increased in 2001 by the CPUC, and is subject to future
     revision.  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. These rates are in effect for one year, after which new rates will be
     established in accordance  with CPUC  guidelines.  Indices  utilized in the
     calculation  of the  royalties  under  the  CFP  Unit 1  contract  remained
     unchanged  historically  based on an agreement between the Navy and CFP. In
     October 2002 and November  2001,  modifications  to the  calculation of the
     reimbursement pricing formula were made to the Navy contract resulting in a
     reduction of accrued  royalties of $1.3 million  and $6.5 million for those
     periods,  respectively,  which were agreed to by the Navy. The parties have
     currently agreed to a replacement index and true-up calculation in favor of
     CFP. For Units 2 and 3, CFP's  royalty  expense paid to the Navy is a fixed
     percentage  of  electricity  sales at 15% of  revenue  received  by the CFP
     through 2003, and will increase to 20% from 2004 through 2009.

     In addition,  CFP is required to pay the Navy $25,000 in December 2009, the
     date the  contract  expires.  The payment is secured by a sinking fund (see
     note 2). The balance included in other liabilities at December 31, 2003 and
     2002 was approximately $13.1 million and $12.1 million, respectively.

(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 $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
                                                     ------
                  2004                           $   10,694
                  2005                               15,100
                  2006                               16,160
                  2007                               17,337
                  2008                               18,295
               Thereafter                            19,961
                                                     ------
                                                 $   97,547
                                                     ======


     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.

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

                                                     Amount
                                                     ------
                  2004                           $   31,332
                  2005                               35,480
                  2006                               38,286
                  2007                               47,419
                  2008                               49,261
               Thereafter                            51,836
                                                    -------
                                                 $  253,614
                                                    =======


(7)  Related Party Transactions

     The amounts due from and to related parties at  December 31,  2003 and 2002
     consist of the following:

                                                        2003           2002
                                                        ----           ----
     Amounts due from related parties:
       Coso Operating Company, LLC                  $    116            208
       Coso Power Developers                             838            563
       Coso Energy Developers                            332            419
                                                       -----          -----
                                                    $  1,286          1,190
                                                       =====          =====
     Amounts due to related parties:
       Caithness Coso Funding Corp.                 $    388            446
       Caithness Operating Company, LLC                   86             21
                                                       -----          -----
                                                    $    474            467
                                                       =====          =====

     COC is 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.

     CFP is charged a nonmanaging fee payable to the nonmanaging partner,  ESCA,
     or its assignee. For the years ended December 31, 2003, 2002, and 2001, CFP
     paid $243, $241, and $237, respectively.

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

     CFP is charged by CLPSI for both its inventory usage and its portion of the
     expenses of operating  CLPSI.  The charges to CFP from CLPSI in 2003, 2002,
     and  2001,   which  are  included  in  plant   operating   expenses,   were
     approximately $264, $231, and $147, 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.  CFP's steam sharing
     revenue,  included in energy revenues,  were $7,796, $5,801, and $7,938 for
     the years ended December 31, 2003, 2002, and 2001, respectively.

(8)  Settlement of Litigation

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

(9)  Commitments and Contingencies

     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 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 it 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.  It is unknown if any further  appeals will be taken in this
     matter.

     Court of Appeals' Decision on Line Loss Factor

     Edison filed a petition for a writ of review of 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.

(10) Risks and Uncertainties

     CFP  sells  100% of the  electrical  energy  generated  to  Edison  under a
     long-term  PPC,  and  is   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  regulation,  (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>



                          Independent Auditors' Report



The Partners and Management Committee
Coso Energy Developers:


We have audited the accompanying  balance sheets of Coso Energy Developers as of
December 31, 2003 and 2002, and the related statements of operations,  partners'
capital,  and cash flows for each of the years in the  three-year  period  ended
December 31,  2003.  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 auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Coso Energy Developers as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for each of the years in the  three-year  period  ended  December 31,  2003,  in
conformity with accounting principles generally accepted in the United States of
America.

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.






February 6, 2004
New York, New York

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




                                      F-12
<PAGE>

                                                       COSO ENERGY DEVELOPERS

                                                           Balance Sheets

                                                     December 31, 2003 and 2002

                                                       (Dollars in thousands)
<TABLE>
<CAPTION>
                   Assets                                                           2003                   2002
                                                                              ---------------        ---------------
<S>                                                                           <C>                    <C>
Cash and cash equivalents                                                 $           603                  1,423
Restricted cash and investments                                                    10,155                  6,646
Accounts receivable (note 2)                                                        6,830                  6,681
Prepaid expenses and other assets                                                   1,094                  1,370
Amounts due from related parties (note 7)                                             442                    421
Property, plant, and equipment (note 5)                                           130,519                135,853
Advances to New CLPSI Company, LLC (note 4)                                           548                    674
Investment in Coso Transmission Line Partners (note 3)                              2,542                  2,653
Power purchase contract, net (note 2)                                              16,293                 17,365
Deferred financing costs, net (note 2)                                              1,530                  1,785
                                                                              ---------------        --------------

              Total assets                                                $       170,556                174,871
                                                                              ===============        ==============

                   Liabilities and Partners' Capital

Accounts payable and accrued liabilities                                  $         2,114                  1,644
Amounts due to related parties (note 7)                                            27,282                 26,317
Other liabilities (note 2)                                                          1,522                    432
Project loan (note 6)                                                              84,821                 89,875
                                                                              ---------------        --------------

              Total liabilities                                                   115,739                118,268

Commitments and contingencies (notes 6 and 8)

Partners' capital                                                                  54,817                 56,603
                                                                              ---------------        --------------

              Total liabilities and partners' capital                     $       170,556                174,871
                                                                              ===============        ==============
</TABLE>

See accompanying notes to financial statements.





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

                                                    Statements of Operations

                                          Years ended December 31, 2003, 2002, and 2001

                                                     (Dollars in thousands)


                                                                2003               2002                2001
                                                             ----------         ----------          ----------
<S>                                                       <C>                   <C>                   <C>
Revenues:
  Energy revenues (notes 2, 7, and 8)                     $    32,930             65,489              31,133
  Capacity and bonus payments                                  13,939             15,763              12,908
                                                             -----------        ----------          ----------

              Total revenues                                   46,869             81,252              44,041
                                                             -----------        ----------          ----------

Operating expenses:
  Plant operating expense                                      12,722             11,748              10,221
  Royalty expense                                               2,778              2,436               5,203
  Depreciation and amortization                                 9,320             14,342              15,972
                                                             -----------        ----------          ----------

              Total operating expenses                         24,820             28,526              31,396
                                                             -----------        ----------          ----------

              Operating income                                 22,049             52,726              12,645
                                                             -----------        ----------          ----------

Other (income)/expenses:
  Interest and other income                                    (1,141)            (1,455)             (3,766)
  Interest expense on project loan                              8,018              8,567               8,958
  Noncash interest expense                                        367                255                 440
                                                             -----------        ----------          ----------

              Total other expenses                              7,244              7,367               5,632
                                                             -----------        ----------          ----------

Income before cumulative effect
  of change in accounting principle                            14,805             45,359               7,013

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



              Net income                                  $    13,881             45,359               7,013
                                                             ===========        ==========          ==========
</TABLE>

See accompanying notes to financial statements.





                                                               F-14
<PAGE>

<TABLE>
<CAPTION>
                                                      COSO ENERGY DEVELOPERS

                                                  Statements of Partners' Capital

                                          Years ended December 31, 2003, 2002, and 2001

                                                     (Dollars in thousands)

                                                                   Caithness
                                                                     Coso                  New
                                                                   Holdings,               CHIP
                                                                      LLC              Company, LLC            Total
                                                                 ------------          ------------         ------------
<S>                                                            <C>                  <C>                   <C>
Balance at December 31, 2000                                   $    42,978                26,267               69,245

Distributions to partners                                          (12,218)              (11,278)             (23,496)

Net income                                                           3,647                 3,366                7,013
                                                                 ------------          ------------         -------------

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
                                                                 ============          ============         =============
</TABLE>

See accompanying notes to financial statements.





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

                                                     Statements of Cash Flows

                                           Years ended December 31, 2003, 2002, and 2001

                                                      (Dollars in thousands)


                                                                         2003              2002               2001
                                                                     -----------        -----------        -----------
<S>                                                              <C>                  <C>                  <C>
Cash flows from operating activities:
  Net income                                                     $     13,881             45,359               7,013
  Adjustments to reconcile net income to
    net cash provided by operating activities:
       Depreciation and amortization                                    9,320             14,342              15,972
       Non cash interest expense                                          367                255                 440
       Cumulative effect of change in accounting
         principle                                                        924                 --                  --
       Changes in operating assets and liabilities:
         Accounts receivable, prepaid expenses,
           and other assets                                               127             (4,263)             (2,735)
         Advances to New CLPSI Company, LLC                               126                115                 262
         Accounts payable and accrued liabilities                         470             (6,055)                860
         Amounts due from related parties                                 (21)               (20)                (36)
         Other                                                           (144)               432                  --
         Amounts due to related parties                                   965               (950)              2,946
                                                                     -----------        -----------        ------------
           Net cash provided by operating activities                   26,015             49,215              24,722
                                                                     -----------        -----------        ------------
Cash flows from investing activities:
  Capital expenditures                                                 (2,716)              (706)             (9,698)
  Investment in Coso Transmission Line Partners                           111                 85                 133
  (Increase) decrease in restricted cash                               (3,509)               722               7,134
                                                                     -----------        -----------        ------------
           Net cash (used in) provided by
             investing activities                                      (6,114)               101              (2,431)
                                                                     -----------        -----------        ------------
Cash flows from financing activities:
  Distributions to partners                                           (15,667)           (41,518)            (23,496)
  Repayment of project financing loans                                 (5,054)            (6,375)             (4,657)
                                                                     -----------        -----------        ------------

           Net cash used in financing activities                      (20,721)           (47,893)            (28,153)
                                                                     -----------        -----------        ------------

           Net change in cash and cash equivalents                       (820)             1,423              (5,862)

Cash and cash equivalents at beginning of year                          1,423                 --               5,862
                                                                     -----------        -----------        ------------

Cash and cash equivalents at end of year                         $        603              1,423                  --
                                                                     ===========        ===========        ============
Supplemental cash flow disclosure:,
  Cash paid for interest                                         $      8,042              8,595               8,964
</TABLE>


See accompanying notes to financial statements.





                                                             F-16
<PAGE>

                             COSO ENERGY DEVELOPERS

                          Notes to Financial Statements

                        December 31, 2003, 2002, and 2001

                             (Dollars in thousands)




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

     Coso Energy  Developers (CED or the  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 the 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 the BLM.  Coso Land
     Company (CLC), the original  leaseholder,  retained a 5% overriding royalty
     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, 2003, 2002, and 2001 was 5.37, 4.66, and 7.46 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 stated in the PPC. In 2003,  2002, and 2001, the
          bonus payments aggregated $2,126, $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 through December 31,  2009 pursuant
     to certain operation and maintenance agreements with New CHIP, the managing
     general partner.

     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.  Revenue was  recognized  based on the payment  rates  scheduled in
     CED's PPC with Edison through March 1999.  From March 1999 through December
     31, 2001, and  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.

     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 remainder of the 30-year life from the plant's
     commencement of operations.

     Impairment of Long-Lived Assets

     Statement of Financial Accounting Standards (SFAS) No. 144,  Accounting for
     the  Impairment  or  Disposal  of  Long-Lived  Assets,  provides  a  single
     accounting model for long-lived assets to be disposed of. SFAS No. 144 also
     changes  the  criteria  for  classifying  an asset as held  for  sale;  and
     broadens  the  scope of  businesses  to be  disposed  of that  qualify  for
     reporting as discontinued  operations and changes the timing of recognizing
     losses  on  such  operations.  The  Partnership  adopted  SFAS  No.144  on
     January 1,  2002.  The  adoption  of SFAS  No. 144  did not have a material
     impact on the Partnership's financial statements.

     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 that is 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.

     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 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 $420  and $641 at  December 31,  2003 and  2002,
     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,
     2003, 2002, and 2001, such costs were $1,493, $0, and $160, respectively.

     Reclassifications

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

     Deferred Financing Costs

     Deferred  financing costs as of December 31,  2003 and 2002 consist of loan
     fees and other costs of financing  that are amortized  over the term of the
     related  financing.  Amortization  expense for the years ended December 31,
     2003, 2002, and 2001 included in non cash interest expense were $255, $255,
     and $440, respectively.  Accumulated amortization at December 31,  2003 and
     2002 was $1,502 and $1,247, respectively.

     Power Purchase Contract

     Intangible asset as of December 31,  2003 and 2002 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,   2003  and  2002  was  $5,150  and  $4,078,
     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, 2003 and 2002 was $123,010 and $129,298, respectively.

     Cash and 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, 2003 and 2002, all of 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
     sinking fund  requirements  for the project  debt  service  required by the
     project loan  (see note 6).  The  carrying  amount of  restricted  cash and
     investments at December 31, 2003 and 2002 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 financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets,  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,  2003 and 2002, because
     of the relatively short maturity of these instruments.  The project loan as
     of  December 31,  2003 and 2002 has an estimated  fair value of $92,031 and
     $89,875,  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 (see note 4) approximate the fair value.

     Asset Retirement Obligations

     In June 2001, the Financial  Accounting  Standards Board (FASB) issued 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 the
     Navy expires and will be approximately $8.9 million.  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,  2003,  the  accumulated
     liability  associated with the restoration costs was $1,234 and is included
     in other  liabilities.  Accretion  expense for the year ended  December 31,
     2003 included in noncash interest expense was $112. If CED had adopted SFAS
     No. 143  retroactively  to January 1, 2001,  net income for the years ended
     December  31,  2002  and  2001  would  have  decreased  by $110  and  $100,
     respectively.

     New Accounting Pronouncements

     The FASB issued FASB Interpretation No. 45 (FIN 45), Guarantor's Accounting
     and Disclosure  Requirements for Guarantees,  Including Indirect Guarantees
     of Indebtedness of Others.  This is an  interpretation  of FASB SFAS No. 5,
     Accounting for Contingencies,  SFAS No. 57, Related Party Disclosures,  and
     SFAS No. 107,  Disclosures about Fair Value of Financial  Instruments,  and
     rescission  of  FASB   Interpretation   No. 34,   Disclosures  of  Indirect
     Guarantees of Indebtedness of Others. The Interpretation  elaborates on the
     disclosures  to be made by a guarantor in its interim and annual  financial
     statements  about its  obligations  under  certain  guarantees  that it has
     issued.  The  Interpretation  is being applied  prospectively to guarantees
     issued or modified  after  December 31,  2002. At  December 31,  2003,  the
     Partnership's only guarantees relate to the project loan (see note 6). This
     guarantee  is not within the scope of the initial  recognition  and initial
     measurement provision of FIN 45.

     In December 2003, the FASB issued  Interpretation  No. 46 (Revised December
     2003),   (FIN  46)  Consolidation  of  Variable   Interest   Entities,   an
     interpretation   of  ARB  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.   The  effect  of  the  application  of  this
     Interpretation  on CED's financial  statements is currently being evaluated
     and the expected impact has not yet been determined.

(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

     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, 2003 and 2002 consist of the
     following:

                                                          2003          2002
                                                        --------      --------
     Power plant and gathering system                 $  148,198       147,896
     Transmission line                                     9,120         9,120
     Wells and resources development costs                93,612        90,896
                                                         -------       -------
                                                         250,930       247,912
     Less accumulated depreciation and amortization     (120,411)     (112,059)
                                                         -------       -------
                                                      $  130,519       135,853
                                                         =======       =======

     The transmission line costs represent the Partnership's  share of the costs
     of  construction  of  transmission  lines from Inyokern,  California to the
     Edison  substation  at  Kramer,  California  and from  Kramer to the Edison
     substation at Victorville, California.

(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
                                                      ------
                  2004                            $    9,920
                  2005                                 8,683
                  2006                                10,388
                  2007                                17,552
                  2008                                18,574
               Thereafter                             19,704
                                                      ------
                                                  $   84,821
                                                      ======

     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.

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

                                                      Amount
                                                      ------
                  2004                            $   31,332
                  2005                                35,480
                  2006                                38,286
                  2007                                47,419
                  2008                                49,261
               Thereafter                             51,836
                                                     -------
                                                  $  253,614
                                                     =======


(7)  Related Party Transactions

     The amounts due from and to related parties at  December 31,  2003 and 2002
     consist of the following:

                                                      2003              2002
                                                      ----              ----
     Amounts due from related parties:
       Coso Land Company:
         Principal                                $    141               141
         Accrued interest                              301               280
                                                    ------            ------
                                                  $    442               421
                                                    ======            ======
     Amounts due to related parties:
       Coso Power Developers                      $    380                15
       Coso Finance Partners                           332               563
       Coso Land Company                            25,809            24,995
       Caithness Coso Funding Corp.                    337               361
       Coso Operating Company, LLC                     350               337
       Caithness Operating Company, Inc.                74                46
                                                    ------            ------
                                                  $ 27,282            26,317
                                                    ======            ======

     COC is reimbursed  monthly for  nonthird-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.

     CED is charged a nonmanaging fee payable to the nonmanaging  partner,  CCH,
     or its assignee. For the years ended December 31, 2003, 2002, and 2001, CED
     paid $243, $241, and $237, 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,  2003,  2002,  and 2001 was $814,
     $781,  and  $1,684,  respectively.  Payment  of  royalties  due  to  CLC is
     subordinated to payment of the project loan (see note 6).

     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 $111, $113, and $114 for the years ended December 31,  2003, 2002, and
     2001, respectively.

     CED is charged by CLPSI for both its inventory usage and its portion of the
     expenses of operating  CLPSI. The 2003, 2002, and 2001 costs charged to CED
     from  CLPSI,  which  are  included  in  plant  operating   expenses,   were
     approximately $318, $350, and $324, 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 was
     accrued on this loan for the years ended December 31,  2003, 2002, and 2001
     at 5%, 5%, and 10%,  respectively.  Interest on the note was $21,  $20, and
     $36 in 2003, 2002, and 2001, 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,  were $908, $546, and
     $1,085,   for  the  years  ended   December 31,   2003,   2002,  and  2001,
     respectively.

(8)  Commitments and Contingencies

     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 it
     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. It is unknown if any further appeals will be
     taken in this matter.

     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. CED cannot predict whether
     any subsequent action regarding this matter will be successful.

(9)  Risks and Uncertainties

     CED  sells  100% of the  electrical  energy  generated  to  Edison  under a
     long-term  PPC,  and  is   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>



                          Independent Auditors' Report



The Partners and Management Committee
Coso Power Developers:


We have audited the  accompanying  balance sheets of Coso Power Developers as of
December 31, 2003 and 2002, and the related statements of operations,  partners'
capital,  and cash flows for each of the years in the  three-year  period  ended
December 31,  2003.  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 auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Coso Power  Developers as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for each of the  years  in the  three-year  period  ended  December 31,  2003 in
conformity with accounting principles generally accepted in the United States of
America.

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.






February 6, 2004
New York, New York

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




                                      F-18

<PAGE>

                                                      COSO POWER DEVELOPERS

                                                         Balance Sheets

                                                   December 31, 2003 and 2002

                                                     (Dollars in thousands)
<TABLE>
<CAPTION>
                  Assets                                                                    2003                 2002
                                                                                       --------------       --------------
<S>                                                                                <C>                      <C>
Cash and cash equivalents                                                          $           78                  824
Restricted cash and investments                                                             8,281               10,855
Accounts receivable, net (note 2)                                                           7,985                7,234
Prepaid expenses and other assets                                                             830                1,111
Amounts due from related parties (note 7)                                                   6,412                5,902
Property, plant, and equipment, net (note 5)                                              114,839              116,192
Advances to New CLPSI Company, LLC (note 4)                                                 1,914                1,911
Investment in Coso Transmission Line Partners (note 3)                                      3,128                3,260
Power purchase contract, net (note 2)                                                      17,232               20,026
Deferred financing costs, net (note 2)                                                      1,302                1,519
                                                                                       --------------       --------------

              Total assets                                                         $      162,001              168,834
                                                                                      ===============       ==============

                  Liabilities and Partners' Capital

Accounts payable and accrued liabilities                                           $        1,891                1,948
Amounts due to related parties (note 7)                                                     1,191                  758
Other liabilities (note 2)                                                                  2,589                  366
Project loans (note 6)                                                                     71,246               80,401
                                                                                      ---------------       --------------

              Total liabilities                                                            76,917               83,473

Commitments and contingencies (notes 6 and 8)

Partners' capital                                                                          85,084               85,361
                                                                                      ---------------       --------------

              Total liabilities and partners' capital                              $      162,001              168,834
                                                                                      ===============       ==============
</TABLE>

See accompanying notes to financial statements.





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

                                                  Statements of Operations

                                        Years ended December 31, 2003, 2002, and 2001

                                                    (Dollars in thousands)



<S>                                                           <C>                   <C>                   <C>
                                                                     2003                  2002                  2001
                                                              ------------------    ------------------    ------------------
Revenues:
  Energy revenues (notes 2, 7, and 8)                         $      32,131                63,756                23,411
  Capacity and bonus payments                                        14,018                15,836                12,978
                                                              ------------------    ------------------    ------------------

              Total revenues                                         46,149                79,592                36,389
                                                              ------------------    ------------------    ------------------
Operating expenses:
  Plant operating expense                                             9,777                10,304                 9,679
  Royalty expense                                                     7,520                 6,961                 9,377
  Depreciation and amortization                                      10,113                12,163                15,352
                                                              ------------------    ------------------    ------------------

              Total operating expenses                               27,410                29,428                34,408
                                                              ------------------    ------------------    ------------------

              Operating income                                       18,739                50,164                 1,981
                                                              ------------------    ------------------    ------------------
Other (income)/expenses:
  Interest and other income                                            (426)                 (894)               (2,883)
  Interest expense on project loan                                    7,070                 7,538                 8,128
  Noncash interest expense                                              430                   217                 1,119
                                                              ------------------    ------------------    ------------------

              Total other expenses                                    7,074                 6,861                 6,364
                                                              ------------------    ------------------    ------------------

Income (loss) before cumulative effect
  of change in accounting principle                                  11,665                43,303                (4,383)

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


              Net income (loss)                               $       9,888                43,303                (4,383)
                                                              ==================    ==================    ==================
</TABLE>

See accompanying notes to financial statements.






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

                                                    COSO POWER DEVELOPERS

                                               Statements of Partners' Capital

                                         Years ended December 31, 2003, 2002, and 2001

                                                   (Dollars in thousands)


                                                             Caithness
                                                              Navy II                    New
                                                               Group,                    CTC
                                                                LLC                 Company, LLC             Total
                                                         -------------------      ------------------   -------------------
<S>                                                      <C>                      <C>                  <C>
Balance at December 31, 2000                             $      44,941.5                42,481.5              87,423.0

Distributions to partners                                      (10,410.0)              (10,410.0)            (20,820.0)

Net income                                                      (2,191.5)               (2,191.5)             (4,383.0)
                                                         -------------------      ------------------   -------------------

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 loss                                                        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
                                                         ===================      ==================   ===================
</TABLE>

See accompanying notes to financial statements.





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

                                                  Statements of Cash Flows

                                         Years ended December 31, 2003, 2002, and 2001

                                                   (Dollars in thousands)


                                                                             2003              2002               2001
                                                                       ----------------  ----------------   ----------------
<S>                                                                    <C>               <C>                <C>
Cash flows from operating activities:
  Net income (loss)                                                    $      9,888            43,303             (4,383)
  Adjustments to reconcile net income (loss) to
    net cash provided by operating activities:
       Depreciation and amortization                                         10,113            12,163             15,352
       Noncash interest expense                                                 430               217              1,119
       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               (552)           (4,475)            (2,992)
         Advances to New CLPSI Company, LLC                                      (3)                2                 50
         Accounts payable and accrued liabilities                               (57)          (13,912)             3,582
         Amounts due from related parties                                      (510)              237               (186)
         Other                                                                 (122)              366                 --
         Amounts due to related parties                                         433            (7,020)             5,962
                                                                       ----------------  ----------------   ----------------
           Net cash provided by operating activities                         21,479            30,881             18,504
                                                                       ----------------  ----------------   ----------------
Cash flows from investing activities:
  Capital expenditures                                                       (5,611)             (896)              (276)
  Investment in Coso Transmission Line Partners                                 132               138                130
  Decrease (increase) in restricted cash                                      2,574            (5,338)             4,697
                                                                       ----------------  ----------------   ----------------

           Net cash (used in) provided by investing activities               (2,905)           (6,096)             4,551
                                                                       ----------------  ----------------   ----------------
Cash flows from financing activities:
  Distributions to partners                                                 (10,165)          (20,162)           (20,820)
  Repayment of project financing loan                                        (9,155)           (3,799)            (9,976)
                                                                       ----------------  ----------------   ----------------

           Net cash used in financing activities                            (19,320)          (23,961)           (30,796)
                                                                       ----------------  ----------------   ----------------

           Net change in cash and cash equivalents                             (746)               824             (7,741)

Cash and cash equivalents at beginning of year                                  824                --              7,741
                                                                       ----------------  ----------------   ----------------

Cash and cash equivalents at end of year                               $         78               824                 --
                                                                       ================  ================   ================
Supplemental cash flow disclosure:
  Cash paid for interest                                               $      7,110             7,551              8,154
</TABLE>


See accompanying notes to financial statements.





                                                               F-22
<PAGE>

                              COSO POWER DEVELOPERS

                          Notes to Financial Statements

                        December 31, 2003, 2002, and 2001

                             (Dollars in thousands)




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

     Coso Power  Developers (CPD or the 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 U.S.  Navy,  and CPD pays a
     royalty to the U.S. Navy which was  initially 4% of revenues,  increased to
     10% of revenues at December 31,  1998, and is currently 18% of revenues (as
     of December 24,  1999).  The royalty will increase to 20% of revenues after
     December 15, 2004. The U.S. Navy contract will expire in 2010.

     The  Partnership  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 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  from  which  the  Partnership
          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 the  Partnership for the years
          ended  December 31,   2003,  2002,  and  2001,  was  5.37,  4.66,  and
          7.46 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 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 delivered  exceeds 85%
          of the plant capacity stated in the PPC. In 2003,  2002, and 2001, 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 through December 31,  2009 pursuant
     to certain operation and maintenance  agreements with New CTC, the managing
     general partner.

     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

     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,  Edison limited generation to complete their transmission  system
     maintenance resulting in lower capacity payments. CPD is disputing Edison's
     claim  that  the  reduction  in  generation  was the  result  of  scheduled
     maintenance which would have been completed in a more expeditious fashion.

     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 CPD's PPC with Edison,  through  January 2000.
     From  January  2000  through  December 31,  2001,  and  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 $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.

     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 life of 30 years and, for
     significant  additions,  the remainder of the 30-year life from the plant's
     commencement of operations.

     Impairment of Long-Lived Assets

     Statement of Financial  Accounting Standards (SFAS) No. 144, Accounting for
     the  Impairment  or  Disposal  of  Long-Lived  Assets,  provides  a  single
     accounting model for long-lived assets to be disposed of. SFAS No. 144 also
     changes  the  criteria  for  classifying  an asset as held  for  sale;  and
     broadens  the  scope of  businesses  to be  disposed  of that  qualify  for
     reporting as discontinued  operations and changes the timing of recognizing
     losses  on  such  operations.  The  Partnership  adopted  SFAS  No.  144 on
     January 1,  2002.  The  adoption  of SFAS No.  144 did not have a  material
     impact on the Partnership's financial statements.

     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.

     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 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 $246 and $102 at  December 31,  2003 and
     2002,  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,  2003, 2002, and
     2001, such costs were $0, $328, and $533, respectively.

     Reclassifications

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

     Deferred Financing Costs

     Deferred  financing costs as of December 31,  2003 and 2002 consist of loan
     fees and other costs of financing  that are amortized  over the term of the
     related  financing.  Amortization  expense for the years ended December 31,
     2003,  2002 and 2001 included in noncash  interest  expense were $217, $217
     and $1,119.  Accumulated  amortization  at  December 31,  2003 and 2002 was
     $2,873 and $2,656, respectively.

     Power Purchase Contract

     The PPC,  which is amortized on a  straight-line  basis over the  remaining
     term of the PPC, which will expire in 2010. Annual  amortization of the PPC
     is $2,794.  The PPC  consists  of a gross  carrying  amount of $30,738  and
     accumulated  amortization  at  December 31,  2003 and 2002 was  $13,506 and
     $10,712, 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, 2003 and 2002 was $109,655 and $112,584, respectively.

     Cash and Cash Equivalents

     For  purposes of the  statements  of cash flows,  CPD  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, 2003 and 2002, all of 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
     sinking fund  requirements  for the project  debt  service  required by the
     project loans (see  note 6).  The carrying  amount of  restricted  cash and
     investments at December 31, 2003 and 2002 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 financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts  of assets,  liabilities,  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  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,  2003 and 2002, because
     of the relatively short maturity of these instruments. The project loans as
     of  December 31,  2003 and 2002 have an estimated fair value of $77,302 and
     $80,401,  respectively,  based on the  quoted  market  price of the  senior
     secured notes (see note 6).

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

     Asset Retirement Obligation

     In June 2001, the Financial  Accounting  Standards Board (FASB) issued 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 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 and will be approximately  $8.4 million.  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.  As of  December 31,  2003,  the  accumulated
     liability associated with the restorations costs was $2,345 and is included
     in other  liabilities.  Accretion  expense for the year ended  December 31,
     2003 included in noncash interest expense was $213. If CPD had adopted SFAS
     No. 143  retroactively  to January 1, 2001,  net income for the years ended
     December  31,  2002  and  2001  would  have  decreased  by $215  and  $197,
     respectively.

     New Accounting Pronouncements

     The FASB issued FASB Interpretation No. 45 (FIN 45), Guarantor's Accounting
     and Disclosure  Requirements for Guarantees,  Including Indirect Guarantees
     of Indebtedness of Others. This is an interpretation of FASB Statements No.
     5, Accounting for Contingencies, No. 57, Related Party Disclosures, and No.
     107,  Disclosures about Fair Value of Financial  Instruments and rescission
     of FASB  Interpretation  No. 34,  Disclosures  of  Indirect  Guarantees  of
     Indebtedness of Others. The Interpretation elaborates on the disclosures to
     be made by a guarantor in its interim and annual financial statements about
     its obligations under certain  guarantees that it has issued. The Statement
     is being  applied  prospectively,  to guarantees  issued or modified  after
     December 31, 2002. At December 31, 2003, the Partnership's  only guarantees
     relate to the project loans (see note 6). This  guarantee is not within the
     scope of the initial  recognition  and  initial  measurement  provision  of
     FIN 45.

     In December 2003, the FASB issued  Interpretation  No. 46 (Revised December
     2003),   (FIN  46)  Consolidation  of  Variable   Interest   Entities,   an
     interpretation   of  ARB  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.   The  effect  of  the  application  of  this
     Interpretation  on CPD's financial  statements is currently being evaluated
     and the expected impact has not yet been determined.

(3)  Investment in Coso Transmission Line Partners

     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.  These  charges  are  recorded  by CPD  as  operating  expenses  and
     reflected as an increase in CPD's payable to CTLP (see note 7).

(4)  Advances to New CLPSI Company, LLC

     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, 2003 and 2002 consist of the
     following:

                                                         2003          2002
                                                       -------       -------
     Power, plant, and gathering system             $  149,775       143,542
     Transmission line                                   7,245         7,245
     Wells and resources development costs              59,762        59,761
                                                       -------       -------
                                                       216,782       210,548
     Less accumulated depreciation
     and amortization                                 (101,943)      (94,356)
                                                       -------       -------
                                                    $  114,839       116,192
                                                       =======       =======

     The transmission line costs represent the Partnership's  share of the costs
     of  construction  of  transmission  lines from Inyokern,  California to the
     Edison  substation  at Kramer,  California,  and from  Kramer to the Edison
     substation at Victorville, California.

(6)  Project Loan

     On May 28,  1999,  Caithness  Coso  Funding  Corp.  (Funding Corp.)  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:


             Year ending December 31:                    Amount
             ------------------------                    ------
                  2004                              $    10,718
                  2005                                   11,697
                  2006                                   11,738
                  2007                                   12,530
                  2008                                   12,392
               Thereafter                                12,171
                                                         ------
                                                    $    71,246
                                                         ======


     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.

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


             Year ending December 31:                    Amount
             ------------------------                    ------
                  2004                              $    31,332
                  2005                                   35,480
                  2006                                   38,286
                  2007                                   47,419
                  2008                                   49,261
               Thereafter                                51,836
                                                        -------
                                                    $   253,614
                                                        =======


(7)  Related Party Transactions

     The amounts due from and to related parties at  December 31,  2003 and 2002
     consist of the following:

                                                     2003             2002
                                                   --------         --------
     Amounts due from related parties:
       Coso Energy Developers                    $     380                15
       Coso Operating Company, LLC                   1,122             1,211
       China Lake Joint Venture:
         Principal                                   1,562             1,562
         Accrued interest                            3,348             3,114
                                                     -----             -----
                                                 $   6,412             5,902
                                                     =====             =====
     Amounts due to related parties:
       Coso Finance Partners                     $     838               419
       Caithness Coso Funding Corp.                    283               323
       Caithness Operating Company, LLC                 70                16
                                                     -----             -----
                                                 $   1,191               758
                                                     =====             =====


     COC is reimbursed  monthly for  nonthird-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.

     CPD is  charged a  nonmanaging  fee  payable  to the  nonmanaging  partner,
     Navy II,  its assignee.  For the years ended  December 31,  2003, 2002, and
     2001, CPD paid $243, $241, and $237, respectively.

     CPD is charged for its use of the transmission  line owned by CTLP. For the
     years  ended  December 31,  2003,  2002,  and 2001,  the amount of such net
     charges was $132, $155, and $129, 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 2003, 2002,
     and  2001,   which  are  included  in  plant   operating   expenses,   were
     approximately $189, $237, and $148, 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,  2003, 2002, and
     2001 at 5%, 5%, and 10%, respectively. Interest on the loan was $234, $229,
     and $405, in 2003, 2002, and 2001, 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 revenue were $6,888, $5,255, and
     $9,634 for the years ended December 31, 2003, 2002, and 2001, respectively.

(8)  Commitments and Contingencies

     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 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 it 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.  It is unknown if any further  appeals will be taken in this
     matter.

     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.

(9)  Risks and Uncertainties

     CPD  sells  100% of the  electrical  energy  generated  to  Edison  under a
     long-term  PPC,  and  is   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  regulation,  (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)(b)      June 30(a)(c)     September 30(a)     December 31(a)
                                           --------------      -------------     ---------------     --------------
<S>                                        <C>                 <C>               <C>                 <C>
Caithness Coso Funding Corp:

        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                       $      --                --                --                  --

        2001
        Total revenues                     $    8,601             5,997             7,105               7,117
        Operating income                          --                --                --                  --
          Net income                       $      --                --                --                  --


Coso Finance Partners:

        2003
        Total revenues                     $   12,553            15,323            19,833              12,083
        Operating income (loss)                 5,043             6,351             9,840               4,883
          Net income (loss)                $      760             3,836             7,400               3,708

        2002
        Total revenues                     $   45,498            14,328            19,761              12,478
        Operating income                       38,443             6,107             8,139               6,000
          Net income (loss)                $   36,063             4,300             5,528               3,221

        2001
        Total revenues                     $    6,188            24,835            16,833               8,472
        Operating income                       (1,843)           16,498             5,126               7,365
          Net income (loss)                $   (4,957)           13,397             2,100               4,169


Coso Energy Developers:

        2003
        Total revenues                     $    9,334           11,610             16,222               9,703
        Operating income (loss)                 4,231            5,576              9,091               3,151
          Net income (loss)                $    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 (loss)                $   35,203            1,725              5,961               2,470

        2001
        Total revenues                     $    1,445           23,529             15,095               7,738
        Operating income                       (7,730)          15,595              7,735                 811
          Net income (loss)                $  (10,066)          13,264              5,431              (1,616)


Coso Power Developers:

        2003
        Total revenues                     $    8,512           10,825             16,513              10,299
        Operating income (loss)                 1,917            4,137              8,930               3,755
          Net income (loss)                $   (1,634)           2,330              7,174               2,018

        2002
        Total revenues                     $   44,422            9,771             15,838               9,561
        Operating income                       37,565            1,730              8,484               2,385
          Net income (loss)                $   36,085              (60)             6,796                 482

        2001
        Total revenues                     $   (2,196)          20,133             13,934               7,401
        Operating income                      (11,636)          11,246              5,388                (134)
          Net income                       $  (13,903)           8,991              3,193              (2,664)

</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.

(b)  The provision  for doubtful  accounts  previously  recorded for the quarter
     ended March 31, 2001 for Coso Finance Partners, Coso Energy Developers, and
     Coso Power Developers of $25,817,  $25,950 and $26,998,  respectively,  has
     been  reclassified  as a  reduction  of revenue  to  conform  with the 2001
     financial statements presentation.

(c)  The income  from the  reduction  in the  provision  for  doubtful  accounts
     previously  recorded  for the quarter  ended June 30, 2001 for Coso Finance
     Partners,  Coso  Energy  Developers,  and Coso Power  Developers  of $4,204
     $4,120  and  $4,265,  respectively,  has been  reclassified  to  revenue to
     conform with the 2001 financial statements presentation.


Supplemental 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
partnerships financial statements and their accompanying notes.




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

                                          UNAUDITED CONDENSED COMBINED BALANCE SHEETS

                                                    (Dollars in thousands)



                                                                              December 31,       December 31,
                                                                                  2003               2002
<S>                                                                            <C>               <C>
              Assets:

Cash and cash equivalents........................                            $   2,110             6,462
Restricted cash and investments..................                               43,093            46,193
Accounts receivable, net.........................                               21,740            21,346
Prepaid expenses and other assets................                                2,796             3,549
Amounts due from related parties.................                                6,590             6,516
Property, plant and equipment, net...............                              380,136           388,358
Power purchase agreement, net....................                               42,323            47,336
Investments and Advances.........................                               12,294            12,508
Deferred financing costs, net....................                                4,725             5,512
                                                                               -------           -------

          Total assets...........................                            $ 515,807         $ 537,780
                                                                               =======           =======


              Liabilities and Partners' Capital:

Accounts payable and accrued liabilities........                             $   8,505         $  10,486
Amounts due to related parties..................                                27,397            25,415
Other liabilities...............................                                19,714            13,276
Project loans...................................                               253,614           281,231
                                                                               -------           -------

          Total liabilities......................                              309,230           330,408


Partners' capital................................                              206,577           207,372
                                                                               -------           -------

          Total liabilities and partners' capital                            $ 515,807         $ 537,780
                                                                               =======           =======





                  See accompanying notes to the unaudited condensed combined financial statements.



</TABLE>

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

                                    UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS

                                                   (Dollars in thousands)


                                                                Twelve Months        Twelve Months       Twelve Months
                                                                    Ended                Ended              Ended
                                                                 December 31,        December 31,        December 31,
                                                                     2003                2002                2001
                                                                 ------------        ------------        ------------
<S>                                                             <C>                  <C>                 <C>
Revenue:
  Energy revenues............................                    $ 110,587            $ 205,151           $  94,734
  Capacity and bonus revenues................                       42,223               47,758              39,096
                                                                   -------              -------             -------

       Total revenue.........................                      152,810              252,909             133,830
                                                                   -------              -------             -------
Operating expenses:
  Plant operating expenses...................                       32,450               31,884              28,910
  Royalty expense............................                       23,379               22,311              24,530
  Depreciation and amortization..............                       30,076               37,135              41,546
                                                                    ------               ------              ------

       Total operating expenses..............                       85,905               91,330              94,986
                                                                    ------              -------              ------

       Operating income......................                       66,905              161,579              38,844
                                                                    ------              -------              ------

Other expenses:
  Interest and other income..................                       (3,191)              (3,923)             (9,577)
  Interest expense on project loan...........                       24,826               26,941              28,818
  Non cash interest expense..................                        1,316                  787               2,264
                                                                    ------               ------              ------

       Total other expenses..................                       22,951               23,805              21,505
                                                                    ------               ------              ------

    Income before cumulative effect of change
       in accounting principle...............                       43,954              137,774              17,339

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


       Net income............................                    $  39,473            $ 137,774           $  17,339
                                                                    ======              =======              ======





                       See accompanying notes to the unaudited condensed combined financial statements.




</TABLE>
                                                               F-26

<PAGE>
<TABLE>
<CAPTION>
                                                         COSO PARTNERSHIPS

                                       UNAUDITED CONDENSED COMBINED STATEMENTS OF CASH FLOWS

                                                      (Dollars in thousands)


                                                              Twelve Months      Twelve Months        Twelve Months
                                                                  Ended              Ended               Ended
                                                               December 31,       December 31,         December 31,
                                                                   2003               2002                 2001
<S>                                                            <C>                <C>                  <C>

Net cash provided by (used in) operating activities...         $   76,220         $  144,495           $   60,338
Net cash provided by (used in) investing activities...            (12,687)           (18,719)               3,355
Net cash provided by (used in) financing activities...            (67,885)          (119,578)             (80,538)
                                                                 ---------          ---------             --------

Net change in cash and cash equivalents...............         $   (4,352)        $    6,198           $  (16,845)
                                                                 =========          =========             ========
Supplemental cash flow disclosure:

            Cash paid for interest....................         $   24,950         $   27,026           $   28,881



                  See accompanying notes to the unaudited condensed combined financial statements.



</TABLE>

                                                         F-27
<PAGE>

                                COSO PARTNERSHIPS
                    NOTES TO THE UNAUDITED 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.

                                    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, 2003:
<TABLE>
<CAPTION>
        Name                          Age                      Position(s)
        ----                          ---                      -----------
<S>                                    <C>           <C>
James D. Bishop, Sr.                   70            Director, Chairman and Chief Executive Officer

Leslie J. Gelber                       47            Director, President and Chief Operating Officer

James D. Bishop, Jr.                   43            Director, Vice Chairman

Christopher T. McCallion               42            Director, Executive Vice President and Chief Financial
                                                     Officer

Kenneth P. Hoffman                     51            Senior Vice President

Larry K. Carpenter                     54            Executive Vice President


                                18


Mark A. Ferrucci                       51            Director

David V. Casale                        40            Vice President and Controller

John A. McNamara                       44            Vice President Finance

Barbara Bishop Gollan                  45            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.

     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.

     Larry K.  Carpenter,  Executive  Vice  President  of Funding  Corp.  and of
Caithness  Energy,  has  served as an  Executive  Vice  President  of  Caithness
Equities  Corporation  since January 1999. Prior to joining  Caithness  Equities
Corporation,  Mr.  Carpenter  served as Vice  President  of  Development  at ESI
Energy,  Inc., the  non-regulated  independent  power company owned by FPL Group
Inc.,  from 1985 to December  1998.  Mr.  Carpenter  holds a Bachelor of Science
degree in Electrical Engineering from the University of Florida.

                                       19

     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,  a Vice  President and the Controller of Funding Corp. and
of Caithness Energy joined Caithness  Equities  Corporation in December 1991 and
has served as a 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 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,  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,  a 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.


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, 2003 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 us 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

                                       20

(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

 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                 13.9%                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%.

                                       21

(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.
(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.

                                       22


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  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, Carpenter
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 five individuals,  together with Mr. Ferrucci,  serve as
the CAC board of directors.


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.

                                       23

     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,  2003,  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>
 James D. Bishop, Jr.               43        Navy I partnership, BLM partnership, Navy II partnership

 Christopher T. McCallion           42        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,
2003, 2002,  2001, and 2000, the total amount of management  committee fees paid
or payable by each of the Coso partnerships to its partners:
<TABLE>
<CAPTION>
                                                              Year Ended December 31
                                                              ----------------------
 <S>                                      <C>              <C>              <C>              <C>
                                              2003             2002             2001             2000
                                              ----             ----             ----             ----

 Navy I Partnership
    ESCA........................          $ 243,000        $ 241,000        $ 237,000        $ 234,000
                                            =======          =======          =======          =======

 BLM Partnership
    CCH.........................          $ 243,000        $ 241,000        $ 237,000        $ 234,000
                                            =======          =======          =======          =======

 Navy II Partnership
    Navy II Group...............          $ 243,000        $ 241,000        $ 237,000        $ 234,000
                                            =======          =======          =======          =======
</TABLE>
     The Coso  partnerships  no longer pay  management  committee  fees to their
managing partners.


Funding Corp.

     As of December 31, 2003,  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 Corporation, who
beneficially owns the majority of membership interests of Caithness Energy.


                                     Part IV

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


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

(b)       Current reports on Form 8-K:

          None.

(c)       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.*

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.*

                                       25

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.*

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.*

                                       26

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.*

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.*

                                       27

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.*

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).*

                                       28

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.*

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.*

                                       29

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).*

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.*

                                       30

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.*

27.1      Financial Data Schedule--Form SX--Caithness Coso Funding Corp.

27.2      Financial Data Schedule--Form SX--Coso Finance Partners.

27.3      Financial Data Schedule--Form SX--Coso Energy Developers.

27.4      Financial Data Schedule--Form SX--Coso Power Developers.

99.1      Certification of Chief Executive Officer.

99.2      Certification of Chief Financial Officer.

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.**

                                       31

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.**

 *        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.

                                       32
<PAGE>
                                  EXHIBIT 27.1

                                    Form S-X
                       Commercial and Industrial Companies


Financial Data Schedule Worksheet for:      CAITHNESS COSO FUNDING CORP.
                                            ----------------------------
Review the following  list of tags for Article 5 and fill in the correct data in
the  column(s)  provided.  Generally,  only one  column of  information  will be
required,  however,  two columns are provided if required in the Financial  Data
Schedule.

Unless otherwise  noted, all tags are required.  A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated.  Values not provided will be entered as "0" (zero).  Missing dates
will be entered as "TO COME".  Please be sure to verify all  information  in the
EDGARized exhibit.

To  include  a  footnote,  place a number in  parentheses  next to the value and
provide  the text of each  corresponding  footnote  at the end of the  worksheet
form.

Do you wish to include a LEGEND?       This schedule  contains summary financial
  Yes  X No                            information extracted from *_____________
---   ---                              and is equalified in its entirety by
                                       reference to such financial statements.
                                       *Identify the financial statement(s) to
                                       be referenced in the legend:


RESTATED

Are your financials being "restated"          (NO VALUE REQUIRED)
from a previously file period?
                      Yes  X No
                   ---    ---
CIK                                       Use this section only for coregistrant
Does this data apply to a coregistrant    filings.
                      Yes  X No
                   ---    ---             COREGISTRANT CIK:

NAME                                      Use this section only for coregistrant
Does this data apply to a coregistrant    filings.
                      Yes  X No
                   ---    ---             COREGISTRANT NAME:

MULTIPLIER
Do the financials require a multiplier        X 1,000       1,000,000,000
                                             ---         ----
other than 1 (one)?
                    X Yes    No                 1,000,000    1,000,000,000,000
                   ---    ---                ---         ----

CURRENCY                                       CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
                      Yes  X No
                   ---    ---
PERIOD TYPE                                     - MOS          - MOS
                                         -- ----         -- ----
                                               X YEAR        X  YEAR
                                              ---           ---
                                            (for annual report filings)
                                              OTHER           OTHER
                                          ----           ----
FISCAL YEAR END
(example: DEC-31-1997)                      Dec - 31 - 2002      DEC - 31 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

PERIOD START
(example: JAN-01-1997)                      Jan - 01 - 2002      JAN - 01 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

PERIOD END
(example: SEP-30-1997)                      Dec - 31 - 2002      DEC - 31 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

EXCHANGE RATE                               EXCHANGE RATE:       EXCHANGE RATE:

Is the exchange rate other than 1
(one)? Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
                      Yes  X No
                   ---    ---
<PAGE>

<TABLE>
<CAPTION>
                                         PERIOD TYPE Year            PERIOD TYPE Year
                                                     ----                        ----
<S>                                                     <C>                       <C>
CASH                                                         0                           0
SECURITIES                                                   0                           0
RECEIVABLES                                            282,361                     254,622
ALLOWANCES                                                   0                           0
INVENTORY                                                    0                           0
CURRENT ASSETDS                                          1,130                       1,008
PP&E                                                         0                           0
DEPRECIATION                                                 0                           0
TOTAL ASSETS                                           282,361                     254,622
CURRENT LIABILITIES                                      1,130                       1,008
BONDS                                                  281,231                     253,614
PREFERRED MANDATORY                                          0                           0
PREFERRED                                                    0                           0
COMMON                                                       0                           0
OTHER SE                                                     0                           0
TOTAL LIABILITY AND EQUITY                             282,361                     254,622
SALES                                                        0                           0
TOTAL REVENUES                                          26,931                      24,828
CGS                                                          0                           0
TOTAL COSTS                                                  0                           0
OTHER EXPENSES                                               0                           0
LOSS PROVISION                                               0                           0
INTEREST EXPENSES                                       26,931                      24,828
INCOME PRETAX                                                0                           0
INCOME TAX                                                   0                           0
INCOME CONTINUING                                            0                           0
DISCONTINUED                                                 0                           0
EXTRAORDINARY                                                0                           0
CHANGES                                                      0                           0
NET INCOME                                                   0                           0
EPS BASIC                                                    0                           0
(Value may contain up to 3 decimal places)
EPS DILUTED                                                  0                           0
(Value may contain up to 3 decimal places)

                    Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
</TABLE>


<PAGE>
                                  EXHIBIT 27.2

                                    Form S-X
                       Commercial and Industrial Companies


Financial Data Schedule Worksheet for:      COSO FINANCE PARTNERS
                                            ---------------------
Review the following  list of tags for Article 5 and fill in the correct data in
the  column(s)  provided.  Generally,  only one  column of  information  will be
required,  however,  two columns are provided if required in the Financial  Data
Schedule.

Unless otherwise  noted, all tags are required.  A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated.  Values not provided will be entered as "0" (zero).  Missing dates
will be entered as "TO COME".  Please be sure to verify all  information  in the
EDGARized exhibit.

To  include  a  footnote,  place a number in  parentheses  next to the value and
provide  the text of each  corresponding  footnote  at the end of the  worksheet
form.

Do you wish to include a LEGEND?       This schedule  contains summary financial
  Yes  X No                            information extracted from *_____________
---   ---                              and is equalified in its entirety by
                                       reference to such financial statements.
                                       *Identify the financial statement(s) to
                                       be referenced in the legend:


RESTATED

Are your financials being "restated"          (NO VALUE REQUIRED)
from a previously file period?
                      Yes  X No
                   ---    ---
CIK                                       Use this section only for coregistrant
Does this data apply to a coregistrant    filings.
                      Yes  X No
                   ---    ---             COREGISTRANT CIK:

NAME                                      Use this section only for coregistrant
Does this data apply to a coregistrant    filings.
                      Yes  X No
                   ---    ---             COREGISTRANT NAME:

MULTIPLIER
Do the financials require a multiplier        X 1,000        1,000,000,000
                                             ---         ----
other than 1 (one)?
                    X Yes    No                 1,000,000    1,000,000,000,000
                   ---    ---                ---         ----

CURRENCY                                       CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
                      Yes  X No
                   ---    ---
PERIOD TYPE                                     - MOS          - MOS
                                         -- ----         -- ----
                                               X YEAR        X  YEAR
                                              ---           ---
                                            (for annual report filings)
                                              OTHER           OTHER
                                          ----           ----
FISCAL YEAR END
(example: DEC-31-1997)                      Dec - 31 - 2002      DEC - 31 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

PERIOD START
(example: JAN-01-1997)                      Jan - 01 - 2002      JAN - 01 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

PERIOD END
(example: SEP-30-1997)                      Dec - 31 - 2002      DEC - 31 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

EXCHANGE RATE                               EXCHANGE RATE:       EXCHANGE RATE:

Is the exchange rate other than 1
(one)? Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
                      Yes  X No
                   ---    ---
<PAGE>

<TABLE>
<CAPTION>
                                         PERIOD TYPE Year            PERIOD TYPE Year
                                                     ----                        ----
<S>                                                     <C>                        <C>
CASH                                                     4,215                       1,429
SECURITIES                                              28,692                      24,657
RECEIVABLES                                              8,621                       8,427
ALLOWANCES                                                   0                         216
INVENTORY                                                    0                           0
CURRENT ASSETS                                          13,904                      10,512
PP&E                                                   234,442                     242,616
DEPRECIATION                                            98,129                     107,838
TOTAL ASSETS                                           195,072                     184,800
CURRENT LIABILITIES                                      6,231                       4,974
BONDS                                                  110,955                      97,547
PREFERRED MANDATORY                                          0                           0
PREFERRED                                                    0                           0
COMMON                                                       0                           0
OTHER SE                                                     0                           0
TOTAL LIABILITY AND EQUITY                             195,072                     184,800
SALES                                                   92,065                      59,792
TOTAL REVENUES                                          93,639                      61,416
CGS                                                          0                           0
TOTAL COSTS                                                  0                           0
OTHER EXPENSES                                          33,376                      33,675
LOSS PROVISION                                               0                           0
INTEREST EXPENSES                                       11,151                      10,257
INCOME PRETAX                                                0                           0
INCOME TAX                                                   0                           0
INCOME CONTINUING                                            0                           0
DISCONTINUED                                                 0                           0
EXTRAORDINARY                                                0                           0
CHANGES                                                      0                       1,780
NET INCOME                                              49,112                      15,704
EPS BASIC                                                    0                           0
(Value may contain up to 3 decimal places)
EPS DILUTED                                                  0                           0
(Value may contain up to 3 decimal places)

                    Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
</TABLE>


<PAGE>

                                  EXHIBIT 27.3

                                    Form S-X
                       Commercial and Industrial Companies

Financial Data Schedule Worksheet for:      COSO ENERGY DEVELOPERS
                                            ----------------------
Review the following  list of tags for Article 5 and fill in the correct data in
the  column(s)  provided.  Generally,  only one  column of  information  will be
required,  however,  two columns are provided if required in the Financial  Data
Schedule.

Unless otherwise  noted, all tags are required.  A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated.  Values not provided will be entered as "0" (zero).  Missing dates
will be entered as "TO COME".  Please be sure to verify all  information  in the
EDGARized exhibit.

To  include  a  footnote,  place a number in  parentheses  next to the value and
provide  the text of each  corresponding  footnote  at the end of the  worksheet
form.

Do you wish to include a LEGEND?       This schedule  contains summary financial
  Yes  X No                            information extracted from *_____________
---   ---                              and is equalified in its entirety by
                                       reference to such financial statements.
                                       *Identify the financial statement(s) to
                                       be referenced in the legend:


RESTATED

Are your financials being "restated"          (NO VALUE REQUIRED)
from a previously file period?
                      Yes  X No
                   ---    ---
CIK                                       Use this section only for coregistrant
Does this data apply to a coregistrant    filings.
                      Yes  X No
                   ---    ---             COREGISTRANT CIK:

NAME                                      Use this section only for coregistrant
Does this data apply to a coregistrant    filings.
                      Yes  X No
                   ---    ---             COREGISTRANT NAME:

MULTIPLIER
Do the financials require a multiplier        X 1,000        1,000,000,000
                                             ---         ----
other than 1 (one)?
                    X Yes    No                 1,000,000    1,000,000,000,000
                   ---    ---                ---         ----

CURRENCY                                       CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
                      Yes  X No
                   ---    ---
PERIOD TYPE                                     - MOS          - MOS
                                         -- ----         -- ----
                                               X YEAR        X  YEAR
                                              ---           ---
                                            (for annual report filings)
                                              OTHER           OTHER
                                          ----           ----
FISCAL YEAR END
(example: DEC-31-1997)                      Dec - 31 - 2002      DEC - 31 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

PERIOD START
(example: JAN-01-1997)                      Jan - 01 - 2002      JAN - 01 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

PERIOD END
(example: SEP-30-1997)                      Dec - 31 - 2002      DEC - 31 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

EXCHANGE RATE                               EXCHANGE RATE:       EXCHANGE RATE:

Is the exchange rate other than 1
(one)? Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
                      Yes  X No
                   ---    ---
<PAGE>

<TABLE>
<CAPTION>
                                         PERIOD TYPE Year            PERIOD TYPE Year
                                                     ----                        ----
<S>                                                     <C>                         <C>
CASH                                                     1,423                         603
SECURITIES                                               6,646                      10,155
RECEIVABLES                                              7,102                       7,272
ALLOWANCES                                                   0                           0
INVENTORY                                                    0                           0
CURRENT ASSETS                                           9,895                       8,969
PP&E                                                   247,912                     250,930
DEPRECIATION                                           112,059                     120,411
TOTAL ASSETS                                           174,871                     170,556
CURRENT LIABILITIES                                     27,961                      29,396
BONDS                                                   89,875                      84,821
PREFERRED MANDATORY                                          0                           0
PREFERRED                                                    0                           0
COMMON                                                       0                           0
OTHER SE                                                     0                           0
TOTAL LIABILITY AND EQUITY                             174,871                     170,556
SALES                                                   81,252                      46,869
TOTAL REVENUES                                          82,707                      48,010
CGS                                                          0                           0
TOTAL COSTS                                                  0                           0
OTHER EXPENSES                                          28,526                      24,820
LOSS PROVISION                                               0                           0
INTEREST EXPENSES                                        8,822                       8,385
INCOME PRETAX                                                0                           0
INCOME TAX                                                   0                           0
INCOME CONTINUING                                            0                           0
DISCONTINUED                                                 0                           0
EXTRAORDINARY                                                0                           0
CHANGES                                                      0                         924
NET INCOME                                              43,359                      13,881
EPS BASIC                                                    0                           0
(Value may contain up to 3 decimal places)
EPS DILUTED                                                  0                           0
(Value may contain up to 3 decimal places)

                    Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
</TABLE>

<PAGE>
                                  EXHIBIT 27.4

                                    Form S-X
                       Commercial and Industrial Companies

Financial Data Schedule Worksheet for:      COSO POWER DEVELOPERS
                                            ---------------------
Review the following  list of tags for Article 5 and fill in the correct data in
the  column(s)  provided.  Generally,  only one  column of  information  will be
required,  however,  two columns are provided if required in the Financial  Data
Schedule.

Unless otherwise  noted, all tags are required.  A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated.  Values not provided will be entered as "0" (zero).  Missing dates
will be entered as "TO COME".  Please be sure to verify all  information  in the
EDGARized exhibit.

To  include  a  footnote,  place a number in  parentheses  next to the value and
provide  the text of each  corresponding  footnote  at the end of the  worksheet
form.

Do you wish to include a LEGEND?       This schedule  contains summary financial
  Yes  X No                            information extracted from *_____________
---   ---                              and is equalified in its entirety by
                                       reference to such financial statements.
                                       *Identify the financial statement(s) to
                                       be referenced in the legend:


RESTATED

Are your financials being "restated"          (NO VALUE REQUIRED)
from a previously file period?
                      Yes  X No
                   ---    ---
CIK                                       Use this section only for coregistrant
Does this data apply to a coregistrant    filings.
                      Yes  X No
                   ---    ---             COREGISTRANT CIK:

NAME                                      Use this section only for coregistrant
Does this data apply to a coregistrant    filings.
                      Yes  X No
                   ---    ---             COREGISTRANT NAME:

MULTIPLIER
Do the financials require a multiplier        X 1,000        1,000,000,000
                                             ---         ----
other than 1 (one)?
                    X Yes    No                 1,000,000    1,000,000,000,000
                   ---    ---                ---         ----

CURRENCY                                       CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
                      Yes  X No
                   ---    ---
PERIOD TYPE                                     - MOS          - MOS
                                         -- ----         -- ----
                                               X YEAR        X  YEAR
                                              ---           ---
                                            (for annual report filings)
                                              OTHER           OTHER
                                          ----           ----
FISCAL YEAR END
(example: DEC-31-1997)                      Dec - 31 - 2002      DEC - 31 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

PERIOD START
(example: JAN-01-1997)                      Jan - 01 - 2002      JAN - 01 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

PERIOD END
(example: SEP-30-1997)                      Dec - 31 - 2002      DEC - 31 - 2003
                                            ---------------      ---------------
                                            mmm - dd - yyyy      mmm - dd - yyyy

EXCHANGE RATE                               EXCHANGE RATE:       EXCHANGE RATE:

Is the exchange rate other than 1
(one)? Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
                      Yes  X No
                   ---    ---
<PAGE>

<TABLE>
<CAPTION>
                                         PERIOD TYPE Year            PERIOD TYPE Year
                                                     ----                        ----
<S>                                                     <C>                         <C>
CASH                                                       824                          78
SECURITIES                                              10,855                       8,281
RECEIVABLES                                             13,136                      14,479
ALLOWANCES                                                   0                          82
INVENTORY                                                    0                           0
CURRENT ASSETS                                          15,071                      15,305
PP&E                                                   210,548                     216,782
DEPRECIATION                                            94,356                     101,943
TOTAL ASSETS                                           168,834                     162,001
CURRENT LIABILITIES                                      2,706                       3,082
BONDS                                                   80,401                      71,246
PREFERRED MANDATORY                                          0                           0
PREFERRED                                                    0                           0
COMMON                                                       0                           0
OTHER SE                                                     0                           0
TOTAL LIABILITY AND EQUITY                             168,834                     162,001
SALES                                                   79,592                      46,149
TOTAL REVENUES                                          80,486                      46,575
CGS                                                          0                           0
TOTAL COSTS                                                  0                           0
OTHER EXPENSES                                          29,428                      27,410
LOSS PROVISION                                               0                           0
INTEREST EXPENSES                                        7,755                       7,500
INCOME PRETAX                                                0                           0
INCOME TAX                                                   0                           0
INCOME CONTINUING                                            0                           0
DISCONTINUED                                                 0                           0
EXTRAORDINARY                                                0                           0
CHANGES                                                      0                       1,777
NET INCOME                                              43,303                       9,888
EPS BASIC                                                    0                           0
(Value may contain up to 3 decimal places)
EPS DILUTED                                                  0                           0
(Value may contain up to 3 decimal places)

                    Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
</TABLE>

<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.  (the
Company)  on Form 10-K for the year ended  December  31,  2003 as filed with the
Securities and Exchange  Commission on the date hereof (the "Report"),  I, James
D. Bishop, Sr., Chief Executive Officer of the Company,  certify, 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
Company.



Date: March 25, 2004                    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 EXECUTIVE OFFICER

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

1.   I have reviewed  this annual report on Form 10-K of Caithness  Coso Funding
     Corp.;

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 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;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

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 the 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 25, 2004                   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.  (the
Company)  on Form 10-K for the year ended  December  31,  2003 as filed with the
Securities  and  Exchange  Commission  on the date  hereof  (the  "Report"),  I,
Christopher  T.  McCallion,  Chief  Financial  Officer of the Company,  certify,
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
Company.



Date: March 25, 2004                    Caithness Coso Funding Corp.
                                        a Delware Corporation

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


                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Christopher T. McCallion, certify that:

1.   I have reviewed  this annual report on Form 10-K of Caithness  Coso Funding
     Corp.;

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 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;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

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 the 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 25, 2004                   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 25, 2004


                                       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 25, 2004


                                       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 25, 2004


                                       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 25, 2004
<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 25, 2004


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

                                    Date:  March 25, 2004


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

                                    Date:  March 25, 2004


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

                                    Date:  March 25, 2004


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

                                    Date:  March 25, 2004