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

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2003

                          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, Nebraska                              68131
               ---------------                              -----
  (Address of principal executive offices)               (Zip Code)

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

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


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

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

The members' equity accounts are held 50% by MidAmerican Energy Holdings Company
and 50% by TransAlta USA Inc. as of October 31, 2003.

<PAGE>




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

                         PART I - FINANCIAL INFORMATION

Item 1.    Financial Statements............................................... 3
Item 2.    Management's Discussion and Analysis of Financial Condition and
             Results of Operations............................................11
Item 3.    Quantitative and Qualitative Disclosures About Market Risk.........17
Item 4.    Controls and Procedures............................................17

                           PART II - OTHER INFORMATION

Item 1.    Legal Proceedings..................................................18
Item 2.    Changes in Securities and Use of Proceeds..........................18
Item 3.    Defaults Upon Senior Securities....................................18
Item 4.    Submission of Matters to a Vote of Security Holders................18
Item 5.    Other Information..................................................18
Item 6.    Exhibits and Reports on Form 8-K...................................18

SIGNATURES....................................................................19
EXHIBIT INDEX.................................................................20


                                  -2-

<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.


                         INDEPENDENT ACCOUNTANTS' REPORT



Board of Directors and Members
CE Generation, LLC

We have reviewed the accompanying  consolidated  balance sheet of CE Generation,
LLC and  subsidiaries  (the "Company") as of September 30, 2003, and the related
consolidated  statements of operations  and other  comprehensive  income for the
three-month  and  nine-month  periods ended  September 30, 2003 and 2002, and of
cash flows for the nine-month  periods ended September 30, 2003 and 2002.  These
interim financial statements are the responsibility of the Company's management.

We  conducted  our  reviews 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
and 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 reviews, we are not aware of any material modifications that should
be made to such  consolidated  interim  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 and  subsidiaries  as of  December  31,  2002,  and the related
consolidated  statements of operations and other comprehensive income,  members'
equity and cash flows for the year then ended (not presented herein); and in our
report dated  January 24, 2003  (January 29, 2003 as to Note 12) 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, 2002 is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.

As discussed in Note 2 to the  consolidated  financial  statements,  in 2003 the
Company changed its accounting policy for asset retirement obligations.

/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP
Omaha, Nebraska
November 3, 2003

                                  -3-
<PAGE>


                       CE GENERATION, LLC AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                                     As of
                                                                                        ----------------------------------
                                                                                        September 30,        December 31,
                                                                                              2003               2002
                                                                                        ----------------   ---------------
                                                                                          (Unaudited)
                                     ASSETS
<S>                                                                                             <C>             <C>
Current assets:
  Cash and cash equivalents.............................................................   $      92,619   $     43,706
  Restricted cash.......................................................................           8,097         60,238
  Trade accounts receivable, net........................................................          69,689         62,138
  Trade accounts receivable from affiliate..............................................           1,584          1,416
  Prepaid expenses and other current assets.............................................           4,168          9,943
  Inventories...........................................................................          24,558         25,049
  Due from affiliates...................................................................              43              -
                                                                                              ----------     ----------
     Total current assets...............................................................         200,758        202,490
                                                                                              ----------     ----------
Restricted cash.........................................................................          10,454         14,299
Properties, plants, contracts and equipment, net........................................       1,185,972      1,234,408
Goodwill................................................................................         265,897        265,897
Note receivable from related party......................................................         137,086        137,789
Deferred financing charges and other assets.............................................           8,917         10,153
                                                                                              ----------     ----------
Total assets............................................................................      $1,809,084     $1,865,036
                                                                                              ==========     ==========

                         LIABILITIES AND MEMBERS' EQUITY

Current liabilities:
  Accounts payable......................................................................      $    3,261     $      667
  Accrued interest......................................................................          16,241          3,382
  Interest rate swap liability..........................................................          16,623         21,023
  Other accrued liabilities.............................................................          35,089         36,551
  Income tax payable....................................................................           7,884              -
  Due to affiliates.....................................................................               -            406
  Current portion of long-term debt.....................................................          66,919         86,656
                                                                                              ----------      ---------
     Total current liabilities..........................................................         146,017        148,685
                                                                                              ----------      ---------
Project loans...........................................................................         105,997        122,573
Salton Sea notes and bonds..............................................................         448,296        463,591
Senior secured bonds....................................................................         331,100        338,400
Deferred income taxes...................................................................         254,451        248,033
Other long-term liabilities.............................................................           7,883          1,480
                                                                                              ----------      ---------
  Total liabilities.....................................................................       1,293,744      1,322,762
                                                                                              ----------      ---------

Minority interest.......................................................................          50,354         52,379

Commitments and contingencies (Notes 4 and 5)

Members' equity.........................................................................         472,567        499,748
Accumulated other comprehensive loss....................................................          (7,581)        (9,853)
                                                                                              ----------     ----------
  Total members' equity.................................................................         464,986        489,895
                                                                                              ----------     ----------
Total liabilities and members' equity...................................................      $1,809,084     $1,865,036
                                                                                              ==========     ==========
</TABLE>

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

                                  -4-
<PAGE>


                       CE GENERATION, LLC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                         AND OTHER COMPREHENSIVE INCOME
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                              Three Months               Nine Months
                                                                           Ended September 30,     Ended September 30,
                                                                           -------------------     -------------------
                                                                             2003       2002         2003       2002
                                                                           --------   --------     --------   --------
                                                                                            (Unaudited)
<S>                                                                       <C>           <C>             <C>     <C>
Revenue:
   Operating revenue...................................................   $142,803     $141,305     $388,213     $381,247
   Interest and other income...........................................        696        2,272        1,969        7,237
                                                                          --------     --------     --------     --------
     Total revenue.....................................................    143,499      143,577      390,182      388,484
                                                                          --------     --------     --------     --------
Costs and expenses:
   Fuel................................................................     32,085       30,398       95,790       89,667
   Plant operations....................................................     33,415       31,023       98,369       96,684
   General and administrative..........................................      1,085        2,106        3,200        4,875
   Depreciation and amortization.......................................     21,796       19,966       64,579       62,380
   Interest expense....................................................     17,187       18,950       53,097       58,108
                                                                          --------    ---------     --------     --------
     Total costs and expenses..........................................    105,568      102,443      315,035      311,714
                                                                          --------    ---------     --------     --------
Income before provision for income taxes...............................     37,931       41,134       75,147       76,770
   Provision for income taxes..........................................      9,004       10,999       18,139       19,408
                                                                          --------    ---------     --------     --------
Income before minority interest........................................     28,927       30,135       57,008       57,362
   Minority interest...................................................      6,205        5,287       16,722       14,974
                                                                          --------    ---------     --------     --------
Income before cumulative effect of change in accounting principle......     22,722       24,848       40,286       42,388
   Cumulative effect of change in accounting
     principle, net of tax (Note 2)....................................          -            -       (2,467)           -
                                                                          --------    ---------     --------    ---------
Net income.............................................................   $ 22,722    $  24,848     $ 37,819    $  42,388
                                                                          ========    =========     ========    =========

Other comprehensive income:
   Unrealized gain (loss) on cash flow hedges, net of tax..............      2,060       (1,721)       2,272       (2,139)
                                                                          --------    ---------     --------    ---------
Comprehensive income...................................................   $ 24,782    $  23,127     $ 40,091    $  40,249
                                                                          ========    =========     ========    =========
</TABLE>

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

                                  -5-
<PAGE>



                       CE GENERATION, LLC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                                         Nine Months
                                                                                                     Ended September 30,
                                                                                                    --------------------
                                                                                                      2003         2002
                                                                                                    --------     -------
                                                                                                         (Unaudited)


<S>                                                                                                     <C>     <C>

Cash flows from operating activities:
    Net income...................................................................................  $  37,819   $   42,388
    Adjustments to reconcile net income to net cash flows from operating activities:
       Cumulative effect of change in accounting principle, net of tax...........................      2,467            -
       Depreciation and amortization.............................................................     64,579       62,380
       Provision for deferred income taxes.......................................................      6,810       15,489
       Distributions to minority interest in excess of income....................................     (2,900)      (2,132)
       Other.....................................................................................      4,499        1,064
       Changes in other items:
         Trade accounts receivable, net..........................................................     (7,719)      38,073
         Due to/from affiliates..................................................................       (449)      (1,375)
         Other assets............................................................................      7,095        1,792
         Accounts payable and other accrued liabilities..........................................     22,286           45
                                                                                                   ---------    ---------
           Net cash flows from operating activities..............................................    134,487      157,724
                                                                                                   ---------    ---------

Cash flows from investing activities:
    Capital expenditures, net of warranty settlement.............................................    (17,652)     (26,847)
    Decrease in restricted cash..................................................................      3,845          216
                                                                                                   ---------    ---------
       Net cash flows from investing activities..................................................    (13,807)     (26,631)
                                                                                                   ---------    ---------

Cash flows from financing activities:
    Repayment of debt............................................................................    (58,908)     (51,484)
    Distributions................................................................................    (65,000)     (14,400)
    Decrease (increase) in restricted cash.......................................................     52,141      (35,023)
                                                                                                    --------    ---------
       Net cash flows from financing activities..................................................    (71,767)    (100,907)
                                                                                                    ---------   ---------

Net increase in cash and cash equivalents........................................................     48,913       30,186
Cash and cash equivalents at beginning of period.................................................     43,706       34,870
                                                                                                   ---------    ---------
Cash and cash equivalents at end of period.......................................................  $  92,619    $  65,056
                                                                                                   =========    =========

Supplemental Disclosure:
    Interest paid................................................................................  $  40,238    $  42,782
                                                                                                   =========    =========
    Income taxes paid............................................................................  $     920    $     993
                                                                                                   =========    =========
</TABLE>

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

                                  -6-
<PAGE>


                       CE GENERATION, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
1.   General

In the opinion of the management of CE Generation,  LLC ("CE  Generation" or the
"Company") the accompanying  unaudited consolidated financial statements contain
all adjustments  (consisting of normal recurring  accruals) necessary to present
fairly the  financial  position as of  September  30,  2003,  and the results of
operations for the three-month  and nine-month  periods ended September 30, 2003
and 2002, and of cash flows for the nine-month  periods ended September 30, 2003
and 2002. The results of operations for the three-month  and nine-month  periods
ended  September  30, 2003 are not  necessarily  indicative of the results to be
expected for the full year.

The unaudited consolidated financial statements and notes thereto should be read
in  conjunction  with the  consolidated  financial  statements and notes thereto
included in the Company's annual report on Form 10-K for the year ended December
31, 2002.

Certain  amounts in the prior year  financial  statements  and  supporting  note
disclosures  have been  reclassified  in order to  conform to the  current  year
presentation.  Such  reclassifications  did not impact  previously  reported net
income or members' equity.

2.   New Accounting Pronouncements

Effective January 1, 2003, the Company adopted Statement of Financial Accounting
Standards No. 143,  "Accounting for Asset Retirement  Obligations" ("SFAS 143").
This statement  provides  accounting and disclosure  requirements for retirement
obligations   associated  with  long-lived  assets.  The  cumulative  effect  of
initially  applying this  statement was  recognized as a cumulative  effect of a
change in accounting  principle of $2.5 million,  net of tax of $1.6 million, as
of January 1, 2003.

The Company  identified  legal  retirement  obligations  related to landfill and
plant  abandonment  costs,  measured the obligations using an expected cash flow
approach and recorded  those  liabilities  pursuant to SFAS 143 as of January 1,
2003. The following  liabilities  reflect  amounts as if this statement had been
applied during all periods (in thousands):

                                             September 30,         December 31,
                                                2003                  2002
                                           ---------------      ---------------
                                                                    (Proforma)
Plant abandonment....................           $3,969                $3,798
Landfill abandonment.................           $3,914                $3,663

Following  is a  reconciliation  of net income as  originally  reported  for the
three-month and nine-month  periods September 30, 2003 and 2002, to adjusted net
income as if this statement had been applied to all periods (in thousands):

<TABLE>
<CAPTION>
                                                                            Three Months                 Nine Months
                                                                         Ended September 30,       Ended September 30,
                                                                         -------------------       -------------------
                                                                           2003      2002            2003       2002
                                                                         --------  --------        --------   --------

<S>                                                                      <C>            <C>             <C>       <C>
   Reported net income...............................................    $22,722      $24,848        $37,819      $42,388
   Accretion and amortization expense................................          -         (133)             -         (459)
   Cumulative effect of change in accounting principle...............          -            -          2,467            -
                                                                         -------      -------        -------      -------
   Adjusted net income...............................................    $22,722      $24,717        $40,286      $41,929
                                                                         =======      =======        =======      =======
</TABLE>


                                  -7-
<PAGE>



The plant abandonment obligation had not been recorded prior to January 1, 2003.
The landfill abandonment  obligation had a previously recorded liability of $1.5
million at December 31, 2002.

3.   Intangible Assets

The  following  table  summarizes  the  acquired  intangible  assets,  which are
included in properties,  plants,  contracts and  equipment,  net, on the balance
sheet, as of September 30, 2003 and December 31, 2002 (in thousands):

<TABLE>
<CAPTION>

                                                        September 30, 2003                      December 31, 2002
                                               ---------------------------------       ---------------------------------
                                               Gross Carrying        Accumulated       Gross Carrying       Accumulated
                                                   Amount           Amortization           Amount           Amortization
                                               --------------       ------------       --------------       ------------

<S>                                                     <C>                  <C>        <C>                     <C>
         Amortized Intangible Assets:
         Power Purchase Contracts...........        $338,716            $216,319           $338,716            $203,685
         Patented Technology................          46,290              16,833             46,290              15,385
                                                    --------            --------           --------          ----------
           Total............................        $385,006            $233,152           $385,006            $219,070
                                                    ========            ========           ========            ========
</TABLE>

Amortization  expense on acquired  intangible  assets was $4.6 million and $14.1
million for the  three-month  and nine-month  periods ended  September 30, 2003,
respectively,  and $4.6  million  and  $13.7  million  for the  three-month  and
nine-month periods ended September 30, 2002, respectively. CE Generation expects
amortization  expense on acquired intangible assets to be $18.7 million for 2003
and $15.8 million for each of the five succeeding fiscal years.

4.   Commitments and Contingencies

Edison and the California Power Exchange
----------------------------------------

Due to reduced  liquidity,  Southern  California Edison ("Edison") had failed to
pay approximately $119 million owed under the power Purchase Agreements with the
projects  indirectly  owned by the Company  located in the Imperial  Valley (the
"Imperial Valley  Projects")  (excluding the Salton Sea V and CE Turbo Projects)
for power  delivered in the fourth  quarter 2000 and the first quarter 2001. Due
to Edison's failure to pay contractual obligations, the Imperial Valley Projects
(excluding the Salton Sea V and CE Turbo  Projects) had established an allowance
for doubtful accounts of approximately $21 million as of December 31, 2001.

Pursuant to a  settlement  agreement,  the final  payment by Edison for past due
balances was received March 1, 2002.  Following the receipt of Edison's  payment
of past due  balances,  the Imperial  Valley  Projects  released  the  remaining
allowance for doubtful accounts.

Edison has disputed a portion of the settlement  agreement and has failed to pay
approximately  $3.9  million of  capacity  bonus  payments  for the months  from
October  2001  through May 2002.  On December  10,  2001,  the  Imperial  Valley
Projects  (excluding the Salton Sea I, Salton Sea V and CE Turbo Projects) filed
a lawsuit against Edison in California's  Imperial County Superior Court seeking
a court order  requiring  Edison to make the required  capacity  bonus  payments
under  the Power  Purchase  Agreements.  Due to  Edison's  failure  to pay these
contractual  obligations,  the Imperial Valley Projects established an allowance
for doubtful accounts of approximately  $2.7 million as of December 31, 2002. In
connection with the June 11, 2003 settlement  discussed  below,  the receivables
associated with this allowance were written off during 2003.

On March 25,  2002,  Salton  Sea II's 10  megawatt  ("MW")  turbine  went out of
service due to an uncontrollable  force event. Such  uncontrollable  force event
ended,  and Salton Sea II returned to service,  on  December  17,  2002.  Edison
failed  to  recognize  the  uncontrollable  force  event and as such did not pay
amounts otherwise due and owing and improperly  derated Salton Sea II from 15 MW
to 12.5 MW,  under the Salton Sea II Power  Purchase  Agreement.  On January 29,
2003,  Salton  Sea Power  Generation,  L.P.,  owner of Salton  Sea II,  served a
complaint on Edison for such unpaid amounts and to rescind such deration.

                                  -8-
<PAGE>

On June 11, 2003,  the Imperial  Valley  Projects  (excluding  the Salton Sea I,
Salton Sea V and CE Turbo  projects)  entered into a settlement  agreement  with
Edison.  The settlement,  which relates to the capacity bonus payment and Salton
Sea II uncontrollable force event disputes,  provides for an $800,000 settlement
payment  from  Edison,  payment of amounts  previously  withheld for the Unit II
deration and the recission of such deration. The amounts previously withheld for
the Unit II deration were received in the second  quarter of 2003.  The $800,000
settlement  payment  is  contingent  upon  approval  by  the  California  Public
Utilities Commission.

On July 10,  2003,  Salton Sea IV's 34 MW turbine  went out of service due to an
uncontrollable  force event. Such  uncontrollable  force event ended, and Salton
Sea IV returned to service on September 17, 2003. Edison failed to recognize the
uncontrollable  force event and as such has not paid amounts  otherwise  due and
owing under the Salton Sea IV Power Purchase Agreement totaling $1.7 million. On
September 19, 2003 and October 17, 2003, Salton Sea Power Generation, L.P., with
Fish Lake Power  Company,  owner of Salton Sea IV served notices of error Edison
for such unpaid amounts.  As a result, the Company  established  reserve of $1.4
million for capacity payments as of September 30, 2003.

As a result of  uncertainties  related  to  Edison,  the  letter of credit  that
supported the debt service  reserve fund at Salton Sea Funding  Corporation  had
not been extended  beyond its then existing July 2004  expiration  date,  and as
such cash distributions were not available to CE Generation until the Salton Sea
Funding Corporation debt service reserve fund of approximately $65.4 million had
been  funded or the  letter of credit  had been  extended  beyond  its July 2004
expiration  date or replaced.  At December 31, 2002, the fund had a cash balance
of $46.3 million.

In May 2003,  the previous  $65.4 million  Salton Sea Funding  Corporation  debt
service  reserve letter of credit was replaced by a $32.7 million  TransAlta USA
Inc. ("TransAlta"),  a wholly owned subsidiary of TransAlta Corporation,  letter
of credit which expires on May 30, 2004, and a $32.7 million  MidAmerican Energy
Holdings Company ("MidAmerican") letter of credit which expires on June 6, 2006.

These new Salton Sea Funding  Corporation debt service reserve letters of credit
permitted the cash,  which was  previously  restricted,  to be included in funds
distributed to CE Generation on May 29, 2003. During the second quarter of 2003,
CE Generation distributed a total of $65.0 million to MidAmerican and TransAlta.

Stone & Webster
---------------

The Salton Sea V Project  was  constructed  by Stone & Webster,  Inc.  (formerly
Stone & Webster Engineering Corporation),  a wholly-owned subsidiary of the Shaw
Group  ("Stone & Webster"),  pursuant to a date  certain,  fixed-price,  turnkey
engineering,  procure,  construct and manage contract (the "Salton Sea V Project
Contract").  On March 7, 2002, Salton Sea Power L.L.C. ("Salton Sea Power"), the
owner of the Salton Sea V Project,  filed a Demand for Arbitration against Stone
&  Webster  for  breach  of  contract  and  breach  of  warranty   arising  from
deficiencies  in  Stone  &  Webster's  design,  engineering,   construction  and
procurement of equipment for the Salton Sea V Project pursuant to the Salton Sea
V Project  EPC  Contract.  The demand for  arbitration  did not include a stated
claim  amount.  On April 25,  2003,  Salton Sea Power  entered into a settlement
agreement  with Stone & Webster.  The Settlement  Agreement  resulted in a total
payment of $12.1 million from Stone & Webster in the second quarter 2003 and the
arbitration  was  dismissed.  The  settlement  was  recorded  as a $4.5  million
reduction of incremental  capital  expenditures and a $7.6 million  reduction of
incremental  operating  expenses related to legal,  other expenses and equipment
write-offs.

On November 25, 2002,  Vulcan/BN  Geothermal Power Company, Del Ranch, L.P., and
CE Turbo,  LLC entered into a settlement  agreement with Stone & Webster related
to a Demand for  Arbitration  against Stone & Webster for breach of contract and
breach of  warranty  arising  from  deficiencies  in Stone &  Webster's  design,
engineering, construction and procurement of equipment for the CE Turbo Project.
The settlement agreement resulted in a $3.5 million payment from Stone & Webster
which was recorded as a reduction of incremental capital expenditures.

                                  -9-
<PAGE>


Other Commitments and Contingencies
-----------------------------------

CE Generation's geothermal and cogeneration facilities are Qualifying Facilities
("QF") under the Public  Utility  Regulatory  Policies Act of 1978 ("PURPA") and
their  contracts  for  the  sale  of  electricity  are  subject  to  regulations
thereunder.  In order to promote open  competition in the industry,  legislation
has been  proposed in the U.S.  Congress that calls for either a repeal of PURPA
on a  prospective  basis or the  significant  restructuring  of the  regulations
governing the electric industry,  including  sections of PURPA.  Current federal
legislative  proposals would not abrogate,  amend, or modify existing  contracts
with electric  utilities.  The ultimate  outcome of any proposed  legislation is
unknown at this time.

The Power Resources Project, a 200 net MW natural gas-fired cogeneration project
owned by Power  Resources Ltd.  ("Power  Resources"),  an indirect  wholly-owned
subsidiary of CE  Generation,  was a QF under PURPA and sold  electricity to TXU
Generation  Company LP pursuant to a 15-year negotiated power purchase agreement
("the Power Resources  PPA"),  which provided for capacity and energy  payments.
Capacity  and energy  payments in 2003 were $3.7 million per month and 3.6 cents
per kilowatt hour,  respectively.  The Power Resources PPA expired September 30,
2003.  The Power  Resources  Project sold steam to ALON USA, LP ("ALON") under a
15-year agreement that also expired September 30, 2003.

On August 5, 2003, Power Resources  entered into a Tolling  Agreement with ONEOK
Energy Marketing and Trading  Company,  L.P.  ("ONEOK").  Under the terms of the
agreement, Power Resources sells its electricity and capacity to ONEOK for $1.75
per kilowatt-month  plus a variable operating and maintenance fee of $.50 per MW
hour ("MWh"). In addition, ONEOK pays annual turbine start-up costs in an amount
equal to the greater of (i) $3,643 per turbine start-up,  (ii) $939,986 or (iii)
$140 per hour of operation during the year. The agreement  commenced  October 1,
2003 and expires December 31, 2005.

On May 20,  2003,  Salton Sea Power  entered into a Power Sales  Agreement  (the
"Riverside  Power  Sales  Agreement")  with  the City of  Riverside,  California
("Riverside"). Under the terms of the agreement, Salton Sea Power sells up to 20
MW of energy  generated  from Salton Sea V to  Riverside  at $61 per MWh.  Sales
under the agreement commenced June 1, 2003 and will terminate May 31, 2013.

Minerals  LLC  ("Minerals")  contracted  with  Zachry  Construction  Corporation
("Zachry") under a time and materials  contract to do a maximum of $1.32 million
work for the Zinc  Recovery  Project.  Zachry  has  invoiced  Minerals  for $4.7
million of work under this  contract.  Minerals has been unable to  substantiate
Zachry's  invoices.  Zachry  filed a demand for  arbitration  with the  American
Arbitration  Association  (the "AAA") on August 19, 2003 for  collection  of its
claimed  outstanding  invoices.  Although  the AAA has  selected an  arbitration
panel,  neither the AAA nor the panel has  scheduled any hearings on this matter
to date.  Minerals  anticipates that the evidentiary hearing on this matter will
not likely occur prior to the summer of 2004.

5.  Related Party Transactions

On January 29, 2003,  TransAlta purchased El Paso Merchant Energy North American
Company's ("EPME") 50% interest in CE Generation.

Pursuant to a Transaction Agreement dated January 29, 2003, Salton Sea Power and
CE Turbo began  selling  power to a subsidiary of TransAlta on February 12, 2003
based on percentages  of the Dow Jones SP-15 Index.  The  Transaction  Agreement
shall  continue  until the earlier of (a) 30 days  following a written notice of
termination  after  October 1, 2003 or (b) any other  termination  date mutually
agreed to by the parties. No such notice of termination has been given by either
party.  Sales under this agreement  totaled $2.9 million and $8.0 million during
the three-month and nine-month periods ended September 30, 2003, respectively.

Sales to EPME totaled $1.1 million and $4.6 million during the  three-month  and
nine-month periods ended September 30, 2002, respectively.

                                  -10-
<PAGE>


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

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

FORWARD-LOOKING STATEMENTS

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

CRITICAL ACCOUNTING POLICIES

The  preparation of financial  statements and related  disclosures in conformity
with  accounting  principles  generally  accepted in the United States  requires
management to make judgments,  assumptions and estimates that affect the amounts
reported in the Consolidated Financial Statements and accompanying notes. Note 2
to the Company's  Consolidated  Financial  Statements  included in the Company's
Annual  Report on Form 10-K for the year ended  December 31, 2002  describes the
significant  accounting  policies  and methods  used in the  preparation  of the
Consolidated  Financial Statements.  Estimates are used for, but not limited to,
the accounting for the allowance for doubtful accounts, impairment of long-lived
assets and  contingent  liabilities.  Actual  results  could  differ  from these
estimates.

For additional  discussion of the Company's critical  accounting  policies,  see
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  included in the  Company's  Annual Report on Form 10-K for the year
ended December 31, 2002.

RESULTS OF OPERATIONS FOR THE THREE-MONTH  PERIODS ENDED SEPTEMBER 30, 2003
AND 2002

Operating  revenue  increased  $1.5  million or 1.1% to $142.8  million  for the
three-month  period ended  September  30, 2003 from $141.3  million for the same
period in 2002.  The increase  reflects  $3.3  million of higher  revenue at the
company's gas facilities due to $5.6 million of increased energy rates partially
offset by $2.3 million in lower revenue from decreased production as a result of
curtailment  and  maintenance and $1.8 million of lower revenue due to decreased
production  related to an  uncontrollable  force event at the Salton Sea Unit IV
Project  partially offset by higher rates at the geothermal  projects located in
the Imperial Valley in California (the "Imperial Valley Projects").

                                  -11-
<PAGE>

Interest  and other  income  decreased  $1.6  million  to $0.7  million  for the
three-month  period  ended  September  30,  2003 from $2.3  million for the same
period in 2002 due to interest  earned on past due  Southern  California  Edison
("Edison") amounts in 2002.

Fuel expenses increased $1.7 million to $32.1 million for the three-month period
ended  September  30, 2003 from $30.4  million for the same period in 2002.  The
increase was  primarily  due to higher  natural gas prices at the  Company's gas
facilities, partially offset by increased utility curtailment in 2003.

Plant operating  expenses,  which include operating,  maintenance,  resource and
other plant operating expenses,  increased $2.4 million to $33.4 million for the
three-month  period  ended  September  30, 2003 from $31.0  million for the same
period in 2002. The increase was primarily due to an uncontrollable  force event
at the Salton Sea Unit IV Project and timing of other maintenance activities.

General and  administrative  expenses decreased $1.0 million to $1.1 million for
the  three-month  period ended September 30, 2003 from $2.1 million for the same
period in 2002. These costs include administrative services including executive,
financial,  legal, tax and other corporate  functions.  The decrease in 2003 was
primarily due to a reduction in legal costs related to disputes with Edison.

Depreciation  and  amortization  increased $1.8 million to $21.8 million for the
three month  period  ended  September  30, 2003 from $20.0  million for the same
period in 2002.  The increase was  primarily  due to a change in salvage  values
used at the Salton Sea Projects.

Interest  expense  decreased  $1.8 million to $17.2 million for the  three-month
period ended  September 30, 2003 from $19.0 million for the same period in 2002.
The decrease is due to lower outstanding debt balances.

The  provision for income taxes  decreased  $2.0 million to $9.0 million for the
three-month  period  ended  September  30, 2003 from $11.0  million for the same
period  in 2002.  The  effective  tax rate was 23.7% and 26.7% in 2003 and 2002,
respectively.  The lower effective tax rate is due to greater depletion benefits
in 2003.

RESULTS OF OPERATIONS FOR THE NINE-MONTH  PERIODS ENDED  SEPTEMBER 30, 2003
AND 2002

Operating  revenue  increased  $7.0  million or 1.8% to $388.2  million  for the
nine-month  period  ended  September  30, 2003 from $381.2  million for the same
period in 2002.  The increase  reflects $26.0 million due to higher rates at the
Imperial Valley Projects and $15.6 million due to increased  energy rates at the
Company's  gas  facilities  in  2003,  partially  offset  by the  $21.0  million
adjustment to the Edison  provision at the Imperial Valley Projects in the first
quarter of 2002 and $13.6 million in lower revenue from decreased production, at
both the  Imperial  Valley  Projects  and the gas  facilities,  as a  result  of
curtailment and maintenance, in 2003.

Interest  and other  income  decreased  $5.2  million  to $2.0  million  for the
nine-month period ended September 30, 2003 from $7.2 million for the same period
in 2002 due to the interest  earned in 2002 on past due Edison  amounts,  Salton
Sea II Project  business  interruption  revenue and the sale of Saranac emission
credits in 2002.

Fuel expenses  increased $6.1 million to $95.8 million for the nine-month period
ended  September  30, 2003 from $89.7  million for the same period in 2002.  The
increase was  primarily  due to higher  natural gas prices at the  Company's gas
facilities.

Plant operating  expenses,  which include operating,  maintenance,  resource and
other plant operating expenses,  increased $1.7 million to $98.4 million for the
nine-month  period  ended  September  30,  2003 from $96.7  million for the same
period in 2002. The increase was primarily due to the Salton Sea Unit IV repairs
partially  offset by settlement of a warranty  claim with Stone & Webster,  Inc.
("Stone & Webster").

General and  administrative  expenses decreased $1.7 million to $3.2 million for
the  nine-month  period ended  September 30, 2003 from $4.9 million for the same
period in 2002. These costs include administrative services including

                                  -12-
<PAGE>

executive,  financial, legal, tax and other corporate functions. The decrease in
2003 was due to a reduction in legal costs related to disputes with Edison.

Depreciation  and  amortization  increased $2.2 million to $64.6 million for the
nine-month  period  ended  September  30,  2003 from $62.4  million for the same
period in 2002.  The increase was  primarily  due to a change in salvage  values
used at the Salton Sea Projects.

Interest  expense  decreased  $5.0 million to $53.1  million for the  nine-month
period ended  September 30, 2003 from $58.1 million for the same period in 2002.
The decrease is due to lower outstanding debt balances.

The provision for income taxes  decreased  $1.3 million to $18.1 million for the
nine-month  period  ended  September  30,  2003 from $19.4  million for the same
period  in 2002.  The  effective  tax rate was 24.1% and 25.3% in 2003 and 2002,
respectively.  The lower effective tax rate is due to greater depletion benefits
in 2003.

The cumulative  effect of a change in accounting  principle in 2003 reflects the
Company's  adoption of  Statement  of Financial  Accounting  Standards  No. 143,
"Accounting  for Asset  Retirement  Obligations"  ("SFAS  143") as of January 1,
2003. The cumulative effect of initially  applying this statement was recognized
as a cumulative effect of a change in accounting  principle of $2.5 million, net
of tax of $1.6 million, as of January 1, 2003.

If CE  Generation  had adopted the policy as of January 1, 2002,  income  before
cumulative effect of change in accounting principle would have been $0.5 million
lower for the nine-month period ended September 30, 2002 on a proforma basis.

LIQUIDITY AND CAPITAL RESOURCES

Each of CE Generation's direct or indirect  subsidiaries is organized as a legal
entity  separate  and  apart  from CE  Generation  and its  other  subsidiaries.
Pursuant to separate project financing agreements, the assets of each subsidiary
(excluding  PRL  (beginning  September  30,  2003)  and  Yuma)  are  pledged  or
encumbered to support or otherwise provide the security for their own project or
subsidiary debt. It should not be assumed that any asset of any subsidiary of CE
Generation  will be available to satisfy the obligations of CE Generation or any
of its other subsidiaries;  provided,  however,  that unrestricted cash or other
assets which are available for  distribution  may, subject to applicable law and
the terms of financing arrangements for such parties, be advanced,  loaned, paid
as  dividends  or otherwise  distributed  or  contributed  to CE  Generation  or
affiliates thereof. "Subsidiary" means all of CE Generation's direct or indirect
subsidiaries  (1) owning  direct or indirect  interests in the  Imperial  Valley
Projects  (including the Salton Sea Projects and the Partnership  Projects),  or
(2) owning  direct  interests  in the  subsidiaries  that own  interests  in the
foregoing  projects,  the Saranac  Project,  a 240 net megawatt  ("MW")  natural
gas-fired  cogeneration  facility  owned by Saranac  Energy  Company,  Inc.,  an
indirect  wholly-owned  subsidiary  of CE  Generation,  and the Power  Resources
Project,  a 200 net MW natural  gas-fired  cogeneration  project  owned by Power
Resources Ltd. ("Power Resources"),  an indirect  wholly-owned  subsidiary of CE
Generation.

CE Generation  generated  cash flows from  operations of $134.5  million for the
nine-month  period ended September 30, 2003 compared with $157.7 million for the
same period in 2002.  The decrease was  primarily due to the receipt of past due
balances from Edison in 2002 and changes in working capital in 2003.

Cash flow used in  investing  activities  was $13.8  million for the  nine-month
period ended  September  30, 2003 and included a $4.5 million  reduction  due to
recoveries from the Stone & Webster settlement.  Cash used was $26.6 million for
the nine-month  period ended September 30, 2002.  Capital  expenditures  are the
primary component of investing activities.

Cash flow used in  financing  activities  was $71.8  million for the  nine-month
period ended September 30, 2003 compared with $100.9 million for the same period
in 2002. The changes in cash flows from financing  activities  primarily reflect
the funding of debt service reserve accounts and distributions to owners.

                                  -13-
<PAGE>

Due to reduced  liquidity,  Edison failed to pay approximately $119 million owed
under the Power Purchase Agreements with the Imperial Valley Projects (excluding
the  Salton  Sea V and CE Turbo  Projects)  for power  delivered  in the  fourth
quarter  2000  and the  first  quarter  2001.  Due to  Edison's  failure  to pay
contractual obligations,  the Imperial Valley Projects (excluding the Salton Sea
V and CE Turbo Projects) had  established an allowance for doubtful  accounts of
approximately $21 million as of December 31, 2001.

The final payment of the past due amounts by Edison was received  March 1, 2002.
Following  the  receipt of  Edison's  final  payment of past due  balances,  the
Imperial Valley Projects released the remaining allowance for doubtful accounts.

Edison has disputed a portion of the settlement  agreement and has failed to pay
approximately  $3.9  million of  capacity  bonus  payments  for the months  from
October  2001  through May 2002.  On December  10,  2001,  the  Imperial  Valley
Projects (excluding the Salton Sea I, Salton Sea V, and CE Turbo Projects) filed
a lawsuit against Edison in California's  Imperial County Superior Court seeking
a court order  requiring  Edison to make the required  capacity  bonus  payments
under  the Power  Purchase  Agreements.  Due to  Edison's  failure  to pay these
contractual  obligations,  the Imperial Valley Projects established an allowance
for doubtful accounts of approximately $2.7 million as of December 31, 2002.  In
connection with the June 11, 2003 settlement  discussed  below,  the receivables
associated with this allowance were written off during 2003.

On March 25,  2002,  Salton Sea II's 10 MW turbine went out of service due to an
uncontrollable  force event. Such  uncontrollable  force event ended, and Salton
Sea II returned to service, on December 17, 2002. Edison failed to recognize the
uncontrollable  force  event and as such did not pay amounts  otherwise  due and
owing and  improperly  derated  Salton  Sea II from 15 MW to 12.5 MW,  under the
Salton Sea II Power Purchase  Agreement.  On January 29, 2003,  Salton Sea Power
Generation,  L.P., owner of Salton Sea II, served a complaint on Edison for such
unpaid amounts and to rescind such deration.

On June 11, 2003,  the Imperial  Valley  Projects  (excluding  the Salton Sea I,
Salton Sea V and CE Turbo  Projects)  entered into a settlement  agreement  with
Edison.  The settlement,  which relates to the capacity bonus payment and Salton
Sea II uncontrollable force event disputes,  provides for an $800,000 settlement
payment  from  Edison,  payment of amounts  previously  withheld for the Unit II
deration and the recission of such deration. The amounts previously withheld for
the Unit II deration were received in the second  quarter of 2003.  The $800,000
settlement  payment  is  contingent  upon  approval  by  the  California  Public
Utilities Commission.

On July 10,  2003,  Salton Sea IV's 34 MW turbine  went out of service due to an
uncontrollable  force event. Such  uncontrollable  force event ended, and Salton
Sea IV returned to service on September 17, 2003. Edison failed to recognize the
uncontrollable  force event and as such has not paid amounts  otherwise  due and
owing under the Salton Sea IV Power Purchase Agreement totaling $1.7 million. On
September 19, 2003 and October 17, 2003, Salton Sea Power Generation, L.P., with
Fish Lake  Power  Company,  owner of Salton  Sea IV served  notices  of error on
Edison for such unpaid amounts. As a result, the Company has set up a reserve of
$1.4 million for capacity payments as of September 30, 2003.

As a result of  uncertainties  related  to  Edison,  the  letter of credit  that
supported the debt service  reserve fund at Salton Sea Funding  Corporation  had
not been extended  beyond its then existing July 2004  expiration  date,  and as
such cash distributions were not available to CE Generation until the Salton Sea
Funding Corporation debt service reserve fund of approximately $65.4 million had
been  funded or the  letter of credit  had been  extended  beyond  its July 2004
expiration  date or replaced.  At December 31, 2002, the fund had a cash balance
of $46.3 million.

In May 2003,  the previous  $65.4 million  Salton Sea Funding  Corporation  debt
service  reserve letter of credit was replaced by a $32.7 million  TransAlta USA
Inc. ("TransAlta"),  a wholly owned subsidiary of TransAlta Corporation,  letter
of credit  which  expires May 30, 2004 and a $32.7  million  MidAmerican  Energy
Holdings Company ("MidAmerican") letter of credit which expires June 6, 2006.

                                 -14-
<PAGE>

These new Salton Sea Funding  Corporation debt service reserve letters of credit
permitted the cash,  which was  previously  restricted,  to be included in funds
distributed to CE Generation on May 29, 2003. During the second quarter of 2003,
CE Generation distributed a total of $65.0 million to MidAmerican and TransAlta.

Stone & Webster
---------------

The Salton Sea V Project was constructed by Stone & Webster,  pursuant to a date
certain,  fixed-price,  turnkey  engineering,   procure,  construct  and  manage
contract (the "Salton Sea V Project EPC Contract"). On March 7, 2002, Salton Sea
Power L.L.C. ("Salton Sea Power"), the owner of the Salton Sea V Project,  filed
a Demand for  Arbitration  against  Stone & Webster for breach of  contract  and
breach of  warranty  arising  from  deficiencies  in Stone &  Webster's  design,
engineering,  construction  and  procurement  of equipment  for the Salton Sea V
Project  pursuant  to the  Salton  Sea V Project  EPC  Contract.  The demand for
arbitration did not include a stated claim amount. On April 25, 2003, Salton Sea
Power entered into a settlement  agreement with Stone & Webster.  The Settlement
Agreement  resulted in a total  payment of $12.1 million from Stone & Webster in
the second quarter of 2003 and the arbitration was dismissed. The settlement was
recorded as a $4.5 million reduction of incremental  capital  expenditures and a
$7.6 million reduction of incremental operating expenses related to legal, other
expenses and equipment write-offs.

The CE Turbo  Project  was  constructed  by Stone & Webster,  pursuant to a date
certain,  fixed-price,  turnkey  engineering,   procure,  construct  and  manage
contract  (the "CE Turbo  Project EPC  Contract").  On March 7, 2002,  Vulcan/BN
Geothermal Power Company,  Del Ranch,  L.P., and CE Turbo LLC, the owners of the
CE Turbo  Project,  filed a Demand for  Arbitration  against Stone & Webster for
breach of contract and breach of warranty  arising from  deficiencies in Stone &
Webster's design, engineering, construction and procurement of equipment for the
CE Turbo Project pursuant to the CE Turbo Project's EPC Contract.

On November 25, 2002,  Vulcan/BN  Geothermal Power Company, Del Ranch, L.P., and
CE Turbo,  LLC entered into a settlement  agreement with Stone & Webster related
to a Demand for  Arbitration  against Stone & Webster for breach of contract and
breach of  warranty  arising  from  deficiencies  in Stone &  Webster's  design,
engineering, construction and procurement of equipment for the CE Turbo Project.
The settlement agreement resulted in a $3.5 million payment from Stone & Webster
which was recorded as a reduction of incremental capital expenditures.

The Power  Resources  Project was a Qualifying  Facility ("QF") under the Public
Utility  Regulatory  Policies Act of 1978 ("PURPA") and sold  electricity to TXU
Generation  Company LP pursuant to a 15 year negotiated power purchase agreement
("the Power Resources  PPA"),  which provided for capacity and energy  payments.
Capacity and energy payments,  in 2003 were $3.7 million per month and 3.6 cents
per  kilowatt  ("kW")  hour,  respectively.  The  Power  Resources  PPA  expired
September  30,  2003.  The Power  Resources  Project  sold steam to ALON USA, LP
("ALON") under a 15-year agreement that also expired September 30, 2003.

On August 5, 2003,  Power  Resources  Ltd.  ("Power  Resources")  entered into a
Tolling  Agreement  with  ONEOK  Energy  Marketing  and  Trading  Company,  L.P.
("ONEOK").  Under  the  terms  of  the  agreement,  Power  Resources  sells  its
electricity  and  capacity  to ONEOK  for  $1.75 per  kW-month  plus a  variable
operating and  maintenance fee of $.50 per MW hour ("MWh").  In addition,  ONEOK
pays  annual  turbine  start-up  costs in an amount  equal to the greater of (i)
$3,643 per turbine  start-up,  (ii) $939,986 or (iii) $140 per hour of operation
during the year. The agreement  commenced  October 1, 2003 and expires  December
31, 2005.

On May 20, 2003,  Salton Sea Power entered into a Power Sales Agreement with the
City of Riverside,  California ("Riverside").  Under the terms of the agreement,
Salton  Sea Power  sells up to 20 MW of energy  generated  from  Salton Sea V to
Riverside at $61 per MWh.  Sales under the agreement  commenced June 1, 2003 and
will terminate May 31, 2013.

Minerals  LLC  ("Minerals")  contracted  with  Zachry  Construction  Corporation
("Zachry") under a time and materials  contract to do a maximum of $1.32 million
work for the Zinc  Recovery  Project.  Zachry  has  invoiced  Minerals  for $4.7
million of work under this  contract.  Minerals has been unable to  substantiate
Zachry's  invoices.  Zachry  filed a demand for  arbitration  with the  American
Arbitration  Association  (the "AAA") on August 19, 2003 for  collection  of its
claimed  outstanding  invoices.  Although  the AAA has  selected an  arbitration
panel, neither the AAA nor the panel has scheduled any hearings on this matter

                                  -15-
<PAGE>

to date.  Minerals  anticipates that the evidentiary hearing on this matter will
not likely occur prior to the summer of 2004.

RELATED PARTY TRANSACTIONS

On January 29, 2003,  TransAlta purchased El Paso Merchant Energy North American
Company's ("EPME") 50% interest in CE Generation.

Pursuant to a Transaction Agreement dated January 29, 2003, Salton Sea Power and
CE Turbo LLC began  selling  power to a subsidiary  of TransAlta on February 12,
2003  based  on  percentages  of the Dow  Jones  SP-15  Index.  The  Transaction
Agreement  shall  continue  until the earlier of (a) 30 days following a written
notice of termination  after October 1, 2003 or (b) any other  termination  date
mutually agreed to by the parties.  No such notice of termination has been given
by either  party.  Sales  under this  agreement  totaled  $2.9  million and $8.0
million  during the  three-month  and  nine-month  periods  September  30, 2003,
respectively.

Sales to EPME totaled $1.1 million and $4.6 million during the  three-month  and
nine-month periods ended September 30, 2002, respectively.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

There  have  been  no  material  changes  in  the  contractual  obligations  and
commercial  commitments from the information provided in Item 7 of the Company's
Annual  Report on Form 10-K for the year ended  December  31, 2002 other than as
discussed in this "Liquidity and Capital Resources" section.

                                  -16-
<PAGE>


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

For  quantitative  and  qualitative  disclosures  about market risk affecting CE
Generation,  see Item 7A "Qualitative and Quantitative  Disclosures About Market
Risk" of CE Generation's  Annual Report on Form 10-K for the year ended December
31, 2002.  Other than the Power  Resources and Riverside  contract  changes,  CE
Generation's  exposure to market risk has not changed  materially since December
31, 2002.

Item 4.  Controls and Procedures.

An evaluation was performed under the supervision and with the  participation of
the  Company's  management,  including  its chief  executive  officer  and chief
financial  officer,  regarding the  effectiveness of the design and operation of
the Company's  disclosure  controls and procedures (as defined in Rule 13a-15(e)
promulgated  under the  Securities  and Exchange Act of 1934,  as amended) as of
September  30,  2003.  Based  on  that  evaluation,  the  Company's  management,
including the chief  executive  officer and chief financial  officer,  concluded
that the Company's disclosure controls and procedures were effective. There have
been no  significant  changes in the  Company's  internal  controls  or in other
factors that could significantly affect internal controls.

                                  -17-
<PAGE>


                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

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

Item 2.  Changes in Securities and Use of Proceeds.

Not applicable.

Item 3.  Defaults Upon Senior Securities.

Not applicable.

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

Not applicable.

Item 5.  Other Information.

Not applicable.

Item 6.  Exhibits and Reports on Form 8-K.

(a)      Exhibits:

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

(b)      Reports on Form 8-K:

         None.



                                  -18-
<PAGE>


                                   SIGNATURES


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


                                                  CE GENERATION, LLC
                                                  ------------------
                                                     (Registrant)



Date:  November 6, 2003                         /s/  Wayne F. Irmiter
                                             ----------------------------
                                                    Wayne F. Irmiter
                                              Vice President & Controller


                                  -19-
<PAGE>


                                  EXHIBIT INDEX

Exhibit No.                  Description of Exhibit
-----------                  ----------------------

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

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

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

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


                                  -20-