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

                                    FORM 10-Q

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

                  For the quarterly period ended March 31, 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 May 12, 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..............................................10
Item 3.    Quantitative and Qualitative Disclosures About Market Risk.........14
Item 4.    Controls and Procedures............................................14

                           PART II - OTHER INFORMATION

Item 1.    Legal Proceedings..................................................15
Item 2.    Changes in Securities and Use of Proceeds..........................15
Item 3.    Defaults Upon 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
CERTIFICATIONS................................................................17
EXHIBIT INDEX.................................................................19

                                      -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 March  31,  2003,  and the  related
consolidated  statements of operations and other  comprehensive  income and cash
flows for the three-month periods ended March 31, 2003 and 2002. 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, 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  condensed  financial  statements,  in 2003  the
Company changed its accounting policy for asset retirement obligations.



/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP
Omaha, Nebraska
May 8, 2003

                                      -3-
<PAGE>

                       CE GENERATION, LLC AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                      AS OF
                                                           --------------------------
                                                            MARCH 31,     DECEMBER 31,
                                                              2003            2002
                                                           -----------    ------------
                                                            (UNAUDITED)
                                     ASSETS
<S>                                                        <C>            <C>
Current assets:
  Cash and cash equivalents ............................   $    78,518    $    43,706
  Restricted cash ......................................        60,386         60,238
  Accounts receivable, net .............................        60,773         63,554
  Prepaid expenses and other current assets ............         4,815          9,943
  Inventories ..........................................        25,296         25,049
  Due from affiliates ..................................           897              -
                                                           -----------    -----------
    Total current assets ...............................       230,685        202,490
                                                           -----------    -----------
Restricted cash ........................................        15,124         14,299
Properties, plants, contracts and equipment, net .......     1,224,480      1,234,408
Excess of cost over fair value of net assets acquired ..       265,897        265,897
Note receivable from related party .....................       137,789        137,789
Deferred financing charges and other assets ............         9,750         10,153
                                                           -----------    -----------
TOTAL ASSETS ...........................................   $ 1,883,725    $ 1,865,036
                                                           ===========    ===========

                         LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
  Accounts payable .....................................   $     4,079    $       667
  Accrued interest .....................................        16,748          3,382
  Interest rate swap liability .........................        19,655         21,023
  Other accrued liabilities ............................        39,112         36,551
  Due to affiliates.....................................             -            406
  Current portion of long-term debt ....................        82,038         86,656
                                                           -----------    -----------
    Total current liabilities ..........................       161,632        148,685
                                                           -----------    -----------
Project loans ..........................................       117,049        122,573
Salton Sea notes and bonds .............................       463,591        463,591
Senior secured bonds ...................................       338,400        338,400
Deferred income taxes ..................................       248,388        248,033
Other long-term liabilities ............................         7,591          1,480
                                                           -----------    -----------
  Total liabilities ....................................     1,336,651      1,322,762
                                                           -----------    -----------

Minority interest ......................................        52,043         52,379

Commitments and contingencies (Notes 4 and 5)

Members' equity ........................................       504,102        499,748
Accumulated other comprehensive loss, net ..............        (9,071)        (9,853)
                                                           -----------    -----------
  Total members' equity ................................       495,031        489,895
                                                           -----------    -----------
TOTAL LIABILITIES AND MEMBERS' EQUITY ..................   $ 1,883,725    $ 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
                                                                       ENDED MARCH 31,
                                                                    ----------------------
                                                                      2003         2002
                                                                    ---------    ---------
                                                                         (UNAUDITED)
<S>                                                                 <C>          <C>
REVENUE:
  Operating revenue .............................................   $ 122,005    $ 125,245
  Interest and other income .....................................         723        2,165
                                                                    ---------    ---------
    Total revenue ...............................................     122,728      127,410
                                                                    ---------    ---------
COSTS AND EXPENSES:
  Fuel ..........................................................      33,463       29,153
  Plant operations ..............................................      32,219       31,153
  General and administrative ....................................       1,304        1,125
  Depreciation and amortization .................................      21,157       20,808
  Interest expense ..............................................      18,024       19,545
                                                                    ---------    ---------
    Total costs and expenses ....................................     106,167      101,784
                                                                    ---------    ---------
INCOME BEFORE PROVISION FOR INCOME TAXES ........................      16,561       25,626
  Provision for income taxes ....................................       3,995        5,958
                                                                    ---------    ---------
INCOME BEFORE MINORITY INTEREST .................................      12,566       19,668
  Minority interest .............................................       5,745        5,326
                                                                    ---------    ---------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE       6,821       14,342
  Cumulative effect of change in accounting
    principle, net of tax (Note 2) ..............................      (2,467)          --
                                                                    ---------    ---------
NET INCOME ......................................................   $   4,354    $  14,342
                                                                    =========    =========

OTHER COMPREHENSIVE INCOME:
  Unrealized gain on cash flow hedges, net of tax ...............         782        1,191
                                                                    ---------    ---------
COMPREHENSIVE INCOME ............................................   $   5,136    $  15,533
                                                                    =========    =========
</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>

                                                                  THREE MONTHS
                                                                ENDED MARCH 31,
                                                             ---------------------
                                                               2003        2002
                                                             --------    ---------
                                                                  (UNAUDITED)
<S>                                                          <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income .............................................   $  4,354    $  14,342
  Adjustments to reconcile net cash flows from
    operating activities:
    Cumulative effect of change in accounting
      principle, net of tax ..............................      2,467           --
    Depreciation and amortization ........................     21,157       20,808
    Provision for deferred income taxes ..................      1,569       10,656
    Distributions to minority interest in excess of income       (492)        (579)
    Changes in other items:
      Accounts receivable ................................      2,781       75,369
      Due from affiliates ................................     (1,303)        (765)
      Accounts payable and other accrued liabilities .....     19,458        5,539
    Other ................................................      6,199       (3,995)
                                                             --------    ---------
      Net cash flows from operating activities ...........     56,190      121,375
                                                             --------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures ...................................    (10,263)      (6,323)
  (Increase) decrease in restricted cash .................       (825)       1,720
                                                             --------    ---------
    Net cash flows from investing activities .............    (11,088)      (4,603)
                                                             --------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of project loans .............................    (10,142)      (8,966)
  (Increase) decrease in restricted cash .................       (148)         166
                                                             --------    ---------
    Net cash flows from financing activities .............    (10,290)      (8,800)
                                                             --------    ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS ................     34,812      107,972
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD .........     43,706       34,870
                                                             --------    ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ...............   $ 78,518    $ 142,842
                                                             ========    =========

SUPPLEMENTAL DISCLOSURE:
  Interest paid, net of amounts capitalized ..............   $  3,503    $   4,678
                                                             ========    =========
  Income taxes paid ......................................   $    216    $     212
                                                             ========    =========
</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 March 31, 2003 and the results of operations
and cash flows for the  three-month  periods ended March 31, 2003 and 2002.  The
results of operations for the  three-month  periods ended March 31, 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 audited  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 have been reclassified in
order to conform to 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 SFAS 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. The Company recorded  liabilities  pursuant to SFAS 143
as of January 1, 2003.  The  Company  used an  expected  cash flow  approach  to
measure the obligations.  The following  liabilities  reflect amounts as if this
statement had been applied during all periods (in thousands):

                                         MARCH 31,   DECEMBER 31,
                                           2003          2002
                                         ---------   ------------
                                                      (PROFORMA)
             Plant abandonment .......     $3,856      $3,798
             Landfill abandonment ....     $3,735      $3,663

Following  is a  reconciliation  of net income as  originally  reported  for the
three-month  periods  March 31, 2003 and 2002, to adjusted net income as if this
statement had been applied to all periods (in thousands):

                                                             THREE MONTHS
                                                            ENDED MARCH 31,
                                                          ------------------
                                                           2003       2002
                                                          ------    --------

  Reported net income ................................    $4,354    $ 14,342
  Accretion and amortization expense .................        --        (163)
  Cumulative effect of change in accounting principle      2,467          --
                                                          ------    --------
  Adjusted net income ................................    $6,821    $ 14,179
                                                          ======    ========

                                      -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 as of March 31,
2003 and December 31, 2002 (in thousands):

<TABLE>
<CAPTION>

                                           MARCH 31, 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       $207,961        $338,716         $203,685
     Patented Technology ........       46,290         15,867          46,290           15,385
                                      --------       --------        --------         --------
       Total ....................     $385,006       $223,828        $385,006         $219,070
                                      ========       ========        ========         ========
</TABLE>

Amortization  expense on  acquired  intangible  assets was $4.8  million for the
three-month periods ended March 31, 2003 and 2002,  respectively.  CE Generation
expects  amortization  expense on acquired intangible assets to be $13.9 million
for the  remainder  of 2003 and $15.8  million  for each of the four  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 $3.1 million and $2.7 million as of March 31, 2003 and
December 31, 2002, respectively.

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 has
failed to  recognize  the  uncontrollable  force  event and as such has not paid
amounts otherwise due and owing and has 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. served a complaint on Edison for such
unpaid amounts and to rescind such deration.

                                      -8-
<PAGE>

As a result of  uncertainties  related  to  Edison,  the  letter of credit  that
supports the debt service reserve fund at Salton Sea Funding Corporation has not
been extended  beyond its current July 2004  expiration  date, and as such, cash
distributions  are not available to CE  Generation  until the Salton Sea Funding
Corporation  debt service reserve fund of  approximately  $65.4 million has been
funded or the letter of credit has been extended beyond its July 2004 expiration
date or replaced. The fund had a cash balance of $46.4 million and $46.3 million
as of March 31, 2003 and December 31, 2002, respectively.

Other Commitments
-----------------

CE Generation's geothermal and cogeneration facilities are qualifying facilities
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 is a  Qualifying  Facility  under  PURPA and sells
electricity to TXU Generation  Company LP pursuant to a 15 year negotiated power
purchase  agreement ("the Power Resources PPA"), which provides for capacity and
energy payments.  Capacity payments and energy payments,  which in 2003 are $3.7
million  per  month and 3.6 cents per  kilowatt  hour,  respectively.  The Power
Resources PPA expires in September 2003. The Power Resources Project sells steam
to ALON  USA,  LP  ("ALON")  under a  15-year  agreement.  As long as the  Power
Resources Project meets its supply obligations,  ALON is required to purchase at
least the minimum amount of steam per year required to allow the Power Resources
Project to maintain its Qualifying Facility status under PURPA.

Saranac Power Partners,  L.P., a subsidiary of the Company formed to build,  own
and operate  natural gas fired  combined  cycle  cogeneration  facilities,  is a
Qualifying  Facility under PURPA and has a contract to purchase natural gas from
a third  party  for its  cogeneration  facility  for a period of 15 years for an
amount up to 51,000  MMBtus per day which  expires  in 2009.  The price for such
deliveries is a stated rate, escalated annually at a rate of 4%.

The Salton Sea V Project is obligated to supply the  electricity  demands of the
Zinc Recovery  Project,  which  commenced  operations  in December  2002, at the
market  rates  available to the Salton Sea V Project,  less the wheeling  costs.
Salton Sea V Project expects to sell up to 22 MW of its output to Minerals.  The
remainder  of the  Salton  Sea V Project  output is sold  through  other  market
transactions.

5.  RELATED PARTY TRANSACTIONS

On January 29, 2003, TransAlta USA Inc. ("TransAlta"), a wholly owned subsidiary
of TransAlta Corporation, purchased El Paso Merchant Energy's 50% interest in CE
Generation.

Pursuant to a Transaction Agreement dated January 29, 2003, Salton Sea Power and
CE Turbo  began  selling  power to  TransAlta  on  February  12,  2003  based on
percentages of the Dow Jones SP-15 Index.  Such agreement will expire on October
31,  2003.  Sales to TransAlta  totaled  $2.3 million and $0 million  during the
three-month periods March 31, 2003 and 2002, respectively.

As of March 31, 2003, accounts  receivable from TransAlta,  included in accounts
receivable,  net, were $2.3 million.  At December 31, 2002,  accounts receivable
from El Paso Merchant Energy,  included in accounts  receivable,  net, were $1.4
million.

                                      -9-
<PAGE>

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

The following is  management's  discussion  and analysis of certain  significant
factors which have affected the financial condition and results of operations of
CE  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 MARCH 31, 2003 AND 2002

Operating revenue decreased $3.2 million or 2.6% to $122.0 million for the three
months ended March 31, 2003 from $125.2 million for the same period in 2002. The
decrease reflects the $21.0 million adjustment to the Southern California Edison
("Edison")  provision at the Imperial  Valley  Projects in the first  quarter of
2002, offset by $9.6 million due to higher rates at the Imperial Valley Projects
and $7.7 million due to increased  energy rates at the Gas Projects in the first
quarter 2003.

Interest and other income  decreased  $1.5 million to $0.7 million for the three
months ended March 31, 2003 from $2.2 million for the same period in 2002 due to
the interest earned in 2002 on past due Edison amounts.

                                      -10-
<PAGE>

Fuel  expenses  increased  $4.3 million or 14.7% to $33.5  million for the three
months ended March 31, 2003 from $29.2 million for the same period in 2002.  The
increase  was  primarily  due to  increased  natural gas prices at our gas fired
power projects.

Plant operating  expenses,  which include operating,  maintenance,  resource and
other plant operating expenses,  increased $1.0 million or 3.2% to $32.2 million
for the three months ended March 31, 2003 from $31.2 million for the same period
in 2002. The increase was primarily due to timing of maintenance activities.

General and  administrative  expenses  increased  $0.2  million or 18.2% to $1.3
million for the three months ended March 31, 2003 from $1.1 million for the same
period in 2002.  These  costs  include  administrative  services  provided to CE
Generation,  including  executive,  financial,  legal,  tax and other  corporate
functions. The increase in 2003 was primarily due to legal costs.

Depreciation  and  amortization  increased $0.4 million or 1.9% to $21.2 million
for the three months ended March 31, 2003 from $20.8 million for the same period
in 2002.

Interest expense,  decreased $1.5 million or 7.7% to $18.0 million for the three
months ended March 31, 2003 from $19.5 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 or 33.3% to $4.0 million
for the three  months ended March 31, 2003 from $6.0 million for the same period
in 2002.  The  effective  tax  rate  was  24.1%  and  23.2%  in 2003  and  2002,
respectively.

The  cumulative  effect of change in  accounting  principle in 2003 reflects the
Company's adoption of Statement of Financial  Accounting  Standards ("SFAS") 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 $0.2 million
lower in 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  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  other than Magma Power
Company and Salton Sea Power  Company),  or (2) owning  direct  interests in the
subsidiaries that own interests in the foregoing  projects,  the Saranac Project
and the Power Resources Project.

CE  Generation  generated  cash flows from  operations  of $56.2 million for the
three  months  ended March 31, 2003  compared  with $121.4  million for the same
period in 2002.  The  decrease  was  primarily  due to the  receipt  of past due
balances  from Edison in 2002  partially  offset by higher  costs and changes in
working capital in 2003.

Cash flow used in investing  activities  was $11.1  million for the three months
ended March 31, 2003 compared with cash used of $4.6 million for the same period
in 2002. Capital expenditures are the primary component of investing activities.

                                      -11-
<PAGE>

Cash flow used in financing  activities  was $10.3  million for the three months
ended March 31, 2003 compared with $8.8 million for the same period in 2002. The
changes in cash flows from financing  activities primarily reflect the scheduled
debt repayments.

Edison is a public  utility  primarily  engaged  in the  business  of  supplying
electric  energy  to  retail  customers  in  Central  and  Southern  California,
excluding  Los  Angeles.  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 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 have
established an allowance for doubtful accounts of approximately $3.1 million.

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 has failed to recognize
the  uncontrollable  force event and as such has not paid amounts  otherwise due
and owing and has 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. served a complaint on Edison for such unpaid amounts and
to rescind such deration.

As a result of  uncertainties  related  to  Edison,  the  letter of credit  that
supports the debt service reserve fund at Salton Sea Funding Corporation has not
been extended  beyond its current July 2004  expiration  date, and as such, cash
distributions  are not available to CE  Generation  until the Salton Sea Funding
Corporation  debt service reserve fund of  approximately  $65.4 million has been
funded or the letter of credit has been extended beyond its July 2004 expiration
date or replaced.  The fund has a cash balance of $46.4  million as of March 31,
2003.

The Salton Sea V and CE Turbo Projects were constructed by Stone & Webster, Inc.
(formerly Stone & Webster Engineering Corporation), a wholly-owned subsidiary of
the Shaw Group ("Stone and Webster"),  pursuant to a date certain,  fixed-price,
turnkey engineering,  procure, construct and manage contracts (collectively, the
"Salton Sea V and CE Turbo Projects EPC  Contracts").  On March 7, 2002,  Salton
Sea Power,  Vulcan/BN  Geothermal Power Company,  Del Ranch, L.P., and CE Turbo,
the  owners  of the  Salton  Sea V and CE Turbo  Projects,  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 and CE Turbo
Projects pursuant to the Salton Sea V and CE Turbo Projects' EPC Contracts.

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.  The
Settlement Agreement resulted in a $3.5 million payment from Stone & Webster.

On April 25, 2003,  Salton Sea Power  entered into a settlement  agreement  with
Stone & Webster.  The  Settlement  Agreement  will result in a total  payment of
$12.1  million  from  Stone &  Webster  in the  second  quarter  of 2003 and the
arbitration will be dismissed.

                                      -12-
<PAGE>

RELATED PARTY TRANSACTIONS

On January 29, 2003, TransAlta USA Inc. ("TransAlta"), a wholly owned subsidiary
of TransAlta Corporation,  purchased El Paso's Merchant Energy's 50% interest in
CE Generation.

Pursuant to a Transaction Agreement dated January 29, 2003, Salton Sea Power and
CE Turbo  began  selling  power to  TransAlta  on  February  12,  2003  based on
percentages of the Dow Jones SP-15 Index.  Such agreement will expire on October
31,  2003.  Sales to TransAlta  totaled  $2.2 million and $0 million  during the
three months ended March 31, 2003 and 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.

                                      -13-

<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.  CE  Generation's  exposure to market risk has not changed  materially
since December 31, 2002.

ITEM 4.  CONTROLS AND PROCEDURES.

CE Generation,  LLC's chief executive  officer and chief financial  officer have
established  "disclosure  controls and procedures" (as defined in Rule 13a-14(c)
and Rule  15d-14(c) of the  Securities  and Exchange Act of 1934) to ensure that
material  information of the companies and their  subsidiaries  is made known to
them by others within the  respective  companies.  Under their  supervision,  an
evaluation of the disclosure  controls and  procedures  was performed  within 90
days prior to the filing of this quarterly report. Based on that evaluation, the
above-mentioned  officers have concluded that, as of the date of the evaluation,
the disclosure controls and procedures were operating effectively. Additionally,
the above-mentioned officers find that there have been no significant changes in
internal controls,  or in other factors that could significantly affect internal
controls, subsequent to the date of that evaluation.

                                      -14-
<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.

                                      -15-

<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:  May 12, 2003            /s/  Wayne F. Irmiter
                               ---------------------------
                                    Wayne F. Irmiter
                               Vice President & Controller

                                      -16-
<PAGE>


                     SECTION 302 CERTIFICATION FOR FORM 10-Q
CERTIFICATIONS
--------------

I, Edward J. Heinrich, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CE Generation, LLC;

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

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

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

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

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

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

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

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

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

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

Date:  May 12, 2003
                                 /s/ Edward J. Heinrich
                               --------------------------
                                     Edward J. Heinrich
                                         President
                               (chief executive officer)

                                      -17-

<PAGE>

                     SECTION 302 CERTIFICATION FOR FORM 10-Q
CERTIFICATIONS
--------------

I, Wayne F. Irmiter, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CE Generation, LLC;

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

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

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

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

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

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

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

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

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

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

Date:  May 12, 2003

                                    /s/ Wayne F. Irmiter
                                -----------------------------
                                       Wayne F. Irmiter
                                Vice President and Controller
                                 (chief accounting officer)

                                      -18-
<PAGE>

                                  EXHIBIT INDEX
Exhibit No.
-----------

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

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

                                      -19-