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

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended            June 30, 2005
                                          -------------

                                       or

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

For the transition period from ______________________to_________________________

Commission File Number:                    333-83815
                                           ---------

                          Caithness Coso Funding Corp.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

                Delaware                                  94-3328762
                --------                                  ----------
    (State or other jurisdiction of                      (IRS Employer
     incorporation or organization)                    Identification No.)

     Coso Finance Partners              California               68-0133679
     Coso Energy Developers             California               94-3071296
     Coso Power Developers              California               94-3102796
    ---------------------               ----------               ----------
(Exact names of Registrants as  (State or other jurisdiction    (IRS Employer
  specified in their charters)        of incorporation)      Identification No.)

       565 Fifth Avenue, 29th Floor, New York, New York        10017-2478
       ------------------------------------------------        ----------
           (Address of principal executive offices)            (Zip Code)


                                 (212) 921-9099
                                 --------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
                                 --------------
                     (Former name, former address and former
                  fiscal year, if changed since last report.)

     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.                         [X] Yes [ ] No

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.


        300 shares in Caithness Coso Funding Corp. as of August 12, 2005
        ----------------------------------------------------------------

<PAGE>
                          CAITHNESS COSO FUNDING CORP.
                                    Form 10-Q
                       For the Quarter Ended June 30, 2005



                     PART I. FINANCIAL INFORMATION                      Page No.

ITEM 1.    Financial Statements

    Caithness Coso Funding Corp.
    Unaudited balance sheets at June 30, 2005 and December 31, 2004            4
    Unaudited statements of operations for the three-months ended
      June 30, 2005, the three-months ended June 30, 2004, the six-months
      ended June 30, 2005 and the six-months ended June 30, 2004               5
    Unaudited condensed statements of cash flows for the six-months
      ended June 30, 2005 and the six-months ended June 30, 2004               6
    Notes to the unaudited financial statements                                7

    Coso Finance Partners and Subsidiary
    Unaudited consolidated balance sheets at June 30, 2005 and
      December 31, 2004                                                        8
    Unaudited consolidated statements of operations for the three-months
      months ended June 30, 2005, the three-months ended June 30, 2004,
      the six-months ended June 30, 2005 and the six-months ended
      June 30, 2004                                                            9
    Unaudited consolidated condensed statements of cash flows for the
      six-months ended June 30, 2005 and the six-months ended
      June 30, 2004                                                           10
    Notes to the unaudited consolidated financial statements                  11

    Coso Energy Developers
    Unaudited balance sheets at June 30, 2005 and December 31, 2004           13
    Unaudited statements of operations for the three-months ended
      months ended June 30, 2005, the three-months ended June 30, 2004,
      the six-months ended June 30, 2005 and the six-months ended
      June 30, 2004                                                           14
    Unaudited condensed statements of cash flows for the six-months
      ended June 30, 2005 and the six-months ended June 30, 2004              15
    Notes to the unaudited financial statements                               16

    Coso Power Developers and Subsidiary
    Unaudited consolidated balance sheets at June 30, 2005 and
      December 31, 2004                                                       18
    Unaudited consolidated statements of operations for the three-months
      months ended June 30, 2005, the three-months ended June 30, 2004,
      the six-months ended June 30, 2005 and the six-months ended
      June 30, 2004                                                           19
    Unaudited consolidated condensed statements of cash flows for the
      six-months ended June 30, 2005 and the six-months ended
      June 30, 2004                                                           20
    Notes to the unaudited consolidated financial statements                  21

ITEM 2.     Management's Discussion and Analysis of Financial Condition and
             Results of Operations                                            23

ITEM 3.     Quantitative and Qualitative Disclosure about Market Risk         29

                                       2

ITEM 4.     Controls and Procedures                                           29

                           PART II. OTHER INFORMATION

ITEM 1.     Legal Proceedings                                                 30
ITEM 2.     Unregistered Sales of Equity Securities and Use of Proceeds       30
ITEM 3.     Defaults upon Senior Securities                                   30
ITEM 4.     Submission of Matters to a Vote of Security Holders               30
ITEM 5.     Other Information                                                 30
ITEM 6.     Exhibits                                                          30

                                       3
<PAGE>
<TABLE>
<CAPTION>
                                                    CAITHNESS COSO FUNDING CORP.
                                                      UNAUDITED BALANCE SHEETS
                                                       (Dollars in thousands)

                                                                                           June 30,            December 31,
                                                                                             2005                 2004
<S>                                                                                        <C>                 <C>
                            Assets:
Current Assets:
   Accrued interest receivable..................................................         $     762             $     883
   Current portion of project loan from Coso Finance Partners...................            15,524                15,100
   Current portion of project loan from Coso Energy Developers..................             9,365                 8,683
   Current portion of project loan from Coso Power Developers...................            11,713                11,697
                                                                                            ------                ------
                    Total current assets                                                    37,364                36,363


   Project loan from Coso Finance Partners......................................            65,286                71,750
   Project loan from Coso Energy Developers.....................................            62,062                66,217
   Project loan from Coso Power Developers......................................            44,135                48,830
                                                                                            ------                ------

                    Total assets                                                         $ 208,847             $ 223,160
                                                                                           =======               =======

                            Liabilities and Stockholders' Equity:

Current Liabilities:
    Senior secured notes:
    Accrued interest payable....................................................         $     762             $     883
    Current portion on project loans............................................            36,602                35,480
                                                                                            ------                ------
                   Total current liabilities                                                37,364                36,363


   9.05% notes due December 15, 2009............................................           171,483               186,797

   Stockholders' equity.........................................................                 -                     -
                                                                                           -------               -------

                   Total liabilities & stockholders' equity                              $ 208,847             $ 223,160
                                                                                           =======               =======




                              See accompanying notes to the unaudited financial statements

                                                         4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                       CAITHNESS COSO FUNDING CORP.
                                    UNAUDITED STATEMENTS OF OPERATIONS
                                          (Dollars in thousands)


                                          Three-Months        Three-Months        Six-Months        Six-Months
                                              Ended               Ended             Ended             Ended
                                             June 30,            June 30,          June 30,          June 30,
                                               2005                2004              2005              2004
<S>                                       <C>                 <C>                 <C>               <C>
Interest income.....................       $   4,962          $   5,689         $   9,937         $  11,364
Interest expense....................          (4,962)            (5,689)           (9,937)          (11,364)
                                               -----              -----             -----            ------
      Net income....................       $       -          $       -         $       -         $       -
                                               =====              =====             =====            ======





                       See accompanying notes to the unaudited financial statements

                                                    5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                            CAITHNESS COSO FUNDING CORP.
                                    UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
                                               (Dollars in thousands)


                                                                                      Six-Months        Six-Months
                                                                                        Ended             Ended
                                                                                       June 30,          June 30,
                                                                                         2005              2004
<S>                                                                                   <C>               <C>

Cash flows from investing activities - repayment of project loans........             $  14,313         $  12,646
Cash flows from financing activities - repayment of 9.05% notes..........               (14,313)          (12,646)
                                                                                         ------            ------

Net changes in cash......................................................             $       -         $       -
                                                                                         ======            ======
Supplemental cash flow disclosure:
     Cash paid for interest..............................................             $  10,058         $  11,476
                                                                                         ======            ======




                     See accompanying notes to the unaudited condensed financial statements

                                                    6
</TABLE>
<PAGE>
                          CAITHNESS COSO FUNDING CORP.
                   NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
                             (Dollars in thousands)


(1)      Organization and Operations

Caithness Coso Funding Corp.  (Funding  Corp.),  which was incorporated on April
22,  1999,  is a  single-purpose  Delaware  corporation  formed to issue  senior
secured  notes  (Notes) for its own account and as an agent  acting on behalf of
Coso  Finance  Partners  (CFP),  Coso Energy  Developers  (CED),  and Coso Power
Developers (CPD),  collectively,  the "Coso Partnerships." The Coso Partnerships
are California general Partnerships.

On May 28,  1999,  Funding  Corp.  sold  $413,000 of Notes.  The Notes have been
refinanced (See Note 3 below).  Pursuant to separate credit  agreements  between
Funding Corp. and each Coso  Partnership,  the net proceeds from the offering of
the Notes were loaned to the Coso Partnerships. Payment of the Notes is provided
for by payments made by the Coso  Partnerships  under their  respective  project
loans.  Funding Corp. has no material  assets other than the project loans,  and
does not conduct any  operations  apart from having  issued the Notes and making
the project loans to the Coso Partnerships.

(2)      Basis of Presentation

The accompanying  unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information.  Accordingly, certain information and
footnote  disclosures  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  rules.  Management
believes that the disclosures are adequate to make the information presented not
misleading when read in conjunction with the financial  statements and the notes
thereto in the audited  financial  statements  for the year ended  December  31,
2004.

The preparation of unaudited financial  statements in accordance with accounting
principles  generally  accepted in the United States of America requires Funding
Corp.  to make certain  estimates  and  assumptions  for the  reporting  periods
covered by the financial statements.  These estimates and assumptions affect the
reported  amounts  of  assets,  liabilities,  income  and  expenses  during  the
reporting  period.  Actual  results  could  differ  from  these  estimates.  The
financial information herein presented reflects all adjustments, consisting only
of normal  recurring  adjustments,  which are,  in the  opinion  of  management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily  indicative of results to be
expected for the full year.

(3)      Subsequent Events

On August 5, 2005, Funding Corp. issued $375 million of senior secured bonds due
June 15, 2019 and $90 million of  subordinated  secured  notes due June 15, 2014
(collectively,  the "Securities").  The proceeds of the Securities were put into
an  escrow  account  for  the  benefit  of  the  holders  of the  Notes,  and on
approximately  September  6, 2005,  the  proceeds of the escrow  account will be
released  to the  holders  of the Notes to repay  the  Notes in full.  Effective
August  5,  2005,  under the terms of the  Indenture  under  which the Notes are
outstanding,  the covenants of Funding Corp. and the Coso  Partnerships  will be
defeased,  and the related security  agreements and pledge agreements of Funding
Corp.  and the Coso  Partnerships  pertaining  to the Notes will be deemed to be
satisfied in full and will no longer be enforceable against Funding Corp. or the
Coso Partnerships.

                                       7

<PAGE>
<TABLE>
<CAPTION>
                                                COSO FINANCE PARTNERS
                                                   AND SUBSIDIARY
                                        UNAUDITED CONSOLIDATED BALANCE SHEETS
                                                (Dollars in thousands)


                                                                                         June 30,          December 31,
                                                                                           2005               2004
<S>                                                                                      <C>               <C>
                                       Assets:
Current Assets:
   Cash.........................................................................        $     265           $     791
   Restricted cash and cash equivalents.........................................           13,329              13,298
   Accounts receivable, (net of allowances of $216).............................            9,221               7,502
   Prepaid expenses & other assets..............................................               93                 702
   Inventory....................................................................            5,402               5,357
   Amounts due from related parties.............................................            1,759               1,583
                                                                                           ------              ------
                                       Total current assets                                30,069              29,233


Restricted cash and investments.................................................           15,151              14,894
Property, plant & equipment, (net of accumulated depreciation
   of $124,790 and $119,157, respectively)......................................          130,833             133,624
Power purchase contract, (net of accumulated amortization
   of $7,268 and $6,694, respectively)..........................................            7,076               7,650
Deferred financing costs, (net of accumulated amortization
   of $2,703 and $2,545, respectively)..........................................            1,420               1,578
                                                                                            -----               -----

                                       Total assets                                     $ 184,549           $ 186,979
                                                                                          =======             =======

                            Liabilities and Partners' Capital:

Current Liabilities:
   Accounts payable and accrued liabilities.....................................            2,749               4,601
   Amounts due to related parties...............................................              349                 606
   Current portion of project loan..............................................           15,524              15,100
                                                                                           ------              ------
                                       Total current liabilities                           18,622              20,307


Other liabilities...............................................................           15,937              15,648
Deferred revenue................................................................            1,012                  --
Amounts due to related parties..................................................            2,344               2,382
Project loan....................................................................           65,286              71,750
                                                                                           ------              ------
                                       Total liabilities                                  103,201             110,087

Partners' capital...............................................................           81,348              76,892
                                                                                           ------              ------

                                       Total liabilities & partners' capital            $ 184,549           $ 186,979
                                                                                          =======             =======




                     See accompanying notes to the unaudited consolidated financial statements

                                                       8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                      COSO FINANCE PARTNERS
                                                         AND SUBSIDIARY
                                         UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                     (Dollars in thousands)


                                                              Three-Months        Three-Months        Six-Months        Six-Months
                                                                  Ended               Ended             Ended             Ended
                                                                 June 30,            June 30,          June 30,          June 30,
                                                                   2005                2004              2005              2004
<S>                                                           <C>                 <C>                 <C>               <C>
Revenue:
   Energy revenues...................................          $   11,389          $   11,046         $   23,139        $   22,902
   Capacity revenues.................................               3,567               3,537              4,822             4,792
                                                                   ------              ------             ------            ------
          Total revenue..............................              14,956              14,583             27,961            27,694

Operating expenses:
   Plant operating expenses..........................               2,473               2,886              4,575             5,621
   Royalty expense...................................               2,345               2,801              4,279             5,027
   Depreciation and amortization.....................               3,135               2,850              6,207             5,698
                                                                    -----               -----             ------            ------
          Total operating expenses...................               7,953               8,537             15,061            16,346

          Operating income...........................               7,003               6,046             12,900            11,348

Other (income)/expenses:
    Interest and other income........................                (299)               (120)              (458)             (211)
    Interest expense.................................               1,937               2,188              3,880             4,372
    Noncash interest expense.........................                  79                  79                158               158
                                                                    -----               -----              -----             -----
          Total other expenses.......................               1,717               2,147              3,580             4,319
                                                                    -----               -----              -----             -----

           Net income................................          $    5,286          $    3,899         $    9,320        $    7,029
                                                                    =====               =====              =====             =====





                             See accompanying notes to the unaudited consolidated financial statements

                                                               9
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                      COSO FINANCE PARTNERS
                                         AND SUBSIDIARY
                              UNAUDITED CONSOLIDATED AND CONDENSED
                                   STATEMENTS OF CASH FLOWS
                                    (Dollars in thousands)


                                                                      Six-Months          Six-Months
                                                                        Ended               Ended
                                                                       June 30,            June 30,
                                                                         2005                2004
<S>                                                                   <C>                 <C>

Net cash provided by (used in) operating activities......             $  13,508           $  10,835
Net cash provided by (used in) investing activities......                (3,130)             (2,757)
Net cash provided by (used in) financing activities......               (10,904)             (7,931)
                                                                         ------               -----

Net change in cash.......................................             $    (526)          $     147
                                                                         ======               =====
Supplemental cash flow disclosure:
         Cash paid for interest..........................             $   3,930           $   4,414
                                                                          =====               =====





      See accompanying notes to the unaudited consolidated and condensed financial statements

                                               10
</TABLE>
<PAGE>
                              COSO FINANCE PARTNERS
                                 AND SUBSIDIARY
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in thousands)


(1)      Organization and Operation

Coso Finance Partners (CFP), a general partnership,  is engaged in the operation
of a 80 MW power generation facility located at the China Lake Naval Air Weapons
Station, China Lake, California.  CFP sells all electricity produced to Southern
California  Edison (Edison) under a 24-year power purchase  contract expiring in
2011.

(2)      Basis of Presentation

The accompanying  unaudited consolidated and condensed financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information. Accordingly, certain
information and footnote  disclosures  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 rules.
Management  believes that the  disclosures  are adequate to make the information
presented not misleading when read in conjunction with the financial  statements
and the notes  thereto in the audited  financial  statements  for the year ended
December 31, 2004.

The preparation of unaudited financial  statements in accordance with accounting
principles  generally  accepted in the United States of America  requires CFP to
make certain  estimates and assumptions for the reporting periods covered by the
financial  statements.  These  estimates  and  assumptions  affect the  reported
amounts of assets,  liabilities,  revenues  and  expenses  during the  reporting
period.  Actual  results  could  differ  from  these  estimates.  The  financial
information herein presented reflects all adjustments, consisting only of normal
recurring adjustments, which are, in the opinion of management,  necessary for a
fair statement of the results for interim periods presented. The results for the
interim periods are not necessarily indicative of results to be expected for the
full year. CFP has experienced  significant quarterly  fluctuations in operating
results and it expects that these fluctuations in energy revenues,  expenses and
net income will continue.

The data for the balance sheets  presented herein for June 30, 2005 and December
31, 2004 were derived from CFP's financial statements for the interim period and
fiscal  year then  ended and  includes  the  effect of  consolidating  New CLPSI
Company,  LLC  ("CLPSI")  as a result of the  adoption of  Financial  Accounting
Standards Board (FASB)  Interpretation No. 46 (revised December 2003), (FIN 46R)
Consolidation of Variable  Interest  Entities,  an  interpretation of Accounting
Research  Bulletin  No. 51, but does not  include  all  disclosures  required by
accounting principles generally accepted in the United States of America.

(3)      Accounts Receivable and Revenue Recognition

Accounts receivable primarily consist of receivables from Edison for electricity
delivered  and sold under a power  purchase  contract.  Operating  revenues  are
recognized  as income  during the period in which  electricity  is  delivered to
Edison.

(4)      Reclassifications

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

(5)      Asset Retirement Obligations

In June 2001, FASB issued Statement of Financial Accounting Standards (SFAS) No.
143,  Accounting for Asset  Retirement  Obligations.  This  Statement  addresses
financial   accounting  and  reporting  for  obligations   associated  with  the

                                       11

retirement of tangible  long-lived  assets and the associated  asset  retirement
costs and amends SFAS No. 19, Financial  Accounting and Reporting by Oil and Gas
Producing  Companies.  The Statement requires that the fair value of a liability
for an asset  retirement  obligation  be recognized in the period in which it is
incurred  if a  reasonable  estimate  of a fair value can be made,  and that the
associated  asset retirement costs be capitalized as part of the carrying amount
of the long-lived  asset. The Statement is effective for consolidated  financial
statements  issued for fiscal years beginning after June 15, 2002. On January 1,
2003, CFP adopted SFAS No. 143 and estimated the  restoration  costs CFP expects
to incur when the land lease with the Navy expires. Under the land lease, CFP is
required to remove all property, plant, and equipment to restore the land to its
original  state.  As of June 30, 2005 and  December 31,  2004,  the  accumulated
liability   associated   with  the   restoration   costs  were  $955  and  $910,
respectively, and are included in other liabilities.

(6)      Commitments and Contingencies

CFP is required to obtain a "Financial  Guarantee Bond for Closure Costs" (Water
Bond),  which  would be used in the event of  noncompliance  of the  remediation
obligation for waste  discharge.  As of June 30, 2005 and December 31, 2004, the
fair  value of the  Water  Bond  that is  reported  as a  noncurrent  restricted
investment is $156.

Settlement   Agreement  Between  Edison  and  the  California  Public  Utilities
Commission

On September 23, 2002,  the United States Court of Appeals for the Ninth Circuit
(Ninth Circuit) issued an opinion and order on appeal from the district  court's
stipulated  judgment which affirmed the stipulated judgment in part and referred
questions  based on California  state law to the California  Supreme Court.  The
appeals court stated that if the settlement  agreement violated California state
law then the appeals  court would be required to void the  stipulated  judgment.
The California Supreme Court accepted the Ninth Circuit's request to address the
issues  referred to in the  September 23, 2002 ruling.  On August 21, 2003,  the
California  Supreme Court found that state laws were not violated as a result of
the  settlement  agreements.  On December  19,  2003,  the Ninth  Circuit  fully
affirmed the district  court's  stipulated  judgment based on the reply from the
California Supreme Court. No appeal of this order was taken and it is now final.

Court of Appeals' Decision on Line Loss Factor

Edison filed a petition  for a writ of review of a January  2001 CPUC  decision,
claiming  that the  "floor"  line loss factor of 0.95 for  renewable  generators
violated the Public Utility Regulatory Policies Act of 1978.  Subsequently,  the
California  Court of Appeals issued a decision on August 20, 2002 in response to
the writ affirming the January 2001 CPUC decision,  except for the 0.95 "floor,"
which it rejected as an abuse of discretion  by the CPUC.  While this matter was
appealed to the California  Supreme  Court,  the petition for review was denied.
CFP is  currently  evaluating  potential  actions to redress  this issue.  CFP's
Agreement  set the loss factor at 1.0 for energy sold  between May 2002  through
May 2007.  After April 2007,  CFP will have a line loss factor of less than 1.0,
effectively decreasing revenues if Edison's challenge to the CPUC ruling stands.
CFP  cannot  predict  whether  any  subsequent  action  on this  matter  will be
successful.

(7)      Subsequent Events

On August 5, 2005, Funding Corp. issued $375 million of senior secured bonds due
June 15, 2019 and $90 million of  subordinated  secured  notes due June 15, 2014
(collectively,  the "Securities").  The proceeds of the Securities were put into
an  escrow  account  for  the  benefit  of  the  holders  of the  Notes,  and on
approximately  September  6, 2005,  the  proceeds of the escrow  account will be
released  to the  holders  of the Notes to repay  the  Notes in full.  Effective
August  5,  2005,  under the terms of the  Indenture  under  which the Notes are
outstanding, the covenants of Funding Corp. and CFP, Coso Energy Developers, and
Coso Power Developers,  collectively,  the "Coso Partnerships" will be defeased,
and the related security  agreements and pledge  agreements of Funding Corp. and
the Coso Partnerships  pertaining to the Notes will be deemed to be satisfied in
full and  will no  longer  be  enforceable  against  Funding  Corp.  or the Coso
Partnerships.

                                       12
<PAGE>
<TABLE>
<CAPTION>
                                                   COSO ENERGY DEVELOPERS
                                                  UNAUDITED BALANCE SHEETS
                                                   (Dollars in thousands)

                                                                                            June 30,            December 31,
                                                                                              2005                 2004
<S>                                                                                         <C>                 <C>
                                      Assets:
Current Assets:
   Cash.........................................................................           $     397             $     496
   Restricted cash and cash equivalents.........................................              10,122                10,850
   Accounts receivable..........................................................               8,544                 6,636
   Prepaid expenses and other assets............................................                  87                   930
   Amounts due from related parties.............................................                 496                   485
                                                                                              ------                ------
                                      Total current assets                                    19,646                19,397


Restricted investments..........................................................                 221                   221
Investment in Coso Transmission Line Partners...................................               2,374                 2,430
Advances to New CLPSI Company, LLC..............................................                 433                   459
Property, plant and equipment, (net of accumulated depreciation
   of $131,156 and $127,451, respectively)......................................             121,633               123,903
Power purchase contract, (net of accumulated amortization
   of $6,758 and $6,222, respectively)..........................................              14,685                15,221
Deferred financing costs, (net of accumulated amortization
   of $1,884 and $1,757, respectively)..........................................               1,148                 1,275
                                                                                             -------               -------

                                      Total assets                                         $ 160,140             $ 162,906
                                                                                             =======               =======

                              Liabilities and Partners' Capital:

Current Liabilities:
   Accounts payable and accrued liabilities.....................................           $   1,797             $  1,710
   Amounts due to related parties...............................................               1,485                1,648
   Current portion of project loan..............................................               9,365                8,683
                                                                                              ------               ------
                                      Total current liabilities                               12,647               12,041


     Other liabilities..........................................................               1,327                1,263
     Amounts due to related parties.............................................              26,685               26,449
     Project loan...............................................................              62,062               66,217
                                                                                             -------              -------
                                      Total liabilities                                      102,721              105,970

Partners' capital...............................................................              57,419               56,936
                                                                                             -------              -------

                                      Total liabilities & partners' capital                $ 160,140            $ 162,906
                                                                                             =======              =======




                               See accompanying notes to the unaudited financial statements

                                                            13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                  COSO ENERGY DEVELOPERS
                                            UNAUDITED STATEMENTS OF OPERATIONS
                                                  (Dollars in thousands)


                                                            Three-Months       Three-Months       Six-Months       Six-Months
                                                                Ended              Ended            Ended            Ended
                                                               June 30,           June 30,         June 30,         June 30,
                                                                 2005               2004             2005             2004

<S>                                                         <C>                <C>                <C>              <C>
Revenue:
   Energy revenues.................................          $    7,360         $   7,550         $  14,875        $  15,422
   Capacity revenues...............................               3,448             3,484             4,674            4,711
                                                                  -----             -----            ------           ------
          Total revenue............................              10,808            11,034            19,549           20,133

Operating expenses:
   Plant operating expenses........................               4,295             4,785             7,658            8,222
   Royalty expense.................................                 662               686               844              653
   Depreciation and amortization...................               2,109             2,358             4,241            4,715
                                                                  -----             -----            ------           ------
          Total operating expenses.................               7,066             7,829            12,743           13,590

          Operating income.........................               3,742             3,205             6,806            6,543

Other (income)/expenses:
   Interest and other income.......................                (418)             (230)             (697)            (541)
   Interest expense................................               1,677             1,903             3,353            3,801
   Noncash interest expense........................                  63                63               127              127
                                                                  -----             -----             -----            -----
          Total other expenses.....................               1,322             1,736             2,783            3,387
                                                                  -----             -----             -----            -----

           Net income..............................           $   2,420         $   1,469         $   4,023        $   3,156
                                                                  =====             =====             =====            =====




                               See accompanying notes to the unaudited financial statements

                                                           14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                        COSO ENERGY DEVELOPERS
                             UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
                                        (Dollars in thousands)



                                                                        Six-Months            Six-Months
                                                                          Ended                 Ended
                                                                         June 30,              June 30,
                                                                           2005                  2004


<S>                                                                     <C>                   <C>
Net cash provided by (used in) operating activities.......             $   7,565             $   6,900
Net cash provided by (used in) investing activities.......                  (651)                 (390)
Net cash provided by (used in) financing activities.......                (7,013)               (7,096)
                                                                           -----                 -----

Net change in cash........................................             $     (99)            $    (586)
                                                                           =====                 =====
Supplemental cash flow disclosure:
         Cash paid for interest...........................             $   3,389             $   3,838
                                                                           =====                 =====




                See accompanying notes to the unaudited condensed financial statements

                                                   15
</TABLE>
<PAGE>
                             COSO ENERGY DEVELOPERS
                   NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
                             (Dollars in thousands)



(1)      Organization and Operation

Coso Energy Developers (CED), a general partnership, is engaged in the operation
of a 80 MW power  generation  facility  located at the Coso Hot  Springs,  China
Lake,  California.  CED sells all  electricity  produced to Southern  California
Edison (Edison) under a 30-year power purchase contract expiring in 2019.

(2)      Basis of Presentation

The accompanying  unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information.  Accordingly, certain information and
footnote  disclosures  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  rules.  Management
believes that the disclosures are adequate to make the information presented not
misleading when read in conjunction with the financial  statements and the notes
thereto in the audited  financial  statements  for the year ended  December  31,
2004.

The preparation of unaudited financial  statements in accordance with accounting
principles  generally  accepted in the United States of America  requires CED to
make certain  estimates and assumptions for the reporting periods covered by the
financial  statements.  These  estimates  and  assumptions  affect the  reported
amounts of assets,  liabilities,  revenues  and  expenses  during the  reporting
period.  Actual  results  could  differ  from  these  estimates.  The  financial
information herein presented reflects all adjustments, consisting only of normal
recurring adjustments, which are, in the opinion of management,  necessary for a
fair statement of the results for interim periods presented. The results for the
interim periods are not necessarily indicative of results to be expected for the
full year. CED has experienced  significant quarterly  fluctuations in operating
results and it expects that these fluctuations in energy revenues,  expenses and
net income will continue.

(3)      Accounts Receivable and Revenue Recognition

Accounts receivable primarily consist of receivables from Edison for electricity
delivered  and sold under a power  purchase  contract.  Operating  revenues  are
recognized  as income  during the period in which  electricity  is  delivered to
Edison.

(4)      Reclassifications

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

(5)      Asset Retirement Obligations

In June 2001, FASB issued Statement of Financial Accounting Standards (SFAS) No.
143,  Accounting for Asset  Retirement  Obligations.  This  Statement  addresses
financial   accounting  and  reporting  for  obligations   associated  with  the
retirement of tangible  long-lived  assets and the associated  asset  retirement
costs and amends SFAS No. 19, Financial  Accounting and Reporting by Oil and Gas
Producing  Companies.  The Statement requires that the fair value of a liability
for an asset  retirement  obligation  be recognized in the period in which it is
incurred  if a  reasonable  estimate  of a fair value can be made,  and that the
associated  asset retirement costs be capitalized as part of the carrying amount
of the long-lived  asset. The Statement is effective for consolidated  financial
statements  issued for fiscal years beginning after June 15, 2002. On January 1,

                                       16

2003, CED adopted SFAS No. 143 and estimated the  restoration  costs CED expects
to incur when the land lease expires.  Under the land lease,  CED is required to
remove all  property,  plant,  and equipment to restore the land to its original
state.  As of June 30, 2005 and  December 31, 2004,  the  accumulated  liability
associated with the restoration costs were $1,327 and $1,263, respectively,  and
are included in other liabilities.

(6)      Commitments and Contingencies

CED is required to obtain a "Financial  Guarantee Bond for Closure Costs" (Water
Bond),  which  would be used in the event of  noncompliance  of the  remediation
obligation for waste  discharge.  As of June 30, 2005 and December 31, 2004, the
fair  value of the  Water  Bond  that is  reported  as a  noncurrent  restricted
investment is $142.

Settlement   Agreement  between  Edison  and  the  California  Public  Utilities
Commission

On September 23, 2002,  the United States Court of Appeals for the Ninth Circuit
(Ninth Circuit) issued an opinion and order on appeal from the district  court's
stipulated  judgment which affirmed the stipulated judgment in part and referred
questions  based on California  state law to the California  Supreme Court.  The
Ninth Circuit stated that if the settlement  agreement violated California state
law, then the appeals court would be required to void the  stipulated  judgment.
The California Supreme Court accepted the Ninth Circuit's request to address the
issues  referred to in the  September 23, 2002 ruling.  On August 21, 2003,  the
California  Supreme Court found that state laws were not violated as a result of
the  settlement  agreements.  On December  19,  2003,  the Ninth  Circuit  fully
affirmed the district  court's  stipulated  judgment based on the reply from the
California Supreme Court. No appeal of this order was taken and it is now final.

Court of Appeals Decision on Line Loss Factor

Edison filed a petition  for a writ of review of a January  2001 CPUC  decision,
claiming  that the  "floor"  line loss factor of 0.95 for  renewable  generators
violated the Public Utility Regulatory Policies Act of 1978.  Subsequently,  the
California  Court of Appeals issued a decision on August 20, 2002 in response to
the writ affirming the January 2001 CPUC decision,  except for the 0.95 "floor,"
which it rejected as an abuse of discretion  by the CPUC.  While this matter was
appealed to the California  Supreme  Court,  the petition for review was denied.
CED is  currently  evaluating  potential  actions to redress  this issue.  CED's
Agreement  set the loss factor at 1.0 for energy sold  between May 2002  through
May 2007.  After April 2007,  CED will have a line loss factor of less than 1.0,
effectively decreasing revenues if Edison's challenge to the CPUC ruling stands.
CED cannot predict whether any subsequent  action  regarding this matter will be
successful.

(7)      Subsequent Events

On August 5, 2005, Funding Corp. issued $375 million of senior secured bonds due
June 15, 2019 and $90 million of  subordinated  secured  notes due June 15, 2014
(collectively,  the "Securities").  The proceeds of the Securities were put into
an  escrow  account  for  the  benefit  of  the  holders  of the  Notes,  and on
approximately  September  6, 2005,  the  proceeds of the escrow  account will be
released  to the  holders  of the Notes to repay  the  Notes in full.  Effective
August  5,  2005,  under the terms of the  Indenture  under  which the Notes are
outstanding,  the covenants of Funding Corp. and CED, Coso Finance  Partners and
Coso Power Developers,  collectively the "Coso  Partnerships"  will be defeased,
and the related security  agreements and pledge  agreements of Funding Corp. and
the Partnerships  pertaining to the Notes will be deemed to be satisfied in full
and  will  no  longer  be  enforceable   against   Funding  Corp.  or  the  Coso
Partnerships.

                                       17
<PAGE>
<TABLE>
<CAPTION>
                                                  COSO POWER DEVELOPERS
                                                      AND SUBSIDIARY
                                           UNAUDITED CONSOLIDATED BALANCE SHEETS
                                                  (Dollars in thousands)


                                                                                            June 30,            December 31,
                                                                                              2005                 2004
<S>                                                                                        <C>                 <C>
                            Assets:
Current Assets:
   Cash.........................................................................           $     525             $     507
   Restricted cash and cash equivalents.........................................              10,093                 8,474
   Accounts receivable, (net of allowances of $82)..............................               9,374                 7,693
   Prepaid expenses and other assets............................................                  90                   634
   Amounts due from related parties.............................................               6,522                 6,421
                                                                                              ------                ------
                                        Total current assets                                  26,604                23,729


   Restricted investments.......................................................                 135                   135
   Advances to New CLPSI Company, LLC...........................................               1,911                 1,923
    Property, plant and equipment, (net of accumulated depreciation
      of $114,509 and $111,198, respectively)...................................             110,385               113,696
   Power purchase contract, (net of accumulated amortization
      of $17,698 and $16,301, respectively).....................................              13,040                14,437
   Deferred financing costs, (net of accumulated amortization
      of $3,199 and $3,090, respectively).......................................                 976                 1,085
                                                                                             -------               -------
                                        Total assets                                       $ 153,051             $ 155,005
                                                                                             =======               =======


                            Liabilities and Partners' Capital:

Current Liabilities:
   Accounts payable and accrued liabilities.....................................           $   1,844             $   2,372
   Amounts due to related parties...............................................               1,432                 1,313
   Current portion of project loan..............................................              11,713                11,697
                                                                                              ------                ------
                                        Total current liabilities                             14,989                15,382


   Other liabilities............................................................                 877                   835
   Project loan.................................................................              44,135                48,830
                                                                                              ------                ------
                                        Total liabilities                                     60,001                65,047


Minority interest...............................................................               2,374                 2,431
Partners' capital...............................................................              90,676                87,527
                                                                                             -------               -------

                                        Total liabilities & partners' capital              $ 153,051             $ 155,005
                                                                                             =======               =======




                     See accompanying notes to the unaudited consolidated financial statements

                                                     18
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                              COSO POWER DEVELOPERS
                                                  AND SUBSIDARY
                                       UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                                              (Dollars in thousands)



                                                           Three-Months        Three-Months        Six-Months        Six-Months
                                                               Ended               Ended             Ended             Ended
                                                              June 30,            June 30,          June 30,          June 30,
                                                                2005                2004              2005              2004
<S>                                                         <C>                 <C>               <C>               <C>
Revenue:
   Energy revenues....................................      $    7,236          $    7,939        $   15,386        $   16,361
   Capacity revenues..................................           3,506               3,504             4,738             4,738
                                                                ------              ------            ------            ------
          Total revenue...............................          10,742              11,443            20,124            21,099

Operating expenses:
   Plant operating expenses...........................           2,680               2,445             4,914             5,248
   Royalty expense....................................           1,670               1,962             3,160             3,606
   Depreciation and amortization......................           2,564               2,556             5,127             5,118
                                                                 -----               -----            ------            ------
          Total operating expenses....................           6,914               6,963            13,201            13,972

          Operating income............................           3,828               4,480             6,923             7,127

Other (income)/expenses:
   Interest and other income..........................            (267)               (140)             (429)             (268)
   Interest expense...................................           1,349               1,595             2,703             3,189
   Noncash interest expense...........................              55                  55               109               109
                                                                 -----               -----             -----             -----
          Total other expenses........................           1,137               1,510             2,383             3,030
                                                                 -----               -----             -----             -----

           Net income.................................      $    2,691          $    2,970        $    4,540        $    4,097
                                                                 =====               =====             =====             =====





                            See accompanying notes to the unaudited consolidated financial statements

                                                             19
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                          COSO POWER DEVELOPERS
                                             AND SUBSIDIARY
                                  UNAUDITED CONSOLIDATED AND CONDENSED
                                        STATEMENTS OF CASH FLOWS
                                         (Dollars in thousands)


                                                                      Six-Months            Six-Months
                                                                        Ended                 Ended
                                                                       June 30,              June 30,
                                                                         2005                  2004

<S>                                                                  <C>                   <C>
Net cash provided by (used in) operating activities........           $    8,183            $    8,449
Net cash provided by (used in) investing activities........               (2,038)               (1,727)
Net cash provided by (used in) financing activities........               (6,127)               (6,607)
                                                                           -----                 -----

Net change in cash.........................................           $       18            $      115
                                                                           =====                 =====

Supplemental cash flows disclosure:
         Cash paid for interest............................           $    2,739            $    3,224
                                                                           =====                 =====





        See accompanying notes to the unaudited consolidated and condensed financial statements

                                                    20
</TABLE>
<PAGE>
                              COSO POWER DEVELOPERS
                                 AND SUBSIDIARY
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in thousands)


(1)      Organization and Operation

Coso Power Developers (CPD), a general partnership,  is engaged in the operation
of a 80 MW power  generation  facility  located at the Coso Hot  Springs,  China
Lake,  California.  CPD sells all  electricity  produced to Southern  California
Edison (Edison) under a 20-year power purchase contract expiring in 2010.

(2)      Basis of Presentation

The accompanying  unaudited consolidated and condensed financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information. Accordingly, certain
information and footnote  disclosures  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 rules.
Management  believes that the  disclosures  are adequate to make the information
presented not misleading when read in conjunction with the financial  statements
and the notes  thereto in the audited  financial  statements  for the year ended
December 31, 2004.

The preparation of unaudited financial  statements in accordance with accounting
principles  generally  accepted in the United States of America  requires CPD to
make certain  estimates and assumptions for the reporting periods covered by the
financial  statements.  These  estimates  and  assumptions  affect the  reported
amounts of assets,  liabilities,  revenues  and  expenses  during the  reporting
period.  Actual  results  could  differ  from  these  estimates.  The  financial
information herein presented reflects all adjustments, consisting only of normal
recurring adjustments, which are, in the opinion of management,  necessary for a
fair statement of the results for interim periods presented. The results for the
interim periods are not necessarily indicative of results to be expected for the
full year. CPD has experienced  significant quarterly  fluctuations in operating
results and it expects that these fluctuations in energy revenues,  expenses and
net income will continue.

The data for the balance sheets  presented herein for June 30, 2005 and December
31, 2004 were derived from CPD's financial statements for the interim period and
fiscal  year  then  ended  and  includes  the  effect  of   consolidating   Coso
Transmission  Line  Partners  ("CTLP") as a result of the  adoption of Financial
Accounting Standards Board (FASB) Interpretation No. 46 (revised December 2003),
(FIN 46R)  Consolidation of Variable  Interest  Entities,  an  interpretation of
Accounting  Research  Bulletin  No. 51,  but does not  include  all  disclosures
required by  accounting  principles  generally  accepted in the United States of
America.

(3)      Accounts Receivable and Revenue Recognition

Accounts receivable primarily consist of receivables from Edison for electricity
delivered  and sold under a power  purchase  contract.  Operating  revenues  are
recognized  as income  during the period in which  electricity  is  delivered to
Edison.

(4)      Reclassifications

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

                                       21

(5)      Asset Retirement Obligation

In June 2001, FASB issued Statement of Financial Accounting Standards (SFAS) No.
143,  Accounting for Asset  Retirement  Obligations.  This  Statement  addresses
financial   accounting  and  reporting  for  obligations   associated  with  the
retirement of tangible  long-lived  assets and the associated  asset  retirement
costs and amends SFAS No. 19, Financial  Accounting and Reporting by Oil and Gas
Producing  Companies.  The Statement requires that the fair value of a liability
for an asset  retirement  obligation  be recognized in the period in which it is
incurred  if a  reasonable  estimate  of a fair value can be made,  and that the
associated  asset retirement costs be capitalized as part of the carrying amount
of the long-lived  asset. The Statement is effective for consolidated  financial
statements  issued for fiscal years beginning after June 15, 2002. On January 1,
2003, CPD adopted SFAS No. 143 and estimated the  restoration  costs CPD expects
to incur when the land lease with the Navy expires.  Under the land lease CPD is
required to remove all property, plant, and equipment to restore the land to its
original  state.  As of June 30, 2005 and  December 31,  2004,  the  accumulated
liability   associated  with  the   restorations   costs  were  $876  and  $835,
respectively, and are included in other liabilities.

(6)      Commitments and Contingencies

CPD is required to obtain a "Financial  Guarantee Bond for Closure Costs" (Water
Bond),  which  would be used in the event of  noncompliance  of the  remediation
obligation for waste  discharge.  As of June 30, 2005 and December 31, 2004, the
fair  value of the  Water  Bond  that is  reported  as a  noncurrent  restricted
investment is $135.

Settlement   Agreement  between  Edison  and  the  California  Public  Utilities
Commission

On September 23, 2002,  the United States Court of Appeals for the Ninth Circuit
(Ninth Circuit) issued an opinion and order on appeal from the district  court's
stipulated  judgment which affirmed the stipulated judgment in part and referred
questions  based on California  state law to the California  Supreme Court.  The
Ninth Circuit stated that if the settlement  agreement violated California state
law, then the appeals court would be required to void the  stipulated  judgment.
The California Supreme Court accepted the Ninth Circuit's request to address the
issues  referred to in the  September 23, 2002 ruling.  On August 21, 2003,  the
California Supreme Court found that state laws were not violated as of result of
the  settlement  agreements.  On December  19,  2003,  the Ninth  Circuit  fully
affirmed the district  court's  stipulated  judgment based on the reply from the
California Supreme Court.

Court of Appeals Decision on Line Loss Factor

Edison filed a petition  for a writ of review of a January  2001 CPUC  decision,
claiming  that the  "floor"  line loss factor of 0.95 for  renewable  generators
violated the Public Utility Regulator  Policies Act of 1978.  Subsequently,  the
California  Court of Appeals issued a decision on August 20, 2002 in response to
the writ affirming the January 2001 CPUC decision,  except for the 0.95 "floor,"
which it rejected as an abuse of discretion  by the CPUC.  While this matter was
appealed to the California  Supreme  Court,  the petition for review was denied.
CPD is  currently  evaluating  potential  actions to redress  this issue.  CPD's
Agreement  set the loss factor at 1.0 for energy sold  between May 2002  through
May 2007.  After April 2007,  CPD will have a line loss factor of less than 1.0,
effectively decreasing revenues if Edison's challenge to the CPUC ruling stands.
CPD cannot predict whether any subsequent  action  regarding this matter will be
successful.

(7)      Subsequent Events

On August 5, 2005, Funding Corp. issued $375 million of senior secured bonds due
June 15, 2019 and $90 million of  subordinated  secured  notes due June 15, 2014
(collectively,  the "Securities").  The proceeds of the Securities were put into
an  escrow  account  for  the  benefit  of  the  holders  of the  Notes,  and on
approximately  September  6, 2005,  the  proceeds of the escrow  account will be
released  to the  holders  of the Notes to repay  the  Notes in full.  Effective
August  5,  2005,  under the terms of the  Indenture  under  which the Notes are
outstanding,  the covenants of Funding Corp. and CPD, Coso Finance  Partners and
Coso Energy Developers,  collectively the "Coso Partnerships", will be defeased,
and the related security  agreements and pledge  agreements of Funding Corp. and
the Partnerships  pertaining to the Notes will be deemed to be satisfied in full
and  will  no  longer  be  enforceable   against   Funding  Corp.  or  the  Coso
Partnerships.

                                       22


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

     Except for financial information contained herein, the matters discussed in
this quarterly report may be considered  forward-looking  statements  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities Exchange Act of 1934, as amended,  and subject to the safe
harbor created by the Securities  Litigation Reform Act of 1995. Such statements
include  declarations  regarding the intent,  belief or current  expectations of
Caithness  Coso  Funding  Corp.  (Funding  Corp.),  Coso  Finance  Partners  and
Subsidiary   (the  Navy  I  Partnership),   Coso  Energy   Developers  (the  BLM
Partnership),   and  Coso  Power   Developers  and   Subsidiary   (the  Navy  II
Partnership),   collectively,  (the  Coso  Partnerships)  and  their  respective
management.  Such  statements  may be  identified  by  terms  such as  expected,
anticipated,  may, will, believe or other terms or variations of such words. Any
such  forward-looking  statements are not guarantees of future  performance  and
involve  a number  of risks  and  uncertainties;  actual  results  could  differ
materially from those indicated by such  forward-looking  statements.  Among the
important factors that could cause future operating results to differ materially
from those  anticipated  include,  but are not limited to: (i) risks relating to
the uncertainties in the California energy market,  (ii) the financial viability
of Southern California Edison (Edison),  (iii) risks related to the operation of
geothermal  power  plants,  (iv) the impact of avoided cost  pricing  along with
other  pricing  variables,  (v)  general  operating  risks,  including  resource
availability and regulatory oversight, (vi) changes in government regulation and
(vii) the effects of competition.


General

     Each  Coso  Partnership  owns  an  80MW  geothermal  power  plant,  and its
respective  transmission  lines,  wells,  gathering  systems  and other  related
facilities.  The Coso  Partnerships  are  located  near one  another  near  Coso
Junction,  California.  The  Navy I  Partnership  owns  Navy I and  its  related
facilities. The BLM Partnership owns BLM and its related facilities. The Navy II
Partnership owns Navy II and its related facilities.

     Each Coso partnership  sells 100% of the electrical energy generated at its
plant to Edison under a long-term Standard Offer No.4 power purchase  agreement.
The Edison power purchase  agreements  will expire in August 2011 for the Navy I
Partnership, in March 2019 for the BLM Partnership,  and in January 2010 for the
Navy II Partnership.

     Each Coso partnership is entitled to the following payments under its power
purchase agreement:

*    capacity payments for being able to produce  electricity at certain levels.
     Capacity  payments  are fixed  throughout  the life of each power  purchase
     agreement;

*    capacity  bonus  payments  if the  Coso  partnership  is  able  to  produce
     electricity  above a specified  level.  The maximum  annual  capacity bonus
     payment  available is also fixed throughout the life of each power purchase
     agreement; and

*    energy  payments  which are based on the  amount  of  electricity  the Coso
     Partnership's plant actually produces.

     Edison is required to make energy payments to the Coso  Partnerships  based
on its avoided cost of energy,  which is its cost to generate  electricity if it
were to produce  electricity itself or buy it from another power producer rather
than buy it from the Coso Partnerships.

     Edison entered into an agreement  (Agreement) with the Coso Partnerships on
June 19, 2001 that  addressed  renewable  energy  pricing and issues  concerning
California's  energy crisis.  The  Agreement,  which was amended on November 30,

                                       23

2001,  established May 1, 2002 as the date the Coso Partnerships began receiving
a fixed energy rate of 5.37 cents per kWh for five (5) years in lieu of the rate
calculated  based on the  avoided  cost of energy.  Subsequent  to the five year
period  that  expires in April  2007,  Edison  will be  required  to make energy
payments to the Coso Partnerships based on its avoided cost of energy until each
partnership's power purchase agreement expires.  The California Public Utilities
Commission  (CPUC) has initiated a hearing to  re-evaluate  the  methodology  of
calculating  the  avoided  cost of energy in the future.  It is not  possible to
predict with accuracy the likely level of future  avoided cost of energy prices.
Factors which may impact the future avoided cost of energy prices include, among
other things, the volatility of natural gas markets and regulatory issues.

     Edison  filed a  petition  for a writ of  review  of a  January  2001  CPUC
decision,  claiming  that the  "floor"  line loss  factor of 0.95 for  renewable
generators  violated the Public Utility Regulatory Policies Act of 1978 (PURPA).
Subsequently,  the  California  Court of Appeals issued a decision on August 20,
2002 in response to the writs  affirming the January 2001 CPUC decision,  except
for the 0.95  "floor",  which it rejected as an abuse of discretion by the CPUC.
While this matter was appealed to the California Supreme Court, the petition for
review was denied.  The Coso  Partnerships  are currently  evaluating  potential
actions to redress this issue.  Their Agreements set the line loss factor at 1.0
for all energy sold between May 2002 through April 2007.  After April 2007,  the
Coso  Partnerships  will have a line loss  factor of less than 1.0,  effectively
decreasing  revenues if Edison's  challenge to the CPUC ruling stands.  The Coso
Partnerships  cannot predict whether any subsequent action regarding this matter
will be successful.

     In 1994, the Coso Partnerships  implemented a steam-sharing  program, under
the Coso Geothermal Exchange Agreement. The purpose of the steam-sharing program
is to enhance the management of the Coso geothermal resource and to optimize the
resource's overall benefits to the Coso Partnerships by transferring steam among
the  Coso  Partnerships.  Under  the  steam  sharing  program,  the  partnership
receiving the steam transfer  splits revenue earned from  electricity  generated
with the partnership that transferred the steam.

     The Coso  Partnerships  are required to make  royalty  payments to the U.S.
Navy and the Bureau of Land Management.  On November 1, 2004 the Navy I and Navy
II  Partnerships'  entered into a new agreement ("New Contract") with the United
States Navy terminating the existing contract that was due to expire on December
31, 2009. Under the terms of the New Contract, the royalty paid to the U.S. Navy
was  restructured so that the Navy I and Navy II  Partnerships  pay at a rate of
15% of gross revenues  received up to an annual base revenue amount.  Beyond the
annual  base  revenue  amount,  the  U.S.  Navy  and  the  Navy  I and  Navy  II
Partnerships  will split the additional  revenues,  on a 50/50 basis,  until the
U.S. Navy receives a maximum of 20% of all gross revenue.

     Under the  terminated  contract with the U. S. Navy, the Navy I Partnership
was obligated to pay royalties for Units 2 and 3 at 20% of gross revenue through
2009 and the Navy II Partnership  was obligated to pay royalties at 18% of gross
revenue through 2004, and then increase to 20% through 2009.  Additionally,  the
Navy I  Partnership  was obligated to pay a royalty for Unit I consisting of the
payment of the U.S.  Navy's  electric bill for the China Lake Weapons  Facility,
subject to an indexed  reimbursement  from the U.S. Navy. The  reimbursement was
based on a pricing  formula for tariff  rates  charged by Edison.  Additionally,
under the terms of the terminated  agreement,  the Navy was compensated annually
for any savings in electrical usage at the U.S. Navy's Facility below a baseline
amount ("Conserved Power"). Upon termination of the Navy Contract,  the Navy was
paid $1.2 million for Conserved  Power from January 1, 2004 through  October 31,
2004. The  terminated  contract also obligated the Navy I Partnership to fund an
escrow  account  so that  the Navy I  Partnership  would  pay the U.S.  Navy $25
million on December  31,  2009.  Accordingly,  $111,000  was  deposited  monthly
through  October 31, 2004.  That provision was also  terminated and a new escrow
arrangement was entered into and the amount the Navy I Partnership owes the U.S.
Navy is now $18  million.  That  payment  is secured  by the  existing  funds on
deposit so that funds plus accrued  interest  are  expected to  aggregate  $18.0
million by December 31, 2009. Finally, in the terminated contracts the U.S. Navy
had the right to  terminate  the  contracts  at any time for their  convenience.
Under the New Contract that right was eliminated.

                                       24

     The BLM  Partnerships  geothermal  lease  initially had a term of ten years
ending in 1998 with  automatic  extensions  until  October 31, 2035,  so long as
geothermal  steam is  commercially  produced.  The royalty paid to the Bureau of
Land Management is 10% of the net value of steam produced based on a calculation
known as the netback, which is estimated and paid monthly with an annual true-up
after year-end.

     The Coso  Partnerships  also pay other  royalties at various rates which in
the aggregate are not material.

     Funding Corp. is a special purpose corporation and is equally owned by each
of the Coso  Partnerships.  It was formed for the  purpose of issuing the senior
secured  notes  (Notes)  on behalf of the Coso  Partnerships  who have  jointly,
severally, and unconditionally guaranteed repayment of the Notes.

     On May 28, 1999,  Funding Corp.  issued $110.0  million of 6.80% Notes that
were due in 2001 and paid off on December 15, 2001,  and $303.0 million of 9.05%
Notes  due in  2009.  The  proceeds  from  the  Notes  were  loaned  to the Coso
Partnerships  and are payable to Funding  Corp.  from  payments of principal and
interest on the Notes. Funding Corp. does not conduct any other operations apart
from serving as the issuer of the Notes.

     On August 5, 2005,  Funding  Corp.  issued $375  million of senior  secured
bonds due June 15, 2019 and $90 million of  subordinated  secured notes due June
15, 2014 (collectively,  the "Securities").  The proceeds of the Securities were
put into an escrow  account for the benefit of the holders of the Notes,  and on
approximately  September  6, 2005,  the  proceeds of the escrow  account will be
released  to the  holders  of the Notes to repay  the  Notes in full.  Effective
August  5,  2005,  under the terms of the  Indenture  under  which the Notes are
outstanding,  the covenants of Funding Corp. and the Coso  Partnerships  will be
defeased,  and the related security  agreements and pledge agreements of Funding
Corp.  and the Coso  Partnerships  pertaining  to the Notes will be deemed to be
satisfied in full and will no longer be enforceable against Funding Corp. or the
Coso Partnerships.


Capacity Utilization

     For purposes of consistency in financial  presentation,  the plant capacity
factor for each of the Coso  Partnerships is based on a nominal  capacity amount
of 80MW (240MW in the aggregate).  The Coso  Partnerships have a gross operating
capacity  that  allows  for the  production  of  electricity  in excess of their
nominal capacity  amounts.  Utilization of this operating margin is based upon a
number of factors and can be expected to vary  throughout  the year under normal
operating conditions.

     The following  data includes the operating  capacity  factor,  capacity and
electricity  production  (in kWh) for each  Coso  Partnership  on a  stand-alone
basis:
<TABLE>
<CAPTION>
                                                           Three-Months Ended            Six-Months Ended
                                                                 June 30                      June 30
<S>                                                      <C>                <C>                <C>               <C>
                                                         2005               2004               2005              2004
                                                         ----               ----               ----              ----
   Navy I Partnership (stand alone)
     Operating capacity factor                           96.4%              94.0%              98.9%             98.6%
     Capacity (MW) (average)                             77.12              75.24              79.08             78.86
     kWh produced (000s)                               168,440            164,321            343,530           344,471


   BLM Partnership (stand alone)
     Operating capacity factor                           82.1%              85.7%              84.5%             87.0%
     Capacity (MW) (average)                             65.65              68.57              67.59             69.63
     kWh produced (000s)                               143,386            149,749            293,610           304,159

                                                              25

   Navy II Partnership (stand alone)
     Operating capacity factor                           97.7%             102.8%             102.4%            105.6%
     Capacity (MW) (average)                             78.16              82.21              81.90             84.51
     kWh produced (000s)                               170,700            179,549            355,780           369,129
</TABLE>
     Total energy  production for the Navy I Partnership and the BLM Partnership
remained  consistent for the three-months ended June 30, 2005 as compared to the
same  period  in 2004.  Total  energy  production  for the  Navy II  Partnership
decreased  for the  three-months  ended June 30,  2005,  as compared to the same
period in 2004,  primarily due to lower steam production resulting from high gas
content and bridging in two production wells.  Modifications are currently being
made to both wells and it is anticipated  they will return to service before the
end of the third  quarter.  Total energy  production  for the Coso  Partnerships
remained  consistent for the  six-months  ended June 30, 2005 as compared to the
same period in 2004. The overall effort continues to maximize production through
well maintenance and capital  improvements,  including  improvements to existing
production  wells and  additional  steam-field  piping  modifications.  The Coso
Partnerships  continue to work on enhancing the steam utilization and efficiency
of the projects through a turbine enhancement program and additional steam-field
piping modifications.  With respect to the reservoir,  an injection augmentation
program,  aimed at improving reservoir pressure and minimizing resource decline,
is currently in the engineering design and permitting phase. The funds necessary
to implement the capital  improvement  program are expected to be available from
reserves  established  under the Notes and from excess cash flow generated after
debt service.


Results of Operations for the Three and Six-months ended June 30, 2005 and 2004

     The following  discusses the results of operations of the Coso Partnerships
for the three and  six-months  ended June 30, 2005 and 2004  (dollar  amounts in
tables are in thousands, except per kWh data):

Revenue
<TABLE>
<CAPTION>
                                      Three-Months           Three-Months             Six-Months             Six-Months
                                          Ended                  Ended                  Ended                  Ended
                                      June 30, 2005          June 30, 2004          June 30, 2005          June 30, 2004
<S>                                  <C>  <C>              <C>  <C>              <C>  <C>             <C>  <C>
                                      $    Cents/kWh         $    Cents/kWh         $    Cents/kWh         $    Cents/kWh
                                      -    ---------         -    ---------         -    ---------         -    ---------
Total Operating Revenues
including steam transfers
  Navy I Partnership                14,956     8.9         14,583     8.9         27,961     8.1         27,694     8.0
  BLM Partnership                   10,808     7.5         11,034     7.4         19,549     6.7         20,133     6.6
  Navy II Partnership               10,742     6.3         11,443     6.4         20,124     5.7         21,099     5.7
</TABLE>

     The Coso Partnerships sell all electricity  generated to Edison under their
respective  power  purchase  agreement.  Total  operating  revenues  consist  of
capacity payments, capacity bonus payments, and energy payments, including steam
transfers  discussed above. Total operating revenues for the Navy II Partnership
decreased for the three-month period ended June 30, 2005 as compared to the same
period in 2004, due to the lower steam production discussed above.

Plant Operating Expense
<TABLE>
<CAPTION>
                                      Three-Months           Three-Months             Six-Months             Six-Months
                                          Ended                  Ended                  Ended                  Ended
                                      June 30, 2005          June 30, 2004          June 30, 2005          June 30, 2004
<S>                                  <C>  <C>               <C>  <C>               <C>  <C>               <C>  <C>
                                      $    Cents/kWh         $    Cents/kWh         $    Cents/kWh         $    Cents/kWh
                                      -    ---------         -    ---------         -    ---------         -    ---------

  Navy I Partnership                2,473      1.5         2,886      1.8         4,575      1.3         5,621      1.6
  BLM Partnership                   4,295      3.0         4,785      3.2         7,658      2.6         8,222      2.7
  Navy II Partnership               2,680      1.6         2,445      1.4         4,914      1.4         5,248      1.4
</TABLE>

     Plant operating  expense consists of labor and related  expenses,  supplies
and  maintenance,   property  taxes,  insurance,  workovers  and  administrative
expense.  Plant operating expense for the Navy I and BLM Partnerships  decreased
for the three and six-months ended June 30, 2005, as compared to the same period
in 2004,  primarily due to decreased  well workover costs which are scheduled to
occur  later this year.  Plant  operating  expense  for the Navy II  Partnership
increased  for the  three-month  period ended June 30, 2005,  as compared to the

                                       26

same period in 2004, primarily due to the acceleration of well workover costs in
the  current  period.  Plant  operating  expense  for the  Navy  II  Partnership
decreased for the  six-month  period ended June 30, 2005 as compared to the same
period in 2004  primarily due to lower well workover  costs in the first quarter
that started to occur in the second quarter.


Royalty Expense
<TABLE>
<CAPTION>
                                      Three-Months           Three-Months             Six-Months             Six-Months
                                          Ended                  Ended                  Ended                  Ended
                                      June 30, 2005          June 30, 2004          June 30, 2005          June 30, 2004
<S>                                  <C>  <C>               <C>  <C>               <C>  <C>               <C>  <C>
                                      $    Cents/kWh         $    Cents/kWh         $    Cents/kWh         $    Cents/kWh
                                      -    ---------         -    ---------         -    ---------         -    ---------
  Navy I Partnership                2,345      1.4         2,801      1.7         4,279      1.2         5,027      1.5
  BLM Partnership                     662      0.5           686      0.5           844      0.3           653      0.2
  Navy II Partnership               1,670      1.0         1,962      1.1         3,160      0.9         3,606      1.0
</TABLE>

     Royalty expense for the Navy I and Navy II  Partnerships  decreased for the
three and  six-months  ended June 30,  2005,  as  compared to the same period in
2004,  primarily due to the change in royalty  structure  under the terms of the
New Contract with the U.S. Navy  discussed  above.  Royalty  expense for the BLM
Partnership increased for the six-months ended June 30, 2005, as compared to the
same period in 2004, due to a large favorable  adjustment in 2004 resulting from
the annual  reconciliation  performed  in the first  quarter  under the  netback
royalty calculation.


Depreciation and Amortization

     Depreciation and amortization expense for the Navy I Partnership  increased
by $285 and $509 for the three and six-months ended June 30, 2005  respectively,
as compared  to the same  periods in 2004,  due to an  increase  in  capitalized
assets  associated  with a new well placed in service in  December of 2004.  The
effect of the Financial Accounting Standards Board (FASB)  Interpretation No. 46
(revised  December 2003) (FIN 46R) resulted in an increase to  depreciation  and
amortization  expense for the Navy I  Partnership  for the three and  six-months
ended June 30, 2005 and June 30, 2004, of $60 and $122,  respectively,  for both
periods. Depreciation and amortization expense for the BLM Partnership decreased
by $249 and $474 for the three and six-months ended June 30, 2005  respectively,
as  compared  to the same  periods  in 2004,  due to the  older  wells and plant
overhauls being fully  depreciated  during 2004.  Depreciation  and amortization
expense for the Navy II Partnership  remained  relatively constant for the three
and six-months ended June 30, 2005 respectively, as compared to the same periods
in 2004.  The effect of FIN 46R  resulted  in an increase  to  depreciation  and
amortization  expense for the Navy II  Partnership  for the three and six-months
ended June 30, 2005 and June 30, 2004, of $60 and $121,  respectively,  for both
periods.


Interest and Other Income

     Interest  and  other  income  for the Navy I, BLM and Navy II  Partnerships
increased by $179, $188 and $127,  respectively for the three-months  ended June
30, 2005 and $247, $156 and $161, respectively for the six-months ended June 30,
2005,  as compared to the same periods in 2004,  due to higher  market rates for
fixed income  investments  during those periods in 2005.  The effect of FASB FIN
46R  resulted  in an  increase  to  interest  and  other  income  for the Navy I
Partnership for the three and six-months  ended June 30, 2005 and June 30, 2004,
of $40 and $81, respectively for both periods. The effect of FIN 46R on interest
and other income for the Navy II Partnership for the three and six-months  ended
June 30, 2005 and June 30, 2004,  was an increase of $28 and $56,  respectively,
for both periods.

                                       27
Interest Expense

     Interest expense for the Navy I, BLM and Navy II Partnerships  decreased by
$251, $226 and $246, respectively,  for the three-months ended June 30, 2005 and
decreased by $492, $448 and $486, respectively for the six-months ended June 30,
2005,  as  compared to the same  periods in 2004,  due to the  reduction  in the
principal amount of the project loan from Funding Corp.


Liquidity and Capital Resources

     Each of the Coso Partnerships  derive  substantially all of their cash flow
from Edison  under their power  purchase  agreements  and from  interest  income
earned on funds on deposit. The Coso Partnerships have used their cash primarily
for capital  expenditures for power plant  improvements,  resource and operating
costs, distributions to partners and payments with respect to the project loan.

     The Coso  Partnerships'  cash flow  obligations over the next several years
consist of debt  service  payments to Funding  Corp.  as they come due under the
Securities as discussed below. The Coso  Partnerships  expect to be able to meet
these obligations from operating cash flow. Historically,  any excess cash after
debt service has either been reserved for capital improvements or distributed to
the partners.

     The Coso  Partnerships'  ability to meet their obligations as they come due
will depend upon the ability of Edison to meet its  obligations  under the terms
of the standard offer No. 4 power purchase agreements and the Coso Partnerships'
ability to continue to generate electricity.  Edison's failure to pay its future
obligations may have a material adverse effect on the Coso Partnerships' ability
to make  debt  service  payments  to  Funding  Corp.  as they come due under the
Securities.

     On August 5, 2005,  Funding  Corp.  issued $375  million of senior  secured
bonds due June 15, 2019 and $90 million of  subordinated  secured notes due June
15, 2014 (collectively,  the "Securities").  The proceeds of the Securities were
put into an escrow  account for the benefit of the holders of the Notes,  and on
approximately  September  6, 2005,  the  proceeds of the escrow  account will be
released  to the  holders  of the Notes to repay  the  Notes in full.  Effective
August  5,  2005,  under the terms of the  Indenture  under  which the Notes are
outstanding,  the covenants of Funding Corp. and the Coso  Partnerships  will be
defeased,  and the related security  agreements and pledge agreements of Funding
Corp.  and the Coso  Partnerships  pertaining  to the Notes will be deemed to be
satisfied in full and will no longer be enforceable against Funding Corp. or the
Coso Partnerships.

     Net cash from operating activities for the Navy I Partnership  increased by
$2,673 for the six-months ended June 30, 2005, as compared to the same period in
2004,  primarily due to increased net income partially offset by increased trade
payables.  Net cash  used in  investing  activities  for the Navy I  Partnership
increased by $373 for the  six-months  ended June 30,  2005,  as compared to the
same period in 2004, primarily due to increased capital  expenditures  partially
offset by a decrease in restricted cash requirements  associated with the Notes.
Net cash used in financing  activities  for the Navy I Partnership  increased by
$2,973 for the six-months ended June 30, 2005, as compared to the same period in
2004, due to an increase in debt payments and partner distributions.

     Net cash from  operating  activities for the BLM  Partnership  increased by
$665 for the  six-months  ended June 30, 2005, as compared to the same period in
2004,  primarily  due to  increased  net  income.  Net  cash  used in  investing
activities for the BLM  Partnership  increased by $261 for the six-months  ended
June 30,  2005,  as  compared  to the same  period  in  2004,  primarily  due to
increased capital expenditures partially offset by a decrease in restricted cash
requirements associated with the Notes.

     Net cash from operating  activities  for the Navy II  Partnership  remained
consistent  for the  six-months  ended June 30,  2005,  as  compared to the same
period  in  2004.  Net  cash  used  in  investing  activities  for  the  Navy II
Partnership  increased  by $311  for the  six-months  ended  June 30,  2005,  as
compared  to the same  period in 2004,  primarily  due to an increase in capital
expenditures.  Net cash used in financing activities for the Navy II Partnership
decreased by $480 for the  six-months  ended June 30,  2005,  as compared to the
same period in 2004, primarily due to decreased partners distributions partially
offset by increased debt payments.

                                       28

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Risk Factors

     Operating the Coso projects involves, among other things, general economic,
financial,  competitive,  legislative,  legal, regulatory and other factors that
are beyond  management's  control.  Changes in these  factors could make it more
expensive  to  operate  the  Coso  projects,   or  require   additional  capital
expenditures,  or  reduce  certain  benefits  currently  available  to the  Coso
Partnerships.  There are a variety of other risks that affect the Coso projects,
some of which are beyond management's control, including:

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

     o    in light of the  uncertainty of the Western energy  markets,  Edison's
          financial   viability  may  be   considered   uncertain  and  accounts
          receivable from Edison could be reduced or eliminated;

     o    the Coso geothermal resource could be interrupted or unavailable;

     o    operating costs could increase;

     o    changes  in  the  regulatory   structure   which  govern  the  current
          operations of the Coso Partnerships.

     o    future  competition  may  lead  to an  accelerated  depletion  of  the
          resource;

     o    energy prices paid by Edison could decrease or terminate;

     o    delivery of electrical energy to Edison could be disrupted;

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

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

     o    the operators of the Coso projects could suffer labor disputes;

     o    the   government   could  change  permit  or   governmental   approval
          requirements restricting operations;

     o    third parties could fail to perform their  contractual  obligations to
          the Coso Partnerships; and

     o    catastrophic events, such as fires, earthquakes,  explosions,  floods,
          severe storms or other occurrences  including  terrorism or war, could
          affect one or more of the Coso projects, the Navy or Edison.

     In  addition,   the  Coso  Partnerships  must  meet  specified  performance
requirements under their respective power purchase  agreements during the months
of June through  September  to continue to qualify for the maximum  capacity and
capacity  bonus  payments.  If one or more of the events  listed above occur and
substantially  affect the  performance of one or more of the plants during these
months, operating revenues would be significantly decreased.

Item 4.  Controls and Procedures

     The Registrant's  Chief Executive  Officer and Chief Financial Officer (the
Registrant's  principal  executive  officer  and  principal  financial  officer,
respectively)  have  concluded,  based on their  evaluation as of June 30, 2005,
that the design and  operation  of the  Registrant's  "disclosure  controls  and
procedures" (as defined in Rules 13a-15(e) under the Securities  Exchange Act of
1934,  as amended  ("Exchange  Act")) are  effective to ensure that  information

                                       29

required to be disclosed by the  Registrant in the reports filed or submitted by
the  Registrant  under the Exchange  Act is  accumulated,  recorded,  processed,
summarized  and  reported  to  the   Registrant's   management,   including  the
Registrant's  principal  executive officer and principal  financial officer,  as
appropriate  to allow timely  decisions  regarding  whether or not disclosure is
required.

     During  the  quarter  ended  June 30,  2005,  there  were no changes in the
Registrant's  "internal  controls over financial  reporting" (as defined in Rule
13a-15(f)  under  the  Exchange  Act)  that  have  materially  affected,  or are
reasonably likely to materially affect, the Registrant's  internal controls over
financial reporting.

                           PART II. OTHER INFORMATION


Item 1.           Legal Proceedings

General

     The Coso  Partnerships are currently parties to various items of litigation
relating to day-to-day operations, none of which, if determined adversely, would
be material to the  financial  condition  and results of  operations of the Coso
Partnerships, either individually or taken as a whole.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

            None.

Item 3.     Defaults Upon Senior Securities

            None.

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

            None.

Item 5.     Other Information

            None.

Item 6.     Exhibits

            31.1   Section 15d-14(a) Certification of Chief Executive Officer
            31.2   Section 15.d-14(a)Certification of Chief Financial Officer
            32.1   Section 1350 Certification of Chief Executive Officer
            32.2   Section 1350 Certification of Chief Financial Officer
            99.1   Supplemental Consolidated and Combined Financial Information
                   for the Coso Partnerships and Subsidiaries

                                       30
<PAGE>
                                  Exhibit 31.1

          CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION
                    302(a) OF THE SARBANES-OXLEY ACT OF 2002

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

1.   I have  reviewed  this  quarterly  report  on Form 10-Q of  Caithness  Coso
     Funding  Corp.,   Coso  Finance   Partners  and  Subsidiary,   Coso  Energy
     Developers,  and Coso Power  Developers and Subsidiary  (collectively,  the
     Registrant);

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;

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:  August 12, 2005                     Caithness Coso Funding Corp.
                                           a Delaware Corporation

                                           By: /S/ JAMES D. BISHOP, SR.
                                               ------------------------
                                                   James D. Bishop, Sr.
                                                   Director, Chairman &
                                                   Chief Executive Officer



                                       31
<PAGE>
                                  Exhibit 31.2

          CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION
                    302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher T. McCallion, certify that:

1.   I have  reviewed  this  quarterly  report  on Form 10-Q of  Caithness  Coso
     Funding  Corp.,   Coso  Finance   Partners  and  Subsidiary,   Coso  Energy
     Developers,  and Coso Power  Developers and Subsidiary  (collectively,  the
     Registrant);

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;

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: August 12, 2005                  Caithness Coso Funding Corp.
                                       a Delaware Corporation

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



                                       32
<PAGE>
                                  Exhibit 32.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection  with the Quarterly  Report of Caithness Coso Funding Corp.,  Coso
Finance  Partners  and  Subsidiary,  Coso  Energy  Developers,  and  Coso  Power
Developers and Subsidiary  (collectively,  the  Registrant) on Form 10-Q for the
period ended June 30, 2005 as filed with the Securities and Exchange  Commission
on the date  hereof (the  Report),  I, James D.  Bishop,  Sr.,  Chief  Executive
Officer of the  Registrant,  certify,  to the best of my  knowledge  and belief,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects, the financial condition and result of operations of
          the Registrant.


Date:  August 12, 2005                   Caithness Coso Funding Corp.
                                         a Delaware Corporation

                                         By: /S/ JAMES D. BISHOP, SR.
                                             ------------------------
                                                 James D. Bishop, Sr.
                                                 Director, Chairman &
                                                 Chief Executive Officer



                                       33
<PAGE>
                                  Exhibit 32.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection  with the Quarterly  Report of Caithness Coso Funding Corp.,  Coso
Finance  Partners  and  Subsidiary,  Coso  Energy  Developers,  and  Coso  Power
Developers and Subsidiary  (collectively,  the  Registrant) on Form 10-Q for the
period ended June 30, 2005 as filed with the Securities and Exchange  Commission
on the date hereof (the Report),  I,  Christopher T. McCallion,  Chief Financial
Officer of the  Registrant,  certify,  to the best of my  knowledge  and belief,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects, the financial condition and result of operations of
          the Registrant.


Date:  August 12, 2005                  Caithness Coso Funding Corp.
                                        a Delaware Corporation

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



                                       34

<PAGE>
                                  Exhibit 99.1

          Supplemental Consolidated and Combined Financial Information
                   for the Coso Partnerships and Subsidiaries


     The following  information  presents  unaudited  consolidated  and combined
financial statements of the Coso Partnerships and Subsidiaries.  These financial
statements represent a consolidation and combination of the financial statements
of Caithness Coso Funding Corp., Coso Finance Partners,  Coso Energy Developers,
Coso  Power  Developers,  New  CLPSI  Company,  LLC and Coso  Transmission  Line
Partners for the periods indicated.  This supplemental  financial information is
not required by accounting principles generally accepted in the United States of
America and has been provided to facilitate a more  comprehensive  understanding
of the  financial  position,  operating  results  and  cash  flows  of the  Coso
Partnerships and Subsidiaries as a whole, which jointly and severally  guarantee
the repayment of the Notes. The unaudited  consolidated  and combined  financial
statements should be read in conjunction with each individual Coso Partnership's
and Subsidiaries financial statements and their accompanying notes.

     The  financial  information  herein  presented  reflects  all  adjustments,
consisting only of normal  recurring  adjustments,  which are, in the opinion of
management,  necessary for a fair  statement of the results for interim  periods
presented. The results for the interim periods are not necessarily indicative of
results to be expected for the full year.


                                       35
<PAGE>
<TABLE>
<CAPTION>
                                                    COSO PARTNERSHIPS
                                   UNAUDITED CONSOLIDATED AND COMBINED BALANCE SHEETS
                                                 (Dollars in thousands)


                                                                                          June 30,            December 31,
                                                                                            2005                 2004
<S>                                                                                     <C>                   <C>
                          Assets:
Current Assets:
   Cash.........................................................................         $   1,187             $   1,794
   Restricted cash and cash equivalents.........................................            33,544                32,622
   Accounts receivable, (net of allowances of $298).............................            27,139                21,831
   Prepaid expenses and other assets............................................               270                 2,266
   Inventory....................................................................             5,402                 5,357
   Amounts due from related parties.............................................             6,954                 6,787
                                                                                            ------                ------
                                       Total current assets                                 74,496                70,657


   Restricted cash and investments..............................................            15,507                15,250
   Property, plant and equipment, (net of accumulated depreciation
      of $370,455 and $357,806, respectively)...................................           362,851               371,223
   Power purchase contract, (net of accumulated amortization
      of $31,724 and $29,217, respectively).....................................            34,801                37,308
   Deferred financing costs, (net of accumulated amortization
      of $7,786 and $7,392, respectively).......................................             3,544                 3,938
                                                                                           -------               -------

                                       Total assets                                      $ 491,199             $ 498,376
                                                                                           =======               =======


                            Liabilities and Partners' Capital:

Current Liabilities:
   Accounts payable and accrued liabilities.....................................         $   6,390             $   8,684
    Amounts due to related parties..............................................             1,443                 1,865
   Current portion of project loans.............................................            36,602                35,480
                                                                                            ------                ------
                                       Total current liabilities                            44,435                46,029


   Other liabilities............................................................            18,141                17,746
   Deferred revenue.............................................................             1,012                    --
   Amounts due to related parties...............................................            26,685                26,449
   Project loans................................................................           171,483               186,797
                                                                                           -------               -------
                                       Total liabilities                                   261,756               277,021


Partners' capital...............................................................           229,443               221,355
                                                                                           -------               -------


                                       Total liabilities & partners' capital             $ 491,199             $ 498,376
                                                                                           =======               =======





                See accompanying notes to the unaudited consolidated and combined financial statements.

                                                         36
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                        COSO PARTNERSHIPS
                                               UNAUDITED CONSOLIDATED AND COMBINED
                                                    STATEMENTS OF OPERATIONS
                                                     (Dollars in thousands)


                                                               Three-Months       Three-Months       Six-Months       Six-Months
                                                                   Ended              Ended            Ended            Ended
                                                                  June 30,           June 30,         June 30,         June 30,
                                                                    2005               2004             2005             2004
<S>                                                            <C>                <C>              <C>               <C>
Revenue:
   Energy revenues......................................        $   25,985         $   26,535        $   53,400       $   54,685
   Capacity revenues....................................            10,521             10,525            14,234           14,241
                                                                    ------             ------            ------           ------
          Total revenue.................................            36,506             37,060            67,634           68,926

Operating expenses:
   Plant operating expenses.............................             9,380             10,032            17,010           18,943
   Royalty expense......................................             4,677              5,449             8,283            9,286
   Depreciation and amortization........................             7,808              7,764            15,575           15,531
                                                                    ------             ------            ------           ------
          Total operating expenses......................            21,865             23,245            40,868           43,760

          Operating income .............................            14,641             13,815            26,766           25,166

Other (income)/expenses:
   Interest and other income............................              (916)              (406)           (1,447)            (872)
   Interest expense.....................................             4,963              5,686             9,936           11,362
   Noncash interest expense.............................               197                197               394              394
                                                                     -----              -----             -----           ------
          Total other expenses..........................             4,244              5,477             8,883           10,884
                                                                     -----              -----             -----           ------

          Net income....................................        $   10,397         $    8,338        $   17,883       $   14,282
                                                                    ======              =====            ======           ======





                    See accompanying notes to the unaudited consolidated and combined financial statements.

                                                           37
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                COSO PARTNERSHIPS
                  UNAUDITED CONSOLIDATED COMBINED AND CONDENSED
                            STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)


                                                                      Six-Months            Six-Months
                                                                        Ended                 Ended
                                                                       June 30,              June 30,
                                                                         2005                  2004
<S>                                                                  <C>                    <C>


    Net cash provided by (used in) operating activities......         $  29,256              $  26,184
    Net cash provided by (used in) investing activities......            (5,819)                (4,874)
    Net cash provided by (used in) financing activities......           (24,044)               (21,634)
                                                                         ------                 ------

    Net change in cash.......................................         $    (607)             $    (324)
                                                                         ======                 ======

    Supplemental cash flow disclosure:
             Cash paid for interest..........................         $  10,058              $  11,476
                                                                         ======                 ======





    See accompanying notes to the unaudited consolidated, combined and condensed financial statements.

                                                  38
</TABLE>
<PAGE>
                                COSO PARTNERSHIPS
                             NOTES TO THE UNAUDITED
                            CONSOLIDATED AND COMBINED
                              FINANCIAL STATEMENTS
                             (Dollars in thousands)

(1)      Basis of Presentation

The accompanying  unaudited  consolidated and combined financial statements were
derived from the stand alone  unaudited  financial  statements of Caithness Coso
Funding Corp., Coso Finance Partners and Subsidiary,  Coso Energy Developers and
Coso Power Developers and Subsidiary ("the Coso Partnerships"). All intercompany
accounts and transactions were eliminated.  This financial  information has been
provided to  facilitate  a more  comprehensive  understanding  of the  financial
position,  operating results and cash flows of the Coso Partnerships as a whole.
The unaudited  consolidated and combined financial  statements should be read in
conjunction with each individual Partnership's unaudited financial statements.

The preparation of unaudited financial  statements in accordance with accounting
principles  generally accepted in the United States of America requires the Coso
Partnerships to make certain estimates and assumptions for the reporting periods
covered by the financial statements.  These estimates and assumptions affect the
reported  amounts of  assets,  liabilities,  revenues  and  expenses  during the
reporting  period.  Actual  results  could  differ  from  these  estimates.  The
financial information herein presented reflects all adjustments, consisting only
of normal  recurring  adjustments,  which are,  in the  opinion  of  management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily  indicative of results to be
expected for the full year. The Coso Partnerships  have experienced  significant
quarterly   fluctuations  in  operating   results  and  it  expects  that  these
fluctuations in energy revenues, expenses and net income will continue.

The data for the  consolidated  and combined balance sheets presented herein for
June 30, 2005 and December  31, 2004 were  derived  from the Coso  Partnership's
financial  statements  for the  interim  period and  fiscal  year then ended and
includes the effect of consolidating  New CLPSI Company,  LLC ("CLPSI") and Coso
Transmission  Line  Partners  ("CTLP") as a result of the  adoption of Financial
Accounting Standards Board (FASB) Interpretation No. 46 (revised December 2003),
(FIN 46R)  Consolidation of Variable  Interest  Entities,  an  interpretation of
Accounting  Research  Bulletin  No. 51,  but does not  include  all  disclosures
required by  accounting  principles  generally  accepted in the United States of
America.

(2)      Accounts Receivable and Revenue Recognition

Accounts receivable primarily consist of receivables from Edison for electricity
delivered  and sold under a power  purchase  contract.  Operating  revenues  are
recognized  as income  during the period in which  electricity  is  delivered to
Edison.

(3)      Reclassifications

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

(4)      Asset Retirement Obligations

In June 2001, FASB issued Statement of Financial Accounting Standards (SFAS) No.
143,  Accounting for Asset  Retirement  Obligations.  This  Statement  addresses
financial   accounting  and  reporting  for  obligations   associated  with  the
retirement of tangible  long-lived  assets and the associated  asset  retirement
costs and amends SFAS No. 19, Financial  Accounting and Reporting by Oil and Gas
Producing  Companies.  The Statement requires that the fair value of a liability
for an asset  retirement  obligation  be recognized in the period in which it is
incurred  if a  reasonable  estimate  of a fair value can be made,  and that the
associated  asset retirement costs be capitalized as part of the carrying amount
of the long-lived  asset. The Statement is effective for consolidated  financial
statements  issued for fiscal years beginning after June 15, 2002. On January 1,

                                       39

2003, the Coso  Partnerships  adopted SFAS No. 143 and estimated the restoration
costs the Coso Partnerships  expect to incur when the land lease expires.  Under
the land lease,  the Coso  Partnerships  are  required  to remove all  property,
plant,  and equipment to restore the land to its original  state. As of June 30,
2005 and  December 31,  2004,  the  accumulated  liability  associated  with the
restoration  costs were $3,158 and  $3,008,  respectively,  and are  included in
other liabilities.

(5)      Commitments and Contingencies

The Coso  Partnerships  are required to obtain a "Financial  Guarantee  Bond for
Closure Costs" (Water Bonds),  which would be used in the event of noncompliance
of the  remediation  obligation  for waste  discharge.  As of June 30,  2005 and
December  31,  2004,  the fair value of the Water  Bonds that are  reported as a
noncurrent restricted investments are $433.

Settlement   Agreement  between  Edison  and  the  California  Public  Utilities
Commission

On September 23, 2002,  the United States Court of Appeals for the Ninth Circuit
(Ninth Circuit) issued an opinion and order on appeal from the district  court's
stipulated  judgment which affirmed the stipulated judgment in part and referred
questions  based on California  state law to the California  Supreme Court.  The
Ninth Circuit stated that if the settlement  agreement violated California state
law, then the appeals court would be required to void the  stipulated  judgment.
The California Supreme Court accepted the Ninth Circuit's request to address the
issues  referred to in the  September 23, 2002 ruling.  On August 21, 2003,  the
California Supreme Court found that state laws were not violated as of result of
the  settlement  agreements.  On December  19,  2003,  the Ninth  Circuit  fully
affirmed the district  court's  stipulated  judgment based on the reply from the
California Supreme Court.

Court of Appeals Decision on Line Loss Factor

Edison filed a petition  for a writ of review of a January  2001 CPUC  decision,
claiming  that the  "floor"  line loss factor of 0.95 for  renewable  generators
violated the Public Utility Regulator  Policies Act of 1978.  Subsequently,  the
California  Court of Appeals issued a decision on August 20, 2002 in response to
the writ affirming the January 2001 CPUC decision,  except for the 0.95 "floor,"
which it rejected as an abuse of discretion  by the CPUC.  While this matter was
appealed to the California  Supreme  Court,  the petition for review was denied.
The Coso Partnerships are currently evaluating potential actions to redress this
issue. The Coso  Partnerships'  Agreements set the loss factor at 1.0 for energy
sold between May 2002 through May 2007. After April 2007, the Coso  Partnerships
will have a line loss factor of less than 1.0,  effectively  decreasing revenues
if Edison's  challenge to the CPUC ruling stands.  The Coso Partnerships  cannot
predict whether any subsequent action regarding this matter will be successful.

(6)      Subsequent Events

On August 5, 2005, Funding Corp. issued $375 million of senior secured bonds due
June 15, 2019 and $90 million of  subordinated  secured  notes due June 15, 2014
(collectively,  the "Securities").  The proceeds of the Securities were put into
an  escrow  account  for  the  benefit  of  the  holders  of the  Notes,  and on
approximately  September  6, 2005,  the  proceeds of the escrow  account will be
released  to the  holders  of the Notes to repay  the  Notes in full.  Effective
August  5,  2005,  under the terms of the  Indenture  under  which the Notes are
outstanding,  the covenants of Funding Corp. and the Coso  Partnerships  will be
defeased,  and the related security  agreements and pledge agreements of Funding
Corp.  and the Coso  Partnerships  pertaining  to the Notes will be deemed to be
satisfied in full and will no longer be enforceable against Funding Corp. or the
Coso Partnerships.

                                       40
<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.

                                      CAITHNESS COSO FUNDING CORP.,
                                      a Delaware corporation

Date:  August 12, 2005                 By:  /S/ CHRISTOPHER T. MCCALLION
                                            ----------------------------
                                                Christopher T. McCallion
                                                Executive Vice President &
                                                Chief Financial Officer
                                                (Principal Financial and
                                                Accounting Officer)


                                      COSO FINANCE PARTNERS AND SUBSIDIARY
                                      a California general partnership

                                       By: New CLOC Company, LLC,
                                            its Managing General Partner

Date:  August 12, 2005                 By: /S/ CHRISTOPHER T. MCCALLION
                                           ----------------------------
                                               Christopher T. McCallion
                                               Executive Vice President &
                                               Chief Financial Officer
                                               (Principal Financial and
                                               Accounting Officer)


                                      COSO ENERGY DEVELOPERS
                                      a California general partnership

                                       By: New CHIP Company, LLC,
                                            its Managing General Partner

Date:  August 12, 2005                 By: /S/ CHRISTOPHER T. MCCALLION
                                           ----------------------------
                                               Christopher T. McCallion
                                               Executive Vice President &
                                               Chief Financial Officer
                                               (Principal Financial and
                                               Accounting Officer)


                                      COSO POWER DEVELOPERS AND SUBSIDIARY
                                      a California general partnership

                                      By: New CTC Company, LLC,
                                           its Managing General Partner

Date:  August 12, 2005                By: /S/ CHRISTOPHER T. MCCALLION
                                          ----------------------------
                                              Christopher T. McCallion
                                              Executive Vice President &
                                              Chief Financial Officer
                                              (Principal Financial and
                                              Accounting Officer)