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

                                    FORM 10-Q


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

                  For the quarterly period ended June 30, 2006

                                       or

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

  For the transition period from                     to
                                 -------------------    -------------------

                           Commission File No. 0-13510


            ZOND-PANAERO WINDSYSTEM PARTNERS I, A CALIFORNIA LIMITED
                                  PARTNERSHIP

State or other jurisdiction of incorporation or organization: California

I.R.S. Employer Identification No: 77-0035358

Address of principal executive offices: 1221 Lamar Street, Suite 1600, Houston,
Texas

Zip Code: 77010

Registrant's telephone number, including area code: (713) 853-0530


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 a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer         Accelerated Filer        Non-Accelerated Filer X

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES NO X


                                       1

<PAGE>

                       ZOND-PANAERO WINDSYSTEM PARTNERS I,
                        A CALIFORNIA LIMITED PARTNERSHIP



                                TABLE OF CONTENTS


                                     PART I
                              FINANCIAL INFORMATION

Item 1. Financial Statements

   Condensed Balance Sheets at June 30, 2006 (Unaudited) and December 31, 2005.

   Unaudited Condensed Statements of Operations for the six months ended June
   30, 2006 and June 30, 2005.

   Unaudited Condensed Statements of Operations for the three months ended June
   30, 2006 and June 30, 2005.

   Condensed Statements of Changes in Partners' Capital (Deficit) for the six
   months ended June 30, 2006 (Unaudited) and for the year ended December 31,
   2005.

   Unaudited Condensed Statements of Cash Flows for the six months ended June
   30, 2006 and June 30, 2005.

   Notes to Unaudited Condensed Financial Statements.

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4. Controls and Procedures

                                     PART II
                                OTHER INFORMATION


Item 3. Defaults Upon Senior Securities

Item 5. Other Information

Item 6. Exhibits


                                       2
<PAGE>
Item 1. FINANCIAL STATEMENTS

                       ZOND-PANAERO WINDSYSTEM PARTNERS I,
                        A CALIFORNIA LIMITED PARTNERSHIP
                            CONDENSED BALANCE SHEETS
                             (Dollars in thousands)

<TABLE>
<CAPTION>
<S>                                                       <C>                         <C>

                                                               June 30, 2006             December 31, 2005
                                                          ------------------------    ------------------------
                                                                (Unaudited)
 Assets
 Current assets:
   Cash and cash equivalents                               $                  818      $                  843
   Accounts receivable from related party                                     609                         354
   Other current assets                                                        16                          45

                                                          ------------------------    ------------------------
 Total current assets                                                       1,443                       1,242
                                                          ------------------------    ------------------------

 Property, plant and equipment - assets held for sale
   Buildings                                                                   98                          98
   Plant and equipment                                                     49,561                      49,561
   Less - accumulated depreciation                                        (49,365)                    (49,353)
                                                          ------------------------    ------------------------
 Property, plant and equipment, net - assets held
   for sale                                                                   294                         306
                                                          ------------------------    ------------------------
      Total assets                                         $                1,737      $                1,548
                                                          ========================    ========================

 Liabilities and partners' capital
 Current liabilities:
   Accounts payable and accrued expenses                   $                  279      $                  266
   Accounts payable to related party                                          647                         197
   Accrued interest to related party                                            -                         565
                                                          ------------------------    ------------------------
 Total current liabilities                                                    926                       1,028
                                                          ------------------------    ------------------------
 Partners' capital:
   General partner                                                              6                           4
   Limited partners                                                           218                         (69)
   Substituted limited partner (Note 2)                                         6                           4
   Contributed capital                                                        581                         581
                                                          ------------------------    ------------------------

      Total partners' capital                                                 811                         520
                                                          ------------------------    ------------------------

      Total liabilities and partners'                     ------------------------    ------------------------
         capital                                           $                1,737      $                1,548
                                                          ========================    ========================




The accompanying notes are an integral part of the unaudited condensed financial statements.

</TABLE>


                                       3

<PAGE>

                       ZOND-PANAERO WINDSYSTEM PARTNERS I,
                        A CALIFORNIA LIMITED PARTNERSHIP
                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
    (Dollars in thousands, except per Unit value, which is in whole dollars)


<TABLE>
<CAPTION>
<S>                                          <C>                             <C>
                                                             For the Six Months Ended,
                                             -----------------------------------------------------------
                                                    June 30, 2006                  June 30, 2005
                                             ----------------------------    ---------------------------

Revenue:
  Sale of electricity                         $                    1,249                          2,119
  Other income                                                        15                             14
                                             ----------------------------    ---------------------------
Total revenue                                                      1,264                          2,133

Costs and expenses:
  Depreciation                                                        12                             24
  Property taxes                                                      44                             44
  Easement fees to related party                                     370                             75
  Management fees to
     related party                                                    25                             30
  Maintenance and other operating costs
     to related and other parties                                    422                            409
  Insurance costs                                                     19                             60
  Other operating costs                                               81                             89
                                             ----------------------------    ---------------------------

Total costs and expenses                                             973                            731
                                             ----------------------------    ---------------------------

Net income                                                           291                          1,402
                                             ============================    ===========================

Net income per Unit                                                  245                          1,178
                                             ============================    ===========================

Number of outstanding Limited
   Partner Units                                                   1,190                          1,190
                                             ============================    ===========================




The accompanying notes are an integral part of the unaudited condensed financial statements.

</TABLE>


                                       4

<PAGE>

                       ZOND-PANAERO WINDSYSTEM PARTNERS I,
                        A CALIFORNIA LIMITED PARTNERSHIP
                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
    (Dollars in thousands, except per Unit value, which is in whole dollars)


<TABLE>
<CAPTION>
<S>                                         <C>                             <C>
                                                             For the Three Months Ended,
                                            -----------------------------------------------------------
                                                   June 30, 2006                  June 30, 2005
                                            ----------------------------    ---------------------------
Revenue:
  Sale of electricity                        $                      610      $                   1,439
  Other income                                                        5                              7
                                            ----------------------------    ---------------------------
Total revenue                                                       615                          1,446

Costs and expenses:
  Depreciation                                                        -                             12
  Property taxes                                                     22                             22
  Easement fees to related party                                    196                             49
  Management fees to
     related party                                                   12                             19
  Maintenance and other operating costs
     to related and other parties                                   212                            200
  Insurance costs                                                    10                             30
  Other operating costs                                               2                             91
                                            ----------------------------    ---------------------------

Total costs and expenses                                            454                            423
                                            ----------------------------    ---------------------------

Net income                                   $                      161      $                   1,023
                                            ============================    ===========================

Net income per Unit                          $                      135      $                     860
                                            ============================    ===========================

Number of outstanding Limited
   Partner Units                                                  1,190                          1,190
                                            ============================    ===========================




The accompanying notes are an integral part of the unaudited condensed financial statements.
</TABLE>


                                       5

<PAGE>

                       ZOND-PANAERO WINDSYSTEM PARTNERS I,
                        A CALIFORNIA LIMITED PARTNERSHIP
         CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                                For the six months ended June 30, 2006 and
                                                                                     the year ended December 31, 2005

<S>                                      <C>                 <C>                <C>                 <C>                   <C>
                                                                                               Substituted
                                                                                                 Limited           Contributed
                                                            General           Limited            Partner             Capital
                                            Total           Partner          Partners           (Note 1)             (Note 5)
                                       ----------------  ---------------  ----------------  ------------------  -----------------
Profit and loss allocation                     100.00%            0.50%            99.00%               0.50%
                                       ----------------  ---------------  ----------------  ------------------  -----------------

Balance at December 31, 2004            $       (1,402)   $          (6)   $       (1,971)   $             (6)   $           581

Net income                                       1,922               10             1,902                  10                  -
                                       ----------------  ---------------  ----------------  ------------------  -----------------

Balance at December 31, 2005            $          520    $           4    $          (69)   $              4    $           581

Net income (Unaudited)                             291                2               287                   2                  -
                                       ----------------  ---------------  ----------------  ------------------  -----------------

Balance at June 30, 2006 (Unaudited)    $          811    $           6    $          218    $              6    $           581
                                       ================  ===============  ================  ==================  =================




The accompanying notes are an integral part of the unaudited condensed financial statements.
</TABLE>


                                       6

<PAGE>

                       ZOND-PANAERO WINDSYSTEM PARTNERS I,
                        A CALIFORNIA LIMITED PARTNERSHIP
         CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                             (Dollars in thousands)


<TABLE>
<CAPTION>
<S>                                                             <C>                       <C>
                                                                           For the Six Months Ended,
                                                                ------------------------------------------------
                                                                    June 30, 2006             June 30, 2005
                                                                ----------------------    ----------------------

Cash Flow From Operating Activities:

Net income                                                       $                291        $              1,402

Reconciliation of net income to net cash used
      in operating activities:

Depreciation                                                                       12                          24

Changes in operating assets and liabilities:
  Accounts receivable from related party                                         (255)                       (567)
  Other current assets                                                             29                         (16)
  Accounts payable and accrued expenses                                            13                          (6)
  Accounts payable to related party                                               450                        (189)
  Accrued interest payable to related party                                      (565)                     (1,900)
                                                                  ----------------------    ----------------------

Net cash used in operating activities                                             (25)                     (1,252)
                                                                  ----------------------    ----------------------

  Net decrease in cash and cash equivalents                                       (25)                     (1,252)

Cash and cash equivalents at beginning of the period                              843                       2,603
                                                                  ----------------------    ----------------------

Cash and cash equivalents at end of period                         $              818        $              1,351
                                                                  ======================    ======================

Supplemental disclosure of cash flow information:
  Cash paid during the year for interest                           $              565        $              1,900




The accompanying notes are an integral part of the unaudited condensed financial statements.
</TABLE>


                                       7

<PAGE>

                       ZOND-PANAERO WINDSYSTEM PARTNERS I,
                        A CALIFORNIA LIMITED PARTNERSHIP

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION

The condensed financial statements included herein for the quarterly periods
ended June 30, 2006 and 2005 have been prepared by Zond-PanAero Windsystem
Partners I, a California Limited Partnership (the "Partnership") without audit
pursuant to the rules and regulations of the Securities and Exchange Commission
(the "Commission"). Accordingly, these statements reflect all adjustments
(consisting only of normal recurring entries), which are, in the opinion of the
Partnership, necessary for a fair statement of the financial results for the
interim periods. Certain information and notes normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to such
accounting principles. The Partnership believes that the information and notes
included in the financial information are adequate to make the information
presented not misleading. Operating results for the interim period presented are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2006.

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

NOTE 2 - THE PARTNERSHIP

Introduction

The Partnership was formed on June 29, 1984, to purchase, own and operate a
system of 300 Vestas Energy A/S Model V-15 wind turbine electric generators (the
"Turbines"). The electricity generated by the Turbines is sold by the
Partnership to its sole customer, Southern California Edison Company ("SCE").
See Note 8 for additional information.
Each Turbine has a rated capacity of 65 kilowatts, and the Turbines have an
aggregate rated capacity of 19.5 megawatts. The Turbines, together with certain
infrastructural improvements (the "Infrastructural Improvements"), which are
owned by Mesa Wind Developers ("Mesa"), a joint venture between Enron Wind
Systems, LLC ("EWS") and an affiliate of PanAero Corporation ("PanAero"), form
an integrated electric power generating facility (the "Windsystem"). The
Windsystem is located in the San Gorgonio Pass area of the San Bernardino
Mountains near Palm Springs, California (the "Operating Site").

The Turbines are interconnected by a system of transformers and power transfer
lines to a substation and SCE's transmission grid. The individual power lines
from each of the Turbines are fed into step-up transformers, which increase the
voltage from 480 volts to 12.5 kilovolts. Additional 12.5 kilovolt power
transfer lines carry electricity to a substation, which steps up the electric
power to 115 kilovolts for delivery to SCE.

EWS is an operator of commercial wind-powered electric generating facilities and
PanAero is a wind resources development company. On January 3, 1997, EWS's
parent, Zond Corporation, became a wholly-owned subsidiary of Enron Renewable


                                       8

<PAGE>

Energy Corp., which is wholly-owned by Enron Corp. ("Enron"). In May 1997, the
name of Zond Corporation was changed to Enron Wind Corp. ("EWC").

The general partner (the "General Partner") of the Partnership is Zond
Windsystems Management LLC ("ZWM"), a California limited liability company
wholly-owned by EWS. See "Bankruptcy and Mergers" regarding certain affiliated
mergers and name changes affecting ZWM, EWS and EWC. The business of the
Partnership and the respective rights of its partners, including the
Partnership's limited partners (the "Limited Partners" and together with the
General Partner, the "Partners"), are governed by the First Amended and Restated
Certificate and Agreement of Limited Partnership of Zond-PanAero Windsystem
Partners I, a California Limited Partnership, entered into on November 29, 1984,
as amended (the "Partnership Agreement").

The Windsystem, which became operational in November 1984, was constructed by
Mesa Construction Company ("MCC"), a joint venture between an affiliate of EWS
and an affiliate of PanAero. The Partnership paid MCC a total of $48.9 million
for the purchase, construction and installation of the Turbines, comprised of
$22.4 million in cash and $26.5 million in the form of eighteen-year, 13% notes
payable in equal semi-annual installments of principal and interest totaling
$1.9 million (the "Purchase Notes"). In March 2006, the Partnership paid the
remaining $0.6 million of interest in arrears due under the Purchase Notes. As a
result, the Purchase Notes have been paid in full. See Note 5 below for
additional information.

Dissolution of the Partnership

The term of the Partnership ended on December 31, 2005 in accordance with the
provisions of the Partnership Agreement. The Partnership dissolved effective on
the day on which the term of the Partnership ended. Effective July 25, 2006, the
Partnership sold substantially all of its assets. See Note 8 below for
additional information. The General Partner will apply and distribute the
proceeds thereof as contemplated by the Partnership Agreement, and plans to
cause the cancellation of the Partnership's Certificate of Limited Partnership
with the Secretary of State of the State of California. The Partnership will
then terminate and the General Partner plans to file with the Commission a Form
15 to terminate registration of the Units under the Securities Exchange Act of
1934, as amended (the "Exchange Act").

The General Partner continued the operation of the Windsystem during the
liquidation period of the Partnership up to the date of the sale of
substantially all of the Partnership's assets. The Reservation of Rights
Agreement and the Wind Park Easement Agreement (as defined in "Substantial
Transactions and Operating Agreements" below) each was terminated as of July 25,
2006, the date of the sale of substantially all of the Partnership's assets.

Under the terms of the Partnership Agreement, the proceeds of the liquidation of
the assets of the Partnership are to be distributed in the following order: (i)
first, for the payment of any Partnership liquidation expenses and Partnership
debts (other than those owing to any of the Partners), such as the Purchase
Notes; (ii) second, for the payment of any Partnership debts owing to any of the
Partners; and (iii) third, for distributions to the Partners in proportion to
their Partnership adjusted capital accounts, after giving effect to all
contributions, distributions and allocations for all taxable years of the
Partnership, including the taxable year during which the final liquidating
distribution occurs. There is no assurance that, following the payment of the
liquidation expenses relating to the Partnership and the payment of the
Partnership's debts, there will be any remaining proceeds from the liquidation
of the Partnership's assets available for distribution to the Partners.


                                       9


<PAGE>

Bankruptcy and Mergers

Commencing on December 2, 2001, and periodically thereafter, Enron and certain
of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code (the "Bankruptcy Code"). This matter is referred
to herein as the "Enron Bankruptcy". On February 20, 2002, EWC and Enron Wind
Systems, Inc. ("EWSI") each filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code. Additionally, two California limited liability
companies formed on February 19, 2002 for the purposes of merging with EWC and
EWSI in anticipation of the sale of Enron's wind turbine manufacturing business
also filed voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code.

EWC merged with and into one of such limited liability companies on April 19,
2002 and the surviving limited liability company changed its name to Enron Wind
LLC ("EW"). EWSI merged with and into the other limited liability company, also
on April 19, 2002, and the surviving limited liability company changed its name
to Enron Wind Systems, LLC.

On April 12, 2002, Zond Windsystems Management Corporation ("ZWMC"), the general
partner of the Partnership at such time, merged with and into a third California
limited liability company, formed on March 12, 2002, and the surviving limited
liability company changed its name to Zond Windsystems Management LLC. On May 3,
2002, Zond Construction Corp. merged with and into a fourth California limited
liability company, formed on March 21, 2002, and the surviving limited liability
company changed its name to Zond Construction LLC ("ZC"). Neither ZWM nor ZC has
filed for bankruptcy.

On November 17, 2004, the Chapter 11 Plan (the "Plan") relating to the Enron
Bankruptcy became effective. The Plan provides for Enron and its affiliated
debtor companies (including EWS and EW) to sell most of their assets and
distribute to their creditors the proceeds of such sales. In connection with the
Plan, EWS assumed the Management Agreement (as defined in "Operation and
Maintenance Services" below) and that agreement remains in effect.

Substituted Limited Partner

PAMC Management Corporation ("PAMC") formerly served as a general partner of the
Partnership (together with ZWMC, the "Former General Partners"). In June 1988,
the Partnership solicited a vote by proxy of the Limited Partners to remove PAMC
as a general partner. Pursuant to that vote, PAMC was converted to a substituted
limited partner. Although the term "Substituted Limited Partner" is defined in
the Partnership Agreement as any individual, partnership, corporation, trust or
other entity admitted to the Partnership as a Limited Partner pursuant to
transfer provisions under the Partnership Agreement, the term Substituted
Limited Partner is used in the accompanying financial statements in reference to
the substituted limited partner interest created by the removal of PAMC as a
general partner. Under an Agreement of Settlement and Mutual Releases (the
"Settlement Agreement") executed on June 26, 2000, PAMC agreed to transfer its
substituted limited partner interest in the Partnership to ZWMC.

Operation and Maintenance Services

EWS manages the Windsystem pursuant to a windsystem management agreement with
the Partnership executed on July 27, 1988 (the "Management Agreement"). The
Management Agreement by its term was due to terminate on March 31, 2006;
however, the Partnership and EWS entered into a Sixth Amendment to Windsystem
Management Agreement dated as of March 29, 2006, which extended the termination
date of the Management Agreement from March 31, 2006 to May 31, 2006; and


                                       10


<PAGE>

entered into a Seventh Amendment to Windsystem Management Agreement dated as of
August 11, 2006, which extended the termination date of the Management Agreement
from May 31, 2006 to September 30, 2006. See Note 8 for additional information.

Prior to May 10, 2002, Enron Wind Maintenance LLC, an affiliate of EWS, provided
operations and maintenance services for the Windsystem. On May 10, 2002, EWS
contracted with GE Wind Energy, LLC ("GE") to perform certain operations and
maintenance services relating to the Windsystem for a period of one year ending
on May 10, 2003.

In April 2003, EWS entered into an agreement (the "O&M Agreement") with SeaWest
Asset Management Services, LLC ("SeaWest") to provide certain operation and
maintenance services relating to the Windsystem for a 5-year period ending on
May 10, 2008. In connection with the Partnership's sale of substantially all of
its assets, EWS and SeaWest terminated the O&M Agreement as it related to the
Windsystem effective as of July 25, 2006.

Substantial Transactions and Operating Agreements

The accompanying financial statements include substantial transactions with
related parties. These transactions are further described in Note 6.

A summary of the major operating agreements entered into by the Partnership,
directly or indirectly, is set forth below:

(1)   Through June 23, 2005 the Partnership sold the electricity produced by the
      Turbines to SCE pursuant to a power purchase and sales agreement (the
      "Power Agreement") that was originally entered into between SCE and
      PanAero in April 1982 and covered an aggregate of 29.9 megawatts of
      generating capacity. PanAero assigned the Power Agreement to Mesa in July
      1984. Mesa subsequently assigned the portion of the Power Agreement that
      covers the aggregate rated capacity of the Turbines (19.5 megawatts) to
      the Partnership pursuant to that certain Partial Assignment of Wind Park
      Power Purchase and Sales Agreement dated September 28, 1984 (the "Partial
      Assignment"). Each of the Partial Assignment and the Power Agreement
      terminated by its terms on or about June 23, 2005.

      On or about June 23, 2005, the Partnership and PAMC entered into a
      Reservation of Rights Agreement dated as of June 23, 2005 (the
      "Reservation of Rights Agreement") pursuant to which the Partnership was
      permitted to (i) sell power to SCE from the Windsystem under a Reformed
      Standard Offer 1 As-Available Capacity and Energy Power Purchase Agreement
      dated June 23, 2005 between SCE and PAMC (the "RSO1 Power Agreement"), and
      (ii) interconnect the Windsystem with SCE's transmission system under an
      Interconnection Facilities Agreement between SCE and PAMC which was
      effective as of June 23, 2005 (the "Interconnection Agreement").

      Under the Reservation of Rights Agreement, the Partnership was permitted
      and agreed to deliver up to 19.5 megawatts of energy to SCE under the RSO1
      Power Agreement and to interconnect the Partnership's Windsystem to SCE's
      transmission system under the Interconnection Agreement. The Reservation
      of Rights Agreement was due to terminate on December 31, 2005; however,
      the Partnership and PAMC, which is an affiliate of Mesa, entered into the
      Amendment to Reservation of Rights Agreement (the "Reservation of Rights
      Agreement Amendment") effective as of December 31, 2005, which extended


                                       11

<PAGE>

      the termination date of the Reservation of Rights Agreement from December
      31, 2005 to March 31, 2006. Pursuant to an Agreement to Market the Mesa
      Wind Project dated as of May 13, 2006 (the "Marketing Agreement") by and
      among the Partnership, Zond-PanAero Windsystem Partners II, a California
      limited partnership ("ZWP II"), EWS, PAMC, Mesa and Alta Mesa Energy, LLC,
      the parties agreed to extend the term of the Reservation of Rights
      Agreement through January 31, 2007. However, in connection with the sale
      of substantially all of the Partnership's assets, the Reservation of
      Rights Agreement was terminated effective as of July 25, 2006. See Note 8
      for additional information.

      The Partnership has not been required under the Reservation of Rights
      Agreement to pay to PAMC a fee for the Partnership's use of the RSO1 Power
      Agreement or the Interconnection Agreement. The Partnership has been
      required to pay for a portion of all fees, costs and expenses incurred by
      PAMC under the RSO1 Power Agreement and the Interconnection Agreement,
      including, without limitation, interconnection fees, back feed electricity
      costs and maintenance costs. The portion of such fees, costs and expenses
      paid by the Partnership has been based on the ratio of (x) the aggregate
      installed name-plate capacity of the Partnership's Windsystem to (y) the
      aggregate installed name-plate capacity of all the wind power projects
      delivering power to SCE under the RSO1 Power Agreement.

      PAMC also concurrently entered into a separate reservation of rights
      agreement with ZWP II and an affiliate of the Partnership, pursuant to
      which PAMC granted ZWP II the right to sell to SCE under the RSO1 Power
      Agreement up to 10.4 megawatts of energy from its wind turbine electric
      power generation facility and to interconnect such wind power generation
      facility to SCE's transmission grid under the Interconnection Agreement.

      Under the RSO1 Power Agreement, SCE is required to purchase from PAMC, and
      PAMC is required to sell to SCE, the output from the Partnership's
      Windsystem and ZWP II's wind power facility, provided that the aggregate
      name-plate capacity of all such generating facilities may not exceed 30
      megawatts at any one time. The RSO1 Power Agreement has a five-year term,
      but may be terminated by PAMC upon 30 days advance notice to SCE. The
      price to be paid by SCE for the energy delivered under the RSO1 Power
      Agreement is equal to the short run avoided cost to SCE for energy during
      the delivery period of such energy. Under the RSO1 Power Agreement, SCE
      will also pay an annual capacity payment for the installed capacity of
      such generation facilities that is based on SCE's avoided cost for
      capacity.

      Unlike the Power Agreement, which terminated on or about June 23, 2005,
      the RSO1 Power Agreement does not contain a minimum energy price payable
      by SCE. The minimum price for energy that was paid by SCE under the Power
      Agreement was $0.102 per kilowatt hour of energy, and SCE generally paid
      to the Partnership such minimum price for energy during the term of the
      Power Agreement. As a result, the price received by the Partnership for
      the sale of energy under the RSO1 Power Agreement was more volatile as
      compared with the price that would have been received by the Partnership
      under the Power Agreement during the same period of time.

(2)   Since July 1988, the Partnership has contracted with EWS (or its
      predecessor) for the operation and maintenance of the Turbines and the
      performance of certain ancillary management services, such as collection
      of revenues from SCE and the administration and payment of all Partnership


                                       12

<PAGE>

      expenses. Under the provisions of the Management Agreement, the
      Partnership pays a management fee of 2% of the Partnership's gross
      operating proceeds ("Gross Operating Proceeds"). Gross Operating Proceeds
      are defined as all gross receipts from the sale of electricity generated
      by the Turbines and all amounts paid in lieu of receipts from the sale of
      electricity, including, without limitation, any proceeds of systems
      performance or wind resource insurance, casualty loss and business
      interruption insurance paid in reimbursement of lost revenues and warranty
      payments in reimbursement of lost revenues. Under the Management
      Agreement, EWS is also reimbursed for 115% of the maintenance costs,
      including labor and material costs that it incurs in the performance of
      services, including services performed by third parties. See Note 6 for
      additional information. The Management Agreement was to terminate by its
      terms on March 31, 2006; however, the Partnership and EWS entered into a
      Sixth Amendment to Windsystem Management Agreement dated as of March 29,
      2006 which extended the termination date of the Management Agreement from
      March 31, 2006 to May 31, 2006; and entered into a Seventh Amendment to
      Windsystem Management Agreement dated as of August 11, 2006, which
      extended the termination date of the Management Agreement from May 31,
      2006 to September 30, 2006. See Note 8 for additional information.

(3)   The Operating Site is situated on two adjoining parcels of land,
      consisting of approximately 440 acres, located in the San Gorgonio Pass
      area of the San Bernardino Mountains approximately 16 miles northwest of
      Palm Springs, California. The Partnership owns the Turbines, including the
      supporting towers and related concrete support pads and controllers. The
      Partnership uses the Infrastructural Improvements and a portion of the
      Operating Site pursuant to an easement granted by Mesa under the terms of
      a Wind Park Easement Agreement dated as of September 7, 1984, as amended
      (the "Wind Park Easement Agreement"). The Infrastructural Improvements
      include roads, fences, power transfer system, substation and maintenance
      facilities. Mesa has title to the Infrastructural Improvements, but has
      granted the Partnership a security interest in such assets under the Wind
      Park Easement Agreement. The Infrastructural Improvements are also
      utilized by ZWP II under a similar arrangement with Mesa.

      Mesa has rights to develop wind energy resources at the Operating Site,
      which includes the Infrastructural Improvements, under a right-of-way
      grant (the "Right-of-Way Grant") from the United States Bureau of Land
      Management ("BLM"). The Right-of-Way Grant was originally issued to
      PanAero on January 26, 1983, and was assigned by PanAero to Mesa in April
      1984. The primary term of the Right-of-Way Grant expired on January 26,
      2003. On December 19, 2002, the Right-of-Way Grant was extended for a
      ten-year period commencing on January 27, 2003.

      Pursuant to the Wind Park Easement Agreement, Mesa granted to the
      Partnership the right to use a portion of the Operating Site and the
      Infrastructural Improvements in connection with the operation of the
      Windsystem. Prior to January 1, 2006, the Wind Park Easement Agreement
      provided that the royalty payment payable by the Partnership to Mesa
      equaled 5% of Gross Operating Proceeds, as defined in the Wind Park
      Easement Agreement (the "Prior Royalty Rate"). The Wind Park Easement
      Agreement, as previously amended, was due to terminate on December 31,
      2005; however, on March 3, 2006, the Partnership and Mesa entered into the
      Amendment to Wind Park Easement Agreement (the "Easement Agreement
      Amendment"), which amendment was effective as of December 31, 2005. The
      Easement Agreement Amendment extended the termination date of the Wind
      Park Easement Agreement from December 31, 2005 to March 31, 2006. The


                                       13

<PAGE>

      Easement Agreement Amendment also provides that after December 31, 2005,
      the royalty payment payable by the Partnership to Mesa equals 55% of Net
      Operating Proceeds, as defined in the Easement Agreement Amendment (the
      "Current Royalty Rate"). For any applicable period after December 31,
      2005, the royalty payments payable by the Partnership using the Current
      Royalty Rate have been substantially higher than if such royalty amounts
      were calculated using the Prior Royalty Rate. Pursuant to the Marketing
      Agreement, the parties agreed to extend the term of the Wind Park Easement
      Agreement through January 31, 2007. However, in connection with the sale
      of substantially all of the Partnership's assets, the Wind Park Easement
      Agreement was terminated effective as of July 25, 2006. See Note 8 for
      additional information.

Cash Distributions

The Partnership makes cash distributions in accordance with the terms of the
Partnership Agreement. Due to less-than-projected operating results, the
Partnership has not distributed any cash during any fiscal year other than 1985,
in which the Partnership distributed an aggregate of approximately $158,000 to
the Limited Partners and $2,000 to the then General Partners. Under the Purchase
Notes, the Partnership was not permitted to make cash distributions to its
Partners unless certain cash reserve balances were maintained, no events of
default existed, and certain ratio tests were met. The Partnership did not meet
these criteria at any time since 1985 and did not make any cash distributions to
its Partners during the first six months of 2006.

NOTE 3 - GOING CONCERN

The following matters raise substantial doubt about the Partnership's ability to
continue as a going concern:

1. As discussed in Note 2, the term of the Partnership ended on December 31,
2005. The Partnership dissolved effective on the day on which the term of the
Partnership ended. Effective July 25, 2006, the Partnership sold substantially
all of its assets. See Note 8 for additional information. The General Partner
will apply and distribute the proceeds thereof as contemplated by the
Partnership Agreement, and plans to cause the cancellation of the Partnership's
Certificate of Limited Partnership with the Secretary of State of the State of
California. The Partnership will then terminate and the General Partner plans to
file with the Commission a Form 15 to terminate registration of the Units under
the Exchange Act.

2. As discussed in Note 2 and Note 8, in connection with the sale of
substantially all of the Partnership's assets, the Reservation of Rights
Agreement and the Wind Park Easement Agreement were terminated as of July 25,
2006.

NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The Partnership's accounting records are maintained on the basis used for
federal income tax reporting purposes. For purposes of filing with the
Commission, the accounting records have been adjusted to reflect accounting
principles generally accepted in the United States of America ("GAAP").


                                       14


<PAGE>

Income Taxes

The Partnership is not subject to federal and state income taxes. Accordingly,
no recognition has been given to income taxes in the accompanying financial
statements since the income or loss of the Partnership is to be included in the
tax returns of the individual Partners. The tax returns of the Partnership are
subject to examination by federal and state taxing authorities. If such
examinations result in adjustments to distributive shares of taxable income or
loss, the tax liability of the Partners could be adjusted accordingly.

The tax attributes of the Partnership's net assets flow directly to each
individual Partner. Individual Partners will have different investment bases
depending upon the timing and prices of acquisition of Partnership units.
Further, each Partner's tax accounting, which is partially dependent upon their
individual tax position, may differ from the accounting followed in the
financial statements. Accordingly, there could be significant differences
between each individual Partner's tax basis and their proportionate share of the
net assets reported in the financial statements. Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes", requires
disclosure by a publicly held partnership of the aggregate difference in the
basis of its net assets for financial and tax reporting purposes. However, the
Partnership does not have access to information about each individual Partner's
tax attributes in the Partnership, and the aggregate tax basis cannot be readily
determined. In any event, management does not believe that, in the Partnership's
circumstances, the aggregate difference would be meaningful information.

Cash Equivalents

Cash equivalents are considered to be all highly liquid investments purchased
with an original maturity of three months or less.

Depreciation

The Turbines are recorded at cost. The Turbines were fully depreciated as of
December 31, 2004. The Turbines were depreciated on the straight-line method
over a twenty-year life. Capitalized improvements and the building were
depreciated on a straight-line method over a fifteen year life. As of April 1,
2006, the Turbines, the capitalized improvements and the building were
reclassified from property, plant and equipment to assets held for sale.
Accordingly, no additional depreciation was recognized during the second quarter
of 2006.

Earnings Per Limited Partner Unit

Earnings per Limited Partner unit are calculated based upon the number of
Limited Partner units outstanding during each year.

Fair Value of Financial Instruments

For each class of financial instruments, including cash and cash equivalents,
accounts receivable, prepaid insurance and other current assets, accounts
payable and accrued expenses, accounts payable to related party and accrued
interest to related party, the carrying amount approximates fair value because
of the short maturity of those instruments.


                                       15

<PAGE>

Estimates

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Electricity Sales and Significant Customer

Power generated by the Windsystem was recognized as revenue upon delivery of
power to SCE at prices as defined in the RSO1 Power Agreement. All power
produced was sold to SCE under the Reservation of Rights Agreement, which was
terminated as of July 25, 2006 in connection with the sale of substantially all
of the Partnership's assets. See Note 2 and Note 8 for additional information.

NOTE 5 - PURCHASE NOTES

Under an agreement reached in April 1989, MCC reduced the interest rate on the
Purchase Notes from 13% to 11% per annum effective in January 1990. The
Partnership secured its payment obligations under the Purchase Notes by granting
MCC security interests in the Turbines and other intangible collateral including
the rights, title and interests of the Partnership under several of the
Partnership's major operating agreements.

In March 2006, the Partnership paid the remaining $0.6 million of interest in
arrears due under the Purchase Notes. As a result, the Purchase Notes have been
paid in full. Prior to the date of the payment of such remaining interest in
arrears under the Purchase Notes, the Partnership was in default of the Purchase
Notes. During such period and upon notice of default, MCC had a right to
foreclose against its security interest in all the assets of the Partnership,
including the Turbines. However, MCC did not elect to foreclose on its security
interest.

NOTE 6 - TRANSACTIONS WITH RELATED PARTIES

In addition to the Purchase Notes (See Note 5 above) the Partnership had amounts
payable to Mesa and EWS, respectively. Amounts payable to Mesa include easement
fees and other miscellaneous expenses related to Windsystem operations. Amounts
payable to EWS include management fees, maintenance costs and other
miscellaneous expenses related to Windsystem operations.

The Partnership has the following related party transactions and relationships:

(1)   Mesa assigned easement rights to a portion of the Operating Site and
      granted rights to use the Infrastructural Improvements to the Partnership
      under the Wind Park Easement Agreement (See Note 2 above). The Partnership
      incurred $0.2 million in easement fees during the second quarter of 2006
      as compared to $0.05 million during the second quarter of 2005 pursuant to
      the Wind Park Easement Agreement.

(2)   The Partnership has a contract with EWS to operate and maintain the
      Turbines and to perform certain management and administrative services
      under the Management Agreement (See Note 2 above). The Partnership


                                       16

<PAGE>

      incurred expenses of $0.2 million during each of the second quarters of
      2006 and 2005, pursuant to the Management Agreement.

In 1988, Mesa assigned $581,000 of receivables from the Partnership to each of
its partners, EWSI and an affiliate of PanAero. EWSI subsequently forgave its
$581,000 of receivables from the Partnership. This forgiveness was treated as a
capital contribution in the accompanying financial statements.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Leases Payable

None.

NOTE 8 - SUBSEQUENT EVENTS

Sale of Assets

On July 25, 2006, the Partnership sold substantially all of its assets to
Western Wind Energy Corp ("Western Wind") pursuant to the Agreement and Plan of
Merger dated as of July 3, 2006, as amended (the "Merger Agreement"). On such
date, the Partnership, PAMC, PanAero California Ltd., a California limited
partnership, Alta Mesa Energy, LLC ("Alta Mesa"), Mesa, EWS, ZWP II, and Western
Wind, entered into the Omnibus Termination Agreement (the "Termination
Agreement"). In accordance with the Termination Agreement, effective as July 25,
2006, the parties terminated several agreements related to the assets sold to
Western Wind including the Wind Park Easement Agreement and the Reservation of
Rights Agreement. The parties to the terminated agreements released each other
from all claims and liabilities thereunder. The Partnership did not incur any
early termination penalties in connection with the termination of the foregoing
agreements. Pursuant to the terms of the Merger Agreement, at the closing, the
Partnership received $873,913 for the sale of its assets.

Operation and Maintenance Services

The Partnership and EWS entered into a Seventh Amendment to Windsystem
Management Agreement dated as of August 11, 2006, which extended the termination
date of the Management Agreement from May 31, 2006 to September 30, 2006.

GE Settlement

Pursuant to a Settlement Agreement and Release (the "Settlement Agreement")
executed on July 3, 2006, and effective as of May 1, 2006, among other things,
EWS settled claims by GE for amounts owed for operation and maintenance services
rendered relating to the Windsystem. Pursuant to the Settlement Agreement, EWS
paid to GE the sum of $147,000 related to operation and maintenance services
provided by GE relating to the Windsystem. As of June 30, 2006, the Partnership
had a recorded liability to EWS in the amount of $186,000 related to this
obligation. The settlement payment was made by EWS to GE in July 2006. At that
time, the Partnership recognized a $39,000 reduction in its recorded liabilities
and operation and maintenance expenses.


                                       17

<PAGE>

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

Going Concern

The following matters raise substantial doubt about the Partnership's ability to
continue as a going concern:

1. As discussed in Note 2 to the Financial Statements, the term of the
Partnership ended on December 31, 2005. The Partnership dissolved effective on
the day on which the term of the Partnership ended. Effective July 25, 2006,
substantially all of the assets of the Partnership were sold. See Note 8 to the
Financial Statements for additional information. The General Partner will apply
and distribute the proceeds thereof as contemplated by the Partnership
Agreement, and plans to cause the cancellation of the Partnership's Certificate
of Limited Partnership with the Secretary of State of the State of California.
The Partnership will then terminate and the General Partner plans to file with
the Commission a Form 15 to terminate registration of the Units under the
Exchange Act.

2. As discussed in Note 2 and Note 8 to the Financial Statements, the
Reservation of Rights Agreement and the Wind Park Easement Agreement were
terminated effective as of July 25, 2006.

Liquidity and Capital Resources

The Partnership's primary source of revenues and liquidity to fund operations of
the Windsystem, repay debt, administer the Partnership, and make distributions
to its Partners has been the production and sale of electricity from the
Windsystem. The Partnership's sole customer was SCE. The price paid by SCE for
the electricity was contractually defined under the RSO1 Power Agreement.

As of June 30, 2006, the Partnership had no current or planned commitments for
capital expenditures.

Results of Operations for the Six Months Ended June 30, 2006 Compared to the Six
Months Ended June 30, 2005.

During the first six months of 2006, the Partnership's electricity revenue was
$1.2 million, and the Windsystem produced 17.2 million kWh of electricity sold
to SCE. This was a decrease of $0.9 million or 41% in revenue and a decrease of
4.1 million kWh or 19 % of electricity produced as compared to the first six
months of 2005. The decrease in electricity revenue was due to decreased
production as a result of an increase in turbines in need of repair as well as
the effect of the change in price paid by SCE for the energy delivered by the
Partnership. See "Note 2 - THE PARTNERSHIP - Substantial Transactions and
Operating Agreements". From January 1, 2005 through June 23, 2005, the price
paid by SCE for energy delivered by the Partnership was at a rate of $0.102 per
kWh. From June 23, 2005 through June 30, 2006 SCE paid a price equal to its
short - run avoided cost which averaged a rate of $0.089 per kWh for all energy
delivered by the Partnership.  During the first six months of 2006, SCE's
short-run avoided cost (and the price paid by SCE for energy delivered by the
Partnership during this period) averaged $0.075 per kWh. Other income remained
comparable during the first six months of 2006 as compared to the first six
months of 2005.


                                       18

<PAGE>

Costs and expenses in the first six months of 2006 were $1.0 million, an
increase of $0.2 million or 33%, as compared to the first six months of 2005.
Depreciation decreased $0.01 as the remaining depreciable assets were
reclassified as held for sale and therefore not depreciated during the second
quarter of 2006. Property taxes remained constant during the first six months of
2006 as compared to the first six months of 2005. Easement fees increased $.3
million during the first six months of 2006 as compared to the first six months
of 2005. For the first six months of 2005, the Wind Park Easement Agreement
provided that the easement payment payable by the Partnership to Mesa equals 5%
of Gross Operating Proceeds (as defined below). For the first six months of
2006, the Easement Agreement Amendment provided that the easement payment
payable by the Partnership to Mesa equals 55% of Net Operating Proceeds (as
defined in the Easement Agreement Amendment). Management fees remained
comparable during the first six months of 2006 as compared to the first six
months of 2005. Management fees are calculated as a percentage of Gross
Operating Proceeds. "Gross Operating Proceeds" are defined as all gross receipts
from the sale of electricity generated by the Turbines and all amounts paid in
lieu of receipts from the sale of electricity, including, without limitation,
any proceeds of systems performance or wind resource insurance, casualty loss
and business interruption insurance paid in reimbursement of lost revenues and
warranty payments in reimbursement of lost revenues. Maintenance expenses
increased $0.01 in the first six months of 2006 as compared with the first six
months of 2005 due to an increase in unscheduled maintenance. Insurance costs
decreased by $0.04 million in the first six months of 2006 due to a decrease in
renewal rates as compared with the first six months of 2005. Other operating
costs decreased $0.01 million in the first six months of 2006 due to a decrease
in the use of outside consultants as compared to the same period in 2005.

Overall, the Partnership reported net income of $0.3 million for the first six
months of 2006 as compared with net income of $1.4 million for the first six
months of 2005. During the first six months of 2006, the total partners' capital
increased $0.3 million to $0.8 million. The net income per Unit was $245 for the
first six months of 2006 compared with net income per Unit of $1,178 for the
first six months of 2005.

Cash flows from operations increased $1.2 million in the first six months of
2006 as compared to the first six months of 2005. This increase was primarily
due to a decrease in accrued interest paid to related parties and favorable
changes in working capital during the first six months of 2006 as compared to
the first six months of 2005.

Results of Operations for the Three Months Ended June 30, 2006 Compared to the
Three Months Ended June 30, 2005

For the three months ended June 30, 2006, revenues from power sales were $0.6
million, and the Windsystem produced 9.3 million kWh of electricity for sale to
SCE. This was a decrease of $0.8 million or 58% in revenue and a decrease of 5.4
million kWh of electricity produced or 37% as compared to the same period in
2005. The decrease in electricity revenue was due to decreased production as a
result of an increase in turbines in need of repair as well as the effect of the
change in price paid by SCE for the energy delivered by the Partnership. See
"Note 2 - THE PARTNERSHIP - Substantial Transactions and Operating Agreements".
From April 1, 2005 through June 23, 2005, the price paid by SCE for energy
delivered by the Partnership was at a rate of $0.102 per kWh. From June 23, 2005
through June 30, 2005 SCE paid a price equal to its short - run avoided cost
which averaged a rate of $0.089 per kWh for all energy delivered by the
Partnership. During the second quarter of 2006, SCE's short-run avoided cost
(and the price paid by SCE for energy delivered by the Partnership during this


                                       19

<PAGE>

period) averaged $0.069 per kWh. Other income remained comparable during the
second quarter of 2006 as compared to the second quarter of 2005.

Costs and expenses for the second quarter of 2006 were $0.5 million. This was an
increase of $0.03 million or 7%, as compared to the second quarter of 2005.
Depreciation decreased $0.01 million during the second quarter of 2006 as
compared to the second quarter of 2005 as the remaining depreciable assets were
reclassified as held for sale and therefore not depreciated during the second
quarter of 2006. Property taxes were constant during the second quarter of 2006
as compared to the second quarter of 2005.

Easement fees increased $0.1 million during the second quarter of 2006 as
compared to the second quarter of 2005. For the second quarter of 2005, the Wind
Park Easement Agreement provided that the easement payment payable by the
Partnership to Mesa equals 5% of Gross Operating Proceeds (as defined below).
For the second quarter of 2006, the Easement Agreement Amendment provided that
the easement payment payable by the Partnership to Mesa equals 55% of Net
Operating Proceeds (as defined in the Easement Agreement Amendment). Management
fees decreased $0.01 million during the second quarter of 2006 as compared to
the second quarter of 2005. Management fees are calculated as a percentage of
Gross Operating Proceeds. Maintenance expenses increased $0.01 million in the
second quarter of 2006, as compared to the second quarter of 2005, due to an
increase in unscheduled maintenance. Insurance costs decreased by $0.02 million
in the second quarter of 2006 due to a decrease in renewal rates as compared
with the second quarter of 2005. Other operating costs decreased $0.09 million
in the second quarter of 2006 due to a decrease in the use of outside
consultants as compared to the same period in 2005.

Overall, the Partnership reported net income of $0.2 million for the second
quarter of 2006, which is a decrease of $0.9 million or 84% as compared to the
second quarter of 2005. Net income per Unit was $135 for the second quarter of
2006 compared with a net income per Unit of $860 for the second quarter of 2005.

Contractual Obligations

     The Partnership's contractual obligations as of June 30, 2006 are as
     follows (in millions):

          ------------------------------------- ----------------------
         |                                     |         2006*        |
         |-------------------------------------|----------------------|
         |  Purchase obligations:              |                      |
         |-------------------------------------|----------------------|
         |                                     |                      |
         |-------------------------------------|----------------------|
         |  Scheduled maintenance fees         |         $0.04        |
          ------------------------------------- ----------------------

*The term of the Partnership ended on December 31, 2005; however, the
Partnership operated in liquidation and obtained the right to sell power under
the Reservation of Rights Agreement, and extended the term of the Wind Park
Easement Agreement, through July 25, 2006, and extended the term of the
Management Agreement through September 30, 2006. See Note 8 to the Financial
Statements for additional information. In connection with the sale of the
Partnership assets, effective July 25, 2006, the Partnership has no further
ongoing obligations for payment of scheduled maintenance fees.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


                                       20

<PAGE>

The Partnership's management with the participation of the General Partners'
Chief Executive Officer and Chief Financial Officer has evaluated the disclosure
requirements of Item 305 of Regulation S-K "Quantitative and Qualitative
Disclosures about Market Risk," and has concluded that the Partnership currently
has no market risk sensitive instruments for which this disclosure is required.

Item 4.  CONTROLS AND PROCEDURES

     (a)  Disclosure Controls and Procedures

The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act. This term means controls and other procedures of
a company that are designed to ensure that information required to be disclosed
by the company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by a company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the company's
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.

The Partnership's management, with the participation of the General Partner's
Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of the Partnership's disclosure controls and procedures as of June
30, 2006. Based on these evaluations, the General Partner's Chief Executive
Officer and Chief Financial Officer concluded that the Partnership's disclosure
controls and procedures were effective as of June 30, 2006.

     (b)  Internal Control Over Financial Reporting

During the three months ended June 30, 2006, the Partnership made no change in
its internal control over financial reporting (as such term is defined in Rules
13a - 15(f) and 15d - 15(f) under the Exchange Act) that materially affected, or
is reasonably likely to materially affect, its internal control over financial
reporting.


                                       21

<PAGE>

PART II - OTHER INFORMATION

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 5. OTHER INFORMATION

This report contains statements that are forward-looking within the meaning of
Section 27(a) of the Securities Act of 1933 and Section 21(e) of the Exchange
Act. Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and that actual results could differ materially
as a result of known and unknown risks and uncertainties, including general
economic conditions, future trends, and other risks, uncertainties and factors
disclosed in this operating report.

Item 6. EXHIBITS

(a) Exhibits

  10.1   Agreement to Market the Mesa Wind Project, dated as of May 13, 2006, by
         and among the Partnership, ZWP II, EWS, PAMC, Mesa and Alta Mesa.

  10.2   Seventh Amendment to Windsystem Management Agreement, dated as of
         August 11, 2006, between EWS and the Partnership.

  10.3   Agreement and Plan of Merger, dated as of July 3, 2006, by and among
         the Partnership, PAMC, Alta Mesa, Mesa, ZWP II, Western Wind and Mesa
         Wind Power Corporation; Amendment to Agreement and Plan of Merger,
         dated as of July 21, 2006, by and among the Partnership, PAMC, Alta
         Mesa, Mesa, ZWP II, Western Wind and Mesa Wind Power Corporation.

  10.4   Omnibus Termination Agreement, dated as of July 25, 2006, by and among
         the Partnership, EWS, PAMC, PanAero California Ltd., Alta Mesa, Mesa,
         ZWP II and Western Wind.


                                       22


<PAGE>

  31.1   Rule 13a-14(a) Certification of Jesse E. Neyman

  31.2   Rule 13a-14(a) Certification of Mary H. Cilia

  32.1   Section 1350 Certification of Jesse E. Neyman

  32.2   Section 1350 Certification of Mary H. Cilia




                                       23

<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.


                                    Zond-PanAero Windsystem Partners
                                    I, a California Limited Partnership
Date: August 14, 2006
                                    By:  Zond Windsystems Management LLC,
                                    General Partner

                                    By: /s/ Jesse E. Neyman
                                       -----------------------------------
                                    Jesse E. Neyman
                                    Chief Executive Officer of Zond Windsystems
                                    Management LLC, the General Partner of Zond-
                                    PanAero Windsystem Partners I, a California
                                    Limited Partnership


                                    By: /s/ Mary H. Cilia
                                       -----------------------------------
                                    Mary H. Cilia
                                    Chief Financial Officer of Zond Windsystems
                                    Management LLC, the General Partner of Zond-
                                    PanAero Windsystem Partners I, a California
                                    Limited Partnership




                                       24

<PAGE>

                                  Exhibit Index
                                  -------------

  Number                   Description

  10.1   Agreement to Market the Mesa Wind Project, dated as of May 13, 2006, by
         and among the Partnership, ZWP II, EWS, PAMC, Mesa and Alta Mesa.

  10.2   Seventh Amendment to Windsystem Management Agreement, dated as of
         August 11, 2006, between EWS and the Partnership.

  10.3   Agreement and Plan of Merger, dated as of July 3, 2006, by and among
         the Partnership, PAMC, Alta Mesa, Mesa, ZWP II, Western Wind and Mesa
         Wind Power Corporation; Amendment to Agreement and Plan of Merger,
         dated as of July 21, 2006, by and among the Partnership, PAMC, Alta
         Mesa, Mesa, ZWP II, Western Wind and Mesa Wind Power Corporation.

  10.4   Omnibus Termination Agreement, dated as of July 25, 2006, by and among
         the Partnership, EWS, PAMC, PanAero California Ltd., Alta Mesa, Mesa,
         ZWP II and Western Wind.

  31.1   Rule 13a-14(a) Certification of Jesse E. Neyman

  31.2   Rule 13a-14(a) Certification of Mary H. Cilia

  32.1   Section 1350 Certification of Jesse E. Neyman

  32.2   Section 1350 Certification of Mary H. Cilia



                                       25