SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                      For the quarter ended March 31, 2001
                          Commission File No. 333-89521

                               CE Generation, LLC.
             (Exact name of registrant as specified in its charter)

     Delaware                                                  47-0818523
 -----------------                                         ------------------
 (State or other jurisdiction of                            (I.R.S. Employer
 Incorporation or organization)                            Identification No.)

 302 South 36th Street, Suite 400 Omaha, NE                    68131
 ------------------------------------------                  ----------
 (Address of principal executive offices)                    (Zip Code)

       Registrant's telephone number, including area code: (402) 341-4500
                                                           --------------

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

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

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

                                          Yes   X    No
                                              -----

     The members  equity  accounts are held 50% by MidAmerican  Energy  Holdings
Company and 50% by El Paso Merchant Energy Holding Company as of May 14, 2001.



<PAGE>


                                TABLE OF CONTENTS


Part I ...................................................................  2
  Financial Statements....................................................  2
  Management's Discussions and Analysis of
    Financial Condition and Results of Operations.........................  8

Part II................................................................... 15
  Item 1.  Legal Proceedings.............................................. 15
  Item 2.  Changes in Securities and Use of Proceeds...................... 15
  Item 3.  Defaults on Senior Securities ................................. 15
  Item 4.  Submission of Matters to a Vote of Security Holders............ 15
  Item 5.  Other Information ............................................. 15
  Item 6.  Exhibits and reports on Form 8-K............................... 15

Signatures................................................................ 16

Exhibit Index............................................................. 17


<PAGE>


                         INDEPENDENT ACCOUNTANTS' REPORT




Board of Directors
CE Generation, LLC

     We  have  reviewed  the  accompanying  consolidated  balance  sheet  of  CE
Generation,  LLC and subsidiaries  (the "Company") as of March 31, 2001, and the
related  consolidated  statements  of  operations  and cash  flows for the three
months  ended  March  31,  2001 and 2000.  These  financial  statements  are the
responsibility of the Company's management.

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

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

     We have previously audited, in accordance with auditing standards generally
accepted in the United States of America,  the consolidated  balance sheet of CE
Generation,  LLC  as of  December  31,  2000,  and  the  related  statements  of
operations,  members'  equity  and cash  flows  for the  year  then  ended  (not
presented  herein);  and in our report dated January 18, 2001 (March 27, 2001 as
to Note 9 A) we expressed an unqualified opinion on those consolidated financial
statements.  In our  opinion,  the  information  set  forth in the  accompanying
consolidated  balance  sheet as of December  31, 2000 is fairly  stated,  in all
material respects,  in relation to the consolidated  balance sheet from which it
has been derived.




DELOITTE & TOUCHE LLP
Omaha, Nebraska
May 7, 2001



<PAGE>


                       CE GENERATION, LLC AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>

                                                          March 31,     December 31,
                                                            2001            2000
                                                         -----------    -----------
                                                         (unaudited)
<S>                                                      <C>            <C>
ASSETS
Cash and cash equivalents ............................   $    47,099    $    36,152
Restricted cash ......................................        14,357         14,794
Accounts receivable, net of allowance of $43,817
 and $0, respectively ................................       136,605         89,883
Prepaid expenses .....................................         2,195         19,981
Inventory ............................................        22,615         27,424
Deferred income taxes ................................         2,878          2,878
                                                         -----------    -----------
Total current assets .................................       225,749        191,112

Restricted cash ......................................        10,969          9,618
Properties, plants, contracts and equipment, net .....     1,334,247      1,355,345
Excess of cost over fair value of net assets
  acquired, net ......................................       273,897        276,294
Note receivable from related party ...................       140,528        140,528
Deferred financing charges and other assets ..........        13,151         14,426
                                                         -----------    -----------
Total assets .........................................   $ 1,998,541    $ 1,987,323
                                                         ===========    ===========

LIABILITIES AND EQUITY
Liabilities:
Accounts payable .....................................   $    15,314    $       140
Accrued interest .....................................        18,707          4,049
Accrued income taxes .................................        24,572          4,175
Other accrued liabilities ............................        53,372         64,511
Due to affiliates ....................................           430          2,578
Current portion of long term debt ....................        67,473         67,473
                                                         -----------    -----------
Total current liabilities ............................       179,868        142,926

Project loan .........................................       191,202        199,006
Salton Sea notes and bonds ...........................       520,250        520,250
Senior secured bonds .................................       377,000        377,000
Deferred income taxes ................................       224,722        240,762
                                                         -----------    -----------
Total liabilities ....................................     1,493,042      1,479,944

Minority interest ....................................        68,703         68,464

Commitments and contingencies (Note 2)

Members' equity ......................................       443,703        438,915
Accumulated other comprehensive income ...............        (6,907)             -
                                                         -----------    -----------

Total liabilities and equity .........................   $ 1,998,541    $ 1,987,323
                                                         ===========    ===========
</TABLE>


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

                                      -2-
<PAGE>

                       CE GENERATION, LLC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             (AMOUNTS IN THOUSANDS)
                                   (UNAUDITED)


                                                          Three Months Ended
                                                              March 31,
                                                        ---------------------
                                                          2001         2000
                                                        --------     --------
Revenue:

Sales of electricity and steam ......................   $ 147,986    $ 91,977

Interest and other income ...........................       1,701       2,493
                                                        ---------    --------

Total revenues ......................................     149,687      94,470



Cost and Expenses:

Fuel ................................................      36,688      28,249

Plant operations ....................................      33,816      20,347

Depreciation and amortization .......................      20,650      19,375

Interest expense ....................................      20,987      22,395

Less interest capitalized ...........................          --      (2,351)
                                                        ---------    --------

Total expenses ......................................     112,141      88,015
                                                        ---------    --------



Income before provision for income taxes ............      37,546       6,455

Provision for income taxes ..........................      12,475         388
                                                        ---------    --------

Income before minority interest and cumulative effect
of accounting change ................................      25,071       6,067

Minority interest ...................................       4,897       4,101
                                                        ---------    --------

Income before cumulative effect of accounting change       20,174       1,966

Cumulative effect of accounting change, net of tax ..     (15,386)          -
                                                        ---------    --------

Net income ..........................................   $   4,788    $  1,966
                                                        =========    ========


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

                                      -3-

<PAGE>

                       CE GENERATION, LLC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (AMOUNTS IN THOUSANDS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                       Three Months Ended
                                                                          March 31,
                                                                     --------------------
                                                                       2001        2000
                                                                     --------    --------
<S>                                                                  <C>         <C>
Cash flows from operating activities:
Net income .......................................................   $  4,788    $  1,966
Adjustments to reconcile to cash flows from operating activities:
Depreciation and amortization ....................................     20,650      19,375
Cumulative effect of change in accounting principle, net of tax ..     15,386           -
Provision for deferred income taxes ..............................     (1,508)         98
Distributions to minority interest less than (in excess) of income        239      (1,615)
Changes in other items:
Accounts receivable ..............................................    (46,722)     16,353
Due from affiliates ..............................................     (2,148)     (2,268)
Accounts payable and other accrued liabilities ...................     30,059      15,302
Other assets .....................................................      2,900     (10,180)
                                                                     --------    --------

Net cash flows from operating activities .........................     23,644      39,031

Cash flows from investing activities:
Capital expenditures .............................................     (3,979)    (20,823)
Consolidation of equity investment's cash ........................          -       2,559
Decrease/(Increase) in restricted cash ...........................     (1,351)     11,718
                                                                     --------    --------

Net cash flows from investing activities .........................     (5,330)     (6,546)

Cash flows from financing activities:
Repayment of project loans .......................................     (7,804)     (6,784)
Decrease in restricted cash ......................................        437         606
                                                                     --------    --------

Net cash flows from financing activities .........................     (7,367)     (6,178)
                                                                     --------    --------

Net increase in cash and cash equivalents ........................     10,947      26,307
Cash and cash equivalents at beginning of period .................     36,152      29,120
                                                                     --------    --------

Cash and cash equivalents at end of period .......................   $ 47,099    $ 55,427
                                                                     ========    ========
Supplemental disclosure:
Interest paid ....................................................   $  5,146    $  6,079
                                                                     ========    ========
Income taxes paid ................................................   $  6,966    $     46
                                                                     ========    ========
</TABLE>

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

                                      -4-
<PAGE>

                       CE GENERATION, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  GENERAL:

     In the opinion of the  management of CE Generation,  LLC ("CE  Generation")
the  accompanying   unaudited  consolidated  financial  statements  contain  all
adjustments  (consisting only of normal recurring accruals) necessary to present
fairly the financial position as of March 31, 2001 and the results of operations
and cash flows for the three months  ended March 31, 2001 and 2000.  The results
of  operations  for the  three  months  ended  March  31,  2001 and 2000 are not
necessarily indicative of the results to be expected for the full year.

     The  unaudited   consolidated   financial   statements  shall  be  read  in
conjunction  with the  financial  statements  included in CE  Generation  annual
report on Form 10-K for the year ended December 31, 2000.

2.  COMMITMENTS AND CONTINGENCIES

A.  SOUTHERN CALIFORNIA EDISON

     Southern California Edison ("Edison"),  a wholly-owned subsidiary of Edison
International,  is a  public  utility  primarily  engaged  in  the  business  of
supplying   electric  energy  to  retail   customers  in  Central  and  Southern
California,  excluding Los Angeles.  CE Generation is aware that there have been
public  announcements  that Edison's  financial  condition has deteriorated as a
result of  reduced  liquidity.  Based on  public  announcements,  CE  Generation
understands  that  Edison  has not made  certain  payments  to other  qualifying
facilities  ("QFs") from which Edison purchases power and has not made scheduled
payments  of debt  service.  Edison's  senior  unsecured  debt  obligations  are
currently rated Caa2 (on watch for possible downgrade) by Moody's and D by S&P.

     Edison has failed to pay  approximately  $119  million  due under the Power
Purchase  Agreements  for power  delivered  in November  and  December  2000 and
January, February and March 2001, although the Power Purchase Agreements provide
for billing and payment on a schedule  where  payments  would have normally been
received in early January,  February,  March, April and May 2001. Edison has not
notified  the  Imperial  Valley  Projects  as to when they can expect to receive
these payments.

     On February 21, 2001, the Imperial  Valley Projects  (excluding  Salton Sea
Unit 5 and CE Turbo) filed a lawsuit  against  Edison in  California's  Imperial
County  Superior  Court  seeking  a court  order  requiring  Edison  to make the
required  payments  under  the  Power  Purchase  Agreements.  The  lawsuit  also
requested,  among other things,  that the court order permit the Imperial Valley
Projects  to suspend  deliveries  of power to Edison and to permit the  Imperial
Valley Projects to sell such power to other purchasers in California.

     On March 22, 2001, the Superior Court granted the Imperial Valley Projects'
Motion for Summary  Adjudication  and a Declaratory  Judgment  ordering that: 1)
under the Power Purchase Agreements, the Imperial Valley Projects have the right
to  temporarily  suspend  deliveries  of capacity  and energy to Edison,  2) the
Imperial Valley Projects are entitled to resell the energy and capacity to other
purchasers  and 3) the interim  suspension  of deliveries to Edison shall not in
any respect  result in the  modifications  or  termination of the Power Purchase
Agreements and the Power Purchase  Agreements shall in all respects  continue in
full force and effect  other than the  temporary  suspension  of  deliveries  to
Edison.  The Imperial Valley  Projects  intend to vigorously  pursue their other
remedies in this action in light of Edison's continuing non-payment.

     As a result of the March  22,  2001  Declaratory  Judgement,  the  Imperial
Valley  Projects  suspended  deliveries  of energy to Edison and entered  into a
transaction  agreement with El Paso Merchant Energy,  L.P. ("EPME") in which the
Imperial Valley  Projects'  available power is sold to EPME based on percentages
of the Dow Jones SP-15 Index.

                                      -5-
<PAGE>

     CE Generation is hopeful that the current Edison situation is temporary and
the proceedings in the legal,  regulatory,  financial and political  arenas will
lead to the improvement of Edison's  financial  condition in the near future and
the  payment  by Edison of  amounts  due  under the Power  Purchase  Agreements.
However, no assurance can be given that this will be the case.

     As a result of Edison's  failure to make the  payments  due under the Power
Purchase  Agreements  and the recent  downgrades  of  Edison's  credit  ratings,
Moody's has downgraded the ratings for the Salton Sea Funding  Corporation  (the
"Funding  Corporation")  Securities  to  Caa2  (negative  outlook)  and  S&P has
downgraded  the ratings for the Funding  Corporation  Securities to BBB- and has
placed the  Securities on "credit watch  negative".  Moody's has  downgraded the
ratings for the CE  Generation  Securities  to B1 from Baa3 (review for possible
downgrade).  However,  a failure  by Edison to make  these  payments  as well as
subsequent monthly payments, for a substantial period of time after the payments
are due, is not expected to have a material  adverse effect on the ability of CE
Generation to make  payments on the CE  Generation  bonds due to cash flows from
the Gas Projects and the current ability of the Imperial Valley Projects to sell
to purchasers other than Edison.  However, there can be no assurance that such a
failure by Edison would not cause a material adverse effect.

     The Imperial Valley Projects are contractually entitled to receive payments
under  the  Power  Purchase  Agreements.   However,  due  to  the  uncertainties
associated with Edison's  financial  condition and failure to pay, CE Generation
has established an allowance for doubtful  accounts of approximately $44 million
at March 31, 2001.

B.  NYSEG

     On  February  14,  1995,  NYSEG  filed  with  the  FERC  a  Petition  for a
Declaratory  Order,  Complaint,  and Request for  Modification of Rates in Power
Purchase  Agreements Imposed Pursuant to the Public Utility Regulatory  Policies
Act of 1978  ("Petition")  seeking FERC (i) to declare that the rates NYSEG pays
under the Saranac Power Purchase  Agreement  ("Saranac PPA"), which was approved
by the New York Public  Service  Commission  (the "PSC"),  were in excess of the
level  permitted under PURPA and (ii) to authorize the PSC to reform the Saranac
PPA. On March 14, 1995, the Saranac Partnership  intervened in opposition to the
Petition asserting,  inter alia, that the Saranac PPA fully complied with PURPA,
that NYSEG's  action was  untimely and that the FERC lacked  authority to modify
the Saranac  PPA. On April 12,  1995,  the FERC by a  unanimous  (5-0)  decision
issued an order  denying  the  various  forms of relief  requested  by NYSEG and
finding that the rates required under the Saranac PPA were consistent with PURPA
and the FERC's  regulations.  On May 11, 1995, NYSEG requested  rehearing of the
order and, by order  issued July 19,  1995,  the FERC  unanimously  (5-0) denied
NYSEG's  request.  On June 14, 1995, NYSEG petitioned the United States Court of
Appeals for the District of Columbia Circuit (the "Court of Appeals") for review
of FERC's  April 12,  1995 order.  FERC moved to dismiss  NYSEG's  petition  for
review on July 28, 1995. On October 30, 1996, all parties filed final briefs and
the Court of Appeals heard oral arguments on December 2, 1996. On July 11, 1997,
the Court of Appeals dismissed NYSEG's appeal from FERC's denial of the petition
on jurisdictional grounds.

     On August 7, 1997,  NYSEG filed a complaint in the U.S.  District Court for
the Northern  District of New York against the FERC,  the PSC (and the Chairman,
Deputy  Chairman  and the  Commissioners  of the  PSC as  individuals  in  their
official capacity), the Saranac Partnership and Lockport Energy Associates, L.P.
("Lockport")  concerning the power purchase  agreements  that NYSEG entered into
with the Saranac Partnership and Lockport. NYSEG's suit asserts that the PSC and
the FERC  improperly  implemented  PURPA in  authorizing  the pricing terms that
NYSEG, the Saranac  Partnership and Lockport agreed to in those  contracts.  The
action raises similar legal arguments to those rejected by the FERC in its April
and July 1995 orders. NYSEG in addition asks for retroactive  reformation of the
contracts  as of the date of  commercial  operation  and  seeks a refund of $281
million from the Saranac Partnership.  The Saranac Partnership and other parties
have filed motions to dismiss and oral  arguments on those motions were heard on
March 2, 1998 and again on March 3, 1999.  On  September  30, 2000 the  District
Court granted the motions to dismiss.  NYSEG filed a Notice of Appeal on October
25, 2000  appealing  the decision to the United  States Court of Appeals for the
Second  Circuit.  NYSEG filed its appellate  brief on February 9, 2001. On March
12, 2001 Saranac filed its  appellate  brief.  Oral  arguments on the appeal are
expected to occur  during the second

                                      -6-
<PAGE>

quarter of 2001.  The  Saranac  Partnership  believes  that  NYSEG's  claims are
without  merit for the same  reasons  described  in the  FERC's  orders  and the
District Court's decision.

3.   RELATED PARTY TRANSACTIONS

     On  September  29,  2000,  Salton Sea Power LLC ("Salton Sea Power") and CE
Turbo LLC ("CE Turbo")  entered into an  agreement to sell all  available  power
from  the  Salton  Sea  Unit V and CE Turbo  to  EPME.  Under  the  terms of the
agreement,  EPME will purchase all available power and sell available  power, on
behalf of Salton Sea Power and CE Turbo into the  California  ISO  markets.  The
purchase price for the available power shall be equivalent to the value actually
received by EPME for the sale of such power, including renewable premiums.

     On  January  17,  2001,  Salton  Sea  Power  and CE  Turbo  entered  into a
transaction  agreement  with  EPME in which  Salton  Sea  Unit V and CE  Turbo`s
available  power after sales to the Salton Sea Zinc Recovery  project is sold to
EPME on day ahead basis.

     On March 27, 2001, the Imperial Valley Projects  entered into a transaction
agreement with EPME in which the Imperial  Valley  Projects'  available power is
sold to EPME based on percentages of the Dow Jones SP-15 Index.

4.   ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial  Accounting  Standards Board (FASB) issued SFAS
133, "Accounting for Derivative  Instruments and Hedging Activities",  which was
delayed by SFAS 137 and amended by SFAS 138. SFAS 133/138  requires an entity to
recognize  all of  its  derivatives  as  either  assets  or  liabilities  in its
statement of financial  position and measure those instruments at fair value. CE
Generation  implemented the new standards on January 1, 2001. As a result of the
adoption of SFAS 133/138,  CE Generation recorded the fair value of the interest
rate swap agreements at January 1, 2001. These interest rate swap agreements are
considered  cash flow hedges and therefore the offset is recorded in accumulated
other  comprehensive  income.  The  adoption  did not have a material  impact on
results of operations or cash flows.

     The FASB's  Derivatives  Implementation  Group  continues  to identify  and
provide guidance on various  implementation  issues related to SFAS 133/138 that
are in varying stages of review and clearance by the  Derivative  Implementation
Group and FASB. CE Generation has not  determined if the ultimate  resolution of
those issues would have a material impact on its financial statements.

5.   CHANGE IN ACCOUNTING POLICY

     CE  Generation  has changed its  accounting  policy for major  maintenance,
overhaul and well workover  costs.  These costs,  which have  historically  been
accounted for using deferral and accrual methods,  are now expensed as incurred.
The new policy went into effect  January 1, 2001 and the Company has  recorded a
cumulative effect of this change of approximately $15.4 million, net of tax.

6.   COMPREHENSIVE INCOME (LOSS)

     Comprehensive  loss for the three  months  ended  March  31,  2001 was $2.1
million, which includes the transition adjustment of $7.7 million related to the
initial  adoption of SFAS 133.  Comprehensive  income for the three months ended
March 31,  2000 was equal to net income  for the  period.  Comprehensive  income
differs from net income due to the fair value adjustment of cash flow hedges.

                                      -7-

<PAGE>

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

     The  following  is  management's  discussion  and  analysis of  significant
factors  which  have  affected  CE  Generation,  LLC  ("CE  Generation"  or  the
"Company")  financial  condition  and results of  operations  during the periods
included in the  accompanying  statements of  operations.  The Company's  actual
results in the future could differ significantly from the historical results.

BUSINESS

     MidAmerican Energy Holdings Company  ("MidAmerican")  completed a strategic
restructuring  in which  MidAmerican's  common  stock  interests  in Magma Power
Company  ("Magma"),  FSRI  Holdings,  Inc.  ("FSRI") and  CalEnergy  Development
Company ("CEDC"),  and their subsidiaries  (which own the geothermal and natural
gas-fired  combined  cycle  cogeneration   facilities   described  below),  were
contributed by MidAmerican to CE Generation. This restructuring was completed in
February 1999.

     The consolidated  financial  statements reflect the consolidated  financial
statements  of  Magma  and  subsidiaries  (excluding  wholly-owned  subsidiaries
retained by MidAmerican), FSRI and subsidiaries and Yuma Cogeneration Associates
("YCA"),  each a wholly-owned  subsidiary.  The basis in assets and  liabilities
have been carried over from MidAmerican.  All material intercompany transactions
and balances have been eliminated in consolidation.

     The following table sets out information concerning CE Generation projects:

PROJECT              FUEL          COMMERCIAL        CAPACITY       LOCATION
                                   OPERATION

Vulcan               Geothermal       1986             34 MW        California
Del Ranch            Geothermal       1989             38 MW        California
Elmore               Geothermal       1989             38 MW        California
Leathers             Geothermal       1990             38 MW        California
CE Turbo             Geothermal       2000(1)          10 MW        California
Salton Sea I         Geothermal       1987             10 MW        California
Salton Sea II        Geothermal       1990             20 MW        California
Salton Sea III       Geothermal       1989             49.8 MW      California
Salton Sea IV        Geothermal       1996             39.6 MW      California
Salton Sea V         Geothermal       2000(1)          49 MW        California
Power Resources      Gas              1988             200 MW       Texas
Yuma                 Gas              1994             50 MW        Arizona
Saranac              Gas              1994             240 MW       New York

(1)  The  Salton  Sea V  Project  and  CE  Turbo  Project  commenced  commercial
     operation in the third quarter of 2000.

     The Vulcan Project, Del Ranch Project, Elmore Project, Leathers Project and
CE Turbo Project are referred to as the "Partnership Projects". The Salton Sea I
Project,  Salton Sea II Project,  Salton Sea III Project,  Salton Sea IV Project
and Salton Sea V Project  are  referred to as the  "Salton  Sea  Projects".  The
Partnership Projects and the Salton Sea Projects are collectively referred to as
the "Imperial Valley Projects".  The Power Resources  Project,  Yuma Project and
Saranac Project are collectively referred to as the "Gas Projects".

                                      -8-
<PAGE>

FACTORS AFFECTING RESULTS OF OPERATIONS

     The capacity  factor for a  particular  project is  determined  by dividing
total quantity of electricity sold by the product of the project's  capacity and
the total hours in the year. The capacity factors for Vulcan Project,  Hoch (Del
Ranch) Project, Elmore Project, Leathers Project and CE Turbo Project plants are
based on capacity amounts of 34, 38, 38, 38, and 10 net megawatts, respectively.
The capacity factors for Salton Sea Unit I Project,  Salton Sea Unit II Project,
Salton Sea Unit III  Project,  Salton Sea Unit IV Project  and Salton Sea Unit V
Project  plants are based on capacity  amounts of 10, 20, 49.8,  39.6 and 49 net
megawatts,  respectively.  The capacity factors for the Saranac  Project,  Power
Resources  Project and Yuma Project plants are based on capacity amounts of 240,
200 and 50 net megawatts, respectively. Each plant possesses an operating margin
which allows for production in excess of the amount listed above. Utilization of
this operating  margin is based upon a variety of factors and can be expected to
vary  throughout  the year  under  normal  operating  conditions.  The amount of
revenues  received by these projects is affected by the extent to which they are
able to operate and generate electricity. Accordingly, the capacity and capacity
factor figures provide  information on operating  performance  that has affected
the revenues received by these projects.

POWER PURCHASE AGREEMENTS

     Imperial Valley Projects. As a result of legal proceedings with Edison, the
Imperial Valley  projects  suspended power sales to Edison on March 22, 2001 and
entered  into a  transaction  agreement  to sell  available  power to EPME.  See
discussion in Liquidity and Capital Resources, page 12.

     Until March 22, 2001 the operating  Partnership  Projects (excluding the CE
Turbo Project) sold all  electricity  generated by the  respective  plants under
four  long-term SO4  Agreements  between the  Partnership  Projects and Southern
California Edison Company ("Edison"). These SO4 Agreements provided for capacity
payments,  capacity bonus payments and energy payments. Edison made fixed annual
capacity and capacity bonus payments to the  Partnership  Projects to the extent
that capacity factors exceed  benchmarks set forth in the agreements.  The price
for  capacity  and  capacity  bonus  payments  is fixed  for the life of the SO4
Agreements. Energy is sold at increasing scheduled rates for the first ten years
after firm  operation  and  thereafter  at rates  based on the cost that  Edison
avoids by  purchasing  energy  from the  Imperial  Valley  Partnership  Projects
instead of obtaining the energy from other sources.

     Until March 22, 2001 Salton Sea Unit I Project sold  electricity  to Edison
under a 30-year negotiated power purchase agreement, which provided for capacity
and energy  payments.  The energy payment is calculated using a base price which
is subject  to  quarterly  adjustments  based on a basket of  indices.  The time
period  weighted  average energy payment for Salton Sea Unit I was 5.9 cents per
kilowatt-hour  during the three months  ended March 31, 2001.  As the Salton Sea
Unit I Power  Purchase  Agreement  ("PPA")  is not a SO4  Agreement,  the energy
payments  do not  revert to  payments  based on the cost that  Edison  avoids by
purchasing  energy from Salton Sea Unit I instead of  obtaining  the energy from
other sources. The capacity payment is approximately $1.1 million per annum.

     Until  March 22,  2001  Salton Sea Unit II Project  and Salton Sea Unit III
Project sold  electricity to Edison under 30-year  modified SO4 Agreements  that
provided for capacity payments, capacity bonus payments and energy payments. The
price for contract  capacity and contract  capacity  bonus payments is fixed for
the life of the modified  SO4  Agreements.  The energy  payments for each of the
first ten year periods, which period expired in April 2000 for Salton Sea II and
expired in  February  1999 for Salton Sea III,  are  levelized  at a time period
weighted average of 10.6 cents per kilowatt-hour and 9.8 cents per kilowatt-hour
for Salton Sea Unit II and Salton Sea Unit III,  respectively.  Thereafter,  the
monthly  energy  payments are based on the cost that Edison avoids by purchasing
energy from Salton Sea Unit II or III instead of obtaining the energy from other
sources. For Salton Sea Unit II only, Edison is entitled to receive, at no cost,
5% of all  energy  delivered  in  excess  of 80% of  contract  capacity  through
September 30, 2004.  The annual  capacity and bonus payments for Salton Sea Unit
II and Salton Sea Unit III are  approximately  $3.3  million  and $9.7  million,
respectively.

                                      -9-
<PAGE>

     Until March 22, 2001,  the Salton Sea Unit IV Project sold  electricity  to
Edison  under a modified SO4  Agreement  which  provided  for contract  capacity
payments  on 34  megawatts  of  capacity  at two  different  rates  based on the
respective  contract  capacities deemed  attributable to the original Salton Sea
Unit I PPA  option  (20  megawatts)  and to  the  original  Fish  Lake  PPA  (14
megawatts).  The capacity  payment  price for the 20 megawatts  portion  adjusts
quarterly based upon specified indices and the capacity payment price for the 14
megawatts  portion is a fixed levelized rate. The energy payment (for deliveries
up to a rate of 39.6 megawatts) is at a fixed rate for 55.6% of the total energy
delivered by Salton Sea Unit IV and is based on an energy  payment  schedule for
44.4% of the total  energy  delivered  by Salton Sea Unit IV. The contract has a
30-year term but Edison is not required to purchase the 20 megawatts of capacity
and energy  originally  attributable  to the Salton Sea Unit I PPA option  after
September 30, 2017, the original termination date of the Salton Sea Unit I PPA.

     Edison's  average  avoided cost of energy was 15.2 cents per  kilowatt-hour
and 3.2 cents per  kilowatt-hour  for the three  months ended March 31, 2001 and
2000,  respectively.  Estimates of Edison's  future  avoided cost of energy vary
substantially from year to year.

     The CE Turbo project,  which  commenced  commercial  operation in the third
quarter of 2000,  sells its output  through  market  transactions.  The CE Turbo
project may sell its output to a zinc  facility,  which is owned by a subsidiary
of MidAmerican and is expected to commence commercial  operations in mid to late
2001.

     Salton Sea Unit V Project,  which commenced operations in the third quarter
2000, will sell approximately  one-third of its net output to the zinc facility,
which is owned by a  subsidiary  of  MidAmerican  and is  expected  to  commence
commercial  operations  in mid to late 2001.  The  remainder of the Salton Sea V
output is sold through other market transactions.

     On  January  17,  2001,  Salton  Sea  Power  and CE  Turbo  entered  into a
transaction  agreement  with  EPME in which  Salton  Sea  Unit V and CE  Turbo's
available  power after sales to the Salton Sea Zinc Recovery  project is sold to
EPME on day ahead basis.

     As a result of the legal  proceedings  with  Edison,  on March 22, 2001 the
Imperial Valley Projects suspended  deliveries of energy to Edison. The Imperial
Valley  Projects  (excluding  Salton  Sea  Unit  V and  Turbo)  entered  into  a
transaction  agreement to sell  available  power to EPME based on percentages of
the Dow Jones SP-15 Index.

     Gas  Projects.  The Saranac  Project sells  electricity  to NYSEG under the
Saranac PPA, which provides for capacity and energy payments. Capacity payments,
which  for the  three  months  ended  March  31,  2001  totaled  2.57  cents per
kilowatt-hour,  are received  for  electricity  produced  during "peak hours" as
defined in the Saranac PPA and escalate at  approximately  4.1% annually for the
remaining term of the contract.  Energy payments,  which averaged 7.49 cents per
kilowatt-hour   for  the  three  months  ended  March  31,  2001,   escalate  at
approximately  4.4%  annually  for the  remaining  term of the Saranac  PPA. The
Saranac PPA expires in June of 2009.

     The Power Resources Project sells  electricity to Texas Utilities  Electric
Company under the Power  Resources  PPA,  which provides for capacity and energy
payments.  Capacity  payments  and energy  payments,  which for the three months
ended  March  31,  2001  were  $3.48  million  per  month  and  3.59  cents  per
kilowatt-hour, respectively, escalate at 3.5% annually for the remaining term of
the Power Resources PPA. The Power Resources PPA expires in September 2003.

     The Yuma  Project  sells  electricity  to San Diego Gas & Electric  Company
("SDG&E")  under the Yuma PPA.  The energy is sold at a price  based on the cost
that  SDG&E  avoids  by  purchasing  energy  from the Yuma  Project  instead  of
obtaining  the energy from other  sources and the capacity is sold to SDG&E at a
fixed price for the life of the Yuma PPA.  The power is  delivered to SDG&E over
transmission  lines  constructed  and owned by Arizona  Public  Service  Company
("APS").

                                      -10-
<PAGE>

RESULTS OF OPERATIONS

     Sales of  electricity  and steam  increased  to $148  million for the three
months  ended March 31,  2001 from $92  million  for the same period in 2000,  a
60.9%  increase.  This  increase was a result of higher  energy prices under the
Imperial  Valley  Projects' and the Yuma Project's PPAs. The increase was also a
result of the  addition  of the  Salton  Sea V and Turbo  Projects  in the third
quarter of 2000. The increases are partially offset by an allowance for doubtful
accounts for the Edison receivables of approximately $44 million.

     The  following   operating  data  represents  the  aggregate  capacity  and
electricity production of the Imperial Valley Projects:

                                                 Three Months Ended
                                                     March 31,
                                              ----------------------
                                                2001           2000
                                              -------        -------
Overall capacity factor                          92.4%          65.5%
Megawatt-hours produced                       651,500        382,500
Capacity (net megawatts)(average)               326.4          267.4

     The overall  capacity factor for the Salton Sea Projects  increased for the
three months ended March 31, 2001 compared to the same period in 2000 due to the
scheduled  but more  extensive  overhauls  in 2000  than in 2001.  The  capacity
increased due to the addition of Salton Sea Unit V and Turbo in 2000.

     The  following   operating  data  represents  the  aggregate  capacity  and
electricity production of the Gas Projects:

                                                  Three Months Ended
                                                      March 31,
                                               ------------------------
                                                 2001           2000
                                               ---------      ---------

Overall capacity factor                            95.1%          90.1%
Megawatt-hours produced                        1,006,940        964,351
Capacity (net megawatts)(weighted average)           490            490

     The overall  capacity  factor of the Gas  Projects  reflects  the effect of
contractual  curtailments.  The capacity factors adjusted for these  contractual
curtailments  during the three  months  ended March 31, 2001 and 2000 were 99.6%
and 98.0%, respectively.

     Interest and other income decreased to $1.7 million during the three months
ended  March 31,  2001  from  $2.5  million  for the same  period in 2000.  This
decrease is primarily the result of lower cash  balances  resulting in decreased
interest income.

     Fuel  expenses  increased  during the three  months ended March 31, 2001 to
$36.7 million from $28.2  million for the same period in 2000.  The increase was
due to increased production and higher gas prices in 2001 primarily at Yuma.

     Plant operating  expenses increased during the three months ended March 31,
2001 to $33.8  million  from $20.3  million for the same  period in 2000.  These
costs include operating,  maintenance,  resource, general and administrative and
other plant  operating  expenses.  The increase  was due to increased  operating
costs at the  Imperial  Valley  Projects due to the addition of Salton Sea V and
Turbo  Projects,  and increased  royalty  expense and increased  brine  disposal
costs.

                                      -11-
<PAGE>

     Depreciation and  amortization  increased to $20.7 million during the three
months ended March 31, 2001 from $19.4 million for the same period in 2000.  The
increase  resulted  from the addition of Salton Sea V Project,  CE Turbo Project
and an upgraded brine handling system.

     Interest  expense,  less amounts  capitalized,  increased  during the three
months  ended March 31, 2001 to $21.0  million  from $20.0  million for the same
period in 2000.  The  increase  resulted  from  completion  of the  construction
projects and  discontinuation  of  capitalized  interest.  These  variances were
partially offset by lower interest expense  resulting from the paydown of Salton
Sea Funding Corporation, Power Resources and Saranac Project debt.

     The provision for income taxes  increased to $12.5 million during the three
months  ended March 31,  2001 from $.4 million for the same period in 2000.  The
changes  from  year to year  in the  effective  rate  are due  primarily  to the
generation  of energy tax credits and  depletion  deductions.  The change in the
effective  rate  from  2000 to 2001 was  primarily  due to the 2000  energy  tax
credits  received in  conjunction  with the  completion  of the Salton Sea V and
Turbo construction projects.

     The  Company  has  changed  its  accounting  policy for major  maintenance,
overhaul and well workover  costs.  These costs,  which have  historically  been
accounted for using deferral and accrual methods,  are now expensed as incurred.
The cumulative effect of the change in accounting policy represents a January 1,
2001  write off of prepaid  and  accrued  major  maintenance  and well  workover
balances of approximately $15.4 million, net of tax.

LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash  equivalents were $47.1 million at March 31, 2001 as compared
to $36.2  million at December 31, 2000. In addition,  restricted  cash was $25.3
million and $24.4 million at March 31, 2001 and December 31, 2000, respectively.

     Edison,  a  wholly-owned  subsidiary of Edison  International,  is a public
utility primarily engaged in the business of supplying electric energy to retail
customers  in  Central  and  Southern  California,  excluding  Los  Angeles.  CE
Generation  is aware that there have been  public  announcements  that  Edison's
financial condition has deteriorated as a result of reduced liquidity.  Based on
public announcements, CE Generation understands that Edison has not made certain
payments to other  qualifying  facilities  ("QFs") from which  Edison  purchases
power and has not made  scheduled  payments  of debt  service.  Edison's  senior
unsecured  debt  obligations  are  currently  rated Caa2 (on watch for  possible
downgrade) by Moody's and D by S&P.

     Edison has failed to pay  approximately  $119  million  due under the Power
Purchase  Agreements  for power  delivered  in November  and  December  2000 and
January, February and March 2001, although the Power Purchase Agreements provide
for billing and payment on a schedule  where  payments  would have normally been
received in early January,  February,  March, April and May 2001. Edison has not
notified  the  Imperial  Valley  Projects  as to when they can expect to receive
these payments.

     On February 21, 2001, the Imperial  Valley Projects  (excluding  Salton Sea
Unit V and CE Turbo) filed a lawsuit  against  Edison in  California's  Imperial
County  Superior  Court  seeking  a court  order  requiring  Edison  to make the
required  payments  under  the  Power  Purchase  Agreements.  The  lawsuit  also
requested,  among other things,  that the court order permit the Imperial Valley
Projects  to suspend  deliveries  of power to Edison and to permit the  Imperial
Valley Projects to sell such power to other purchasers in California.

     On March 22, 2001, the Superior Court granted the Imperial Valley Projects'
Motion for Summary  Adjudication  and a Declaratory  Judgment  ordering that: 1)
under the Power Purchase Agreements, the Imperial Valley Projects have the right
to  temporarily  suspend  deliveries  of capacity  and energy to Edison,  2) the
Imperial Valley Projects are entitled to resell the energy and capacity to other
purchasers  and 3) the interim  suspension  of deliveries to Edison shall not in
any respect  result in the  modifications  or  termination of the Power Purchase
Agreements and the Power Purchase  Agreements shall in all respects  continue in
full

                                      -12-
<PAGE>

force and effect other than the  temporary  suspension  of deliveries to Edison.
The Imperial Valley Projects intend to vigorously pursue their other remedies in
this action in light of Edison's continuing non-payment.

     As a result of the March 22, 2001 Declaratory Judgment, the Imperial Valley
projects  suspended  energy  deliveries to Edison and entered into a transaction
agreement  with El Paso  Merchant  Energy,  L.P.  ("EPME") in which the Imperial
Valley Projects' available power is sold to EPME based on percentages of the Dow
Jones SP-15 Index.  As a result of the cash  received  from these and  estimated
future sales, the Company estimates the May 2001 principal and interest payments
will be made from available cash.

     CE Generation is hopeful that the current Edison situation is temporary and
the proceedings in the legal,  regulatory,  financial and political  arenas will
lead to the improvement of Edison's  financial  condition in the near future and
the  payment  by Edison of  amounts  due  under the Power  Purchase  Agreements.
However, no assurance can be given that this will be the case.

     As a result of Edison's  failure to make the  payments  due under the Power
Purchase  Agreements  and the recent  downgrades  of  Edison's  credit  ratings,
Moody's has downgraded the ratings for the Salton Sea Funding  Corporation  (the
"Funding  Corporation")  Securities  to  Caa2  (negative  outlook)  and  S&P has
downgraded  the ratings for the Funding  Corporation  Securities to BBB- and has
placed the  Securities on "credit watch  negative".  Moody's has  downgraded the
ratings for the CE  Generation  Securities  to B1 from Baa3 (review for possible
downgrade).  However,  a failure  by Edison to make  these  payments  as well as
subsequent monthly payments, for a substantial period of time after the payments
are due, is not expected to have a material  adverse effect on the ability of CE
Generation to make  payments on the CE  Generation  bonds due to cash flows from
the Gas Projects and the current ability of the Imperial Valley projects to sell
to purchasers other than Edison.  However, there can be no assurance that such a
failure by Edison would not cause a material adverse effect.

     The Imperial Valley Projects are contractually entitled to receive payments
under  the  Power  Purchase  Agreements.   However,  due  to  the  uncertainties
associated with Edison's  financial  condition and failure to pay, CE Generation
has established an allowance for doubtful  accounts of approximately $44 million
at March 31, 2001.

     The net revenues,  equity  distributions and royalties from the Partnership
and Salton Sea  Projects  are used to pay  principal  and  interest  payments on
outstanding  senior secured bonds issued by the Salton Sea Funding  Corporation,
the final series of which is scheduled  to mature in November  2018.  The Salton
Sea Funding  Corporation debt is guaranteed by subsidiaries of Magma and secured
by the capital stock of the Salton Sea Funding Corporation.  The proceeds of the
Salton Sea  Funding  Corporation  debt were  loaned by the  Salton  Sea  Funding
Corporation  under loan  agreements and notes to  subsidiaries of Magma and used
for  construction  of  Salton  Sea  Unit V  Project  and the CE  Turbo  Project,
refinancing of  indebtedness  and other  purposes.  Debt service on the Imperial
Valley loans is used to repay debt service on the Salton Sea Funding Corporation
debt.  The Imperial  Valley loans and the  guarantees  of the Salton Sea Funding
Corporation  debt  are  secured  by  substantially  all  of  the  assets  of the
guarantors,  including the Imperial Valley projects, and by the equity interests
in the guarantors.

     The  proceeds  of Series F of the Salton Sea Funding  Corporation  debt are
being used in part to construct the zinc  facility,  and the direct and indirect
owners of the zinc  facility are among the  guarantors of the Salton Sea Funding
Corporation debt.  MidAmerican has guaranteed the payment by the zinc guarantors
of a specified  portion of the  scheduled  debt service on the  Imperial  Valley
loans  described in the preceding  paragraph,  including  the current  principal
amount of approximately $140.5 million and associated interest.

     Certain  information  included  in  this  report  contains  forward-looking
statements made pursuant to the Private Securities Litigation Reform Act of 1995
("Reform Act"). Such statements are based on current  expectations and involve a
number of known and unknown risks and uncertainties  that could cause the actual
results and  performance of the Company to differ  materially  from any expected
future  results or  performance,  expressed or implied,  by the  forward-looking
statements. In connection with the safe harbor provisions of the Reform Act, the
Company has  identified  important  factors that could cause  actual  results to
differ materially

                                      -13-
<PAGE>

from such  expectations,  including  development and  construction  uncertainty,
operating uncertainty, acquisition uncertainty,  uncertainties relating to doing
business  outside of the United  States,  uncertainties  relating to  geothermal
resources,  uncertainties  relating to domestic and  international  economic and
political  conditions  and  uncertainties  regarding the impact of  regulations,
changes in government policy,  industry deregulation and competition.  Reference
is made to all of the Company's SEC filings,  incorporated  herein by reference,
for a description  of such factors.  The Company  assumes no  responsibility  to
update forward-looking information contained herein.

ENVIRONMENTAL LIABILITIES

     The Company may be exposed to environmental costs in the ordinary course of
business.  Expenditures for ongoing  compliance with  environmental  regulations
that relate to current  operations are expensed or  capitalized as  appropriate.
Expenditures that relate to an existing condition caused by past operations, and
which do not contribute to current or future revenue  generation,  are expensed.
Liabilities   are  recorded  when   environmental   assessments   indicate  that
remediation  efforts are  probable  and the costs can be  reasonably  estimated.
Estimates of the liability are based upon currently  available  facts,  existing
technology and presently enacted laws and regulations  taking into consideration
the likely  effects of  inflation  and other social and  economic  factors,  and
include  estimates of associated legal costs.  These amounts also consider prior
experience in remediating sites, other companies'  clean-up  experience and data
released by the Environmental  Protection Agency or other  organizations.  These
estimated  liabilities are subject to revision in future periods based on actual
costs or new circumstances,  and are included in the accompanying balance sheets
at their undiscounted  amounts.  As of March 31, 2001 and December 31, 2000, the
environmental liabilities recorded on the balance sheet were not material.

INFLATION

     Inflation  has  not  had  a  significant  impact  on CE  Generation's  cost
structure.

                                      -14-

<PAGE>


                           PART II OTHER INFORMATION.

ITEM I - LEGAL PROCEEDINGS

     Neither CE  Generation  nor its  subsidiaries  are parties to any  material
legal matters except those described in Footnote 2 of CE Generation's  financial
statements.

ITEM 2 - CHANGES IN SECURITIES

     Not applicable.

ITEM 3 - DEFAULT ON SENIOR SECURITIES

     Not applicable.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     Not applicable.

ITEM 5 - OTHER INFORMATION

     Not applicable.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

          Exhibit 18, Letter regarding Change in Accounting Principles.

     (b)  Reports on Form 8-K:

          Current report filed January 16, 2001, report of unscheduled  material
          events regarding California  electricity crisis and Edison's financial
          condition.

          Current report filed January 19, 2001, report of unscheduled  material
          events regarding California  electricity crisis and Edison's financial
          condition.

          Current report filed February 20, 2001, report of unscheduled material
          events regarding California  electricity crisis and Edison's financial
          condition.

                                      -15-
<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,  in the City of Omaha,
State of Nebraska, on this 14th day of May, 2001.

                                  CE Generation, LLC

                                  /s/ Joseph M. Lillo
                                  -----------------------------
                                  By:  Joseph M. Lillo
                                  Vice President and Controller





                                      -16-

<PAGE>


                                  EXHIBIT INDEX

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

18       Letter  of  Deloitte  &  Touche,  LLP  regarding  Change
         in  Accounting Principles.                                    18




                                      -17-