SALTON SEA FUNDING CORP
10-K, 2000-03-29
STEAM & AIR-CONDITIONING SUPPLY
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                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                   For the fiscal year ended December 31, 1999
                          Commission File No. 33-95538

                         SALTON SEA FUNDING CORPORATION
             (Exact name of registrant as specified in its charter)

                               DELAWARE 47-0790493

       (State of                                               (IRS Employer
     Incorporation)                                         Identification No.)

    Salton Sea Brine Processing L.P.    California             33-0601721
    Salton Sea Power Generation L.P.    California             33-0567411
    Fish Lake Power LLC                 Delaware               33-0453364
    Vulcan Power Company                Nevada                 95-3992087
    CalEnergy Operating Corporation     Delaware               33-0268085
    Salton Sea Royalty LLC              Delaware               47-0790492
    VPC Geothermal LLC                  Delaware               91-1244270
    San Felipe Energy Company           California             33-0315787
    Conejo Energy Company               California             33-0268500
    Niguel Energy Company               California             33-0268502
    Vulcan/BN Geothermal Power Company  Nevada                 33-3992087
    Leathers, L.P.                      California             33-0305342
    Del Ranch, L.P.                     California             33-0278290
    Elmore, L.P.                        California             33-0278294
    Salton Sea Power L.L.C.             Delaware               47-0810713
    CalEnergy Minerals LLC              Delaware               47-0810718
    CE Turbo LLC                        Delaware               47-0812159
    CE Salton Sea Inc.                  Delaware               47-0810711
    Salton Sea Minerals Corp.           Delaware               47-0811261

              302 S. 36TH  STREET,  SUITE 400-A,  OMAHA,  NE      68131
         (Address of principal executive offices and Zip Code of Salton

                            Sea Funding Corporation)
               SALTON SEA FUNDING CORPORATION'S TELEPHONE NUMBER,

                      INCLUDING AREA CODE: (402) 341-4500

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

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

                           YES    X                  NO

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  Registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ X ]

         All common  stock of Salton Sea  Funding  Corporation  is held by Magma
         Power Company. 100 shares of Common Stock were outstanding on March 29,
         2000.

         Documents incorporated by reference:     N/A

<PAGE>

                                TABLE OF CONTENTS

PART I.........................................................................1

ITEM 1. BUSINESS...............................................................1
THE PROJECTS...................................................................2

SALTON SEA PROJECTS............................................................3
PARTNERSHIP PROJECTS...........................................................4
ZINC RECOVERYPROJECT...........................................................4
ROYALTIES AND ROYALTY PROJECTS.................................................5

TERMS OF THE SECURITIES........................................................5
SECURITIES.....................................................................5
STRUCTURE OF AND COLLATERAL FOR THE SECURITIES.................................6

PAYMENT OF INTEREST AND PRINCIPAL..............................................8
PRIORITY OF PAYMENTS..........................................................11
DEBT SERVICE RESERVE FUND.....................................................11
OPTIONAL REDEMPTION...........................................................12
MANDATORY REDEMPTION..........................................................12
DISTRIBUTIONS.................................................................12
INCURRENCE OF ADDITIONAL DEBT.................................................12
PRINCIPAL COVENANTS...........................................................13
EQUITY COMMITMENT.............................................................13
THE PROJECT NOTES.............................................................14
PRINCIPAL CREDIT AGREEMENT COVENANTS..........................................14
CONSIDERATIONS REGARDING LIMITATION ON REMEDIES...............................14
RELIANCE ON SINGLE UTILITY CUSTOMER...........................................14
POWER PRICE AND SALES UNCERTAINTY.............................................14
ZINC PRICE AND SALES UNCERTAINTY..............................................15
CONSTRUCTION UNCERTAINTY......................................................15
UNCERTAINTIES RELATING TO EXPLORATION AND DEVELOPMENT OF GEOTHERMAL
     ENERGY RESOURCES.........................................................16

INSURANCE.....................................................................16
REGULATORY AND ENVIRONMENTAL MATTERS..........................................16
EMPLOYEES.....................................................................17
ITEM 2. PROPERTIES............................................................17
ITEM 3. LEGAL PROCEEDINGS.....................................................17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................17

PART II ......................................................................18
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER'S
     MATTERS..................................................................18
ITEM 6. SELECTED FINANCIAL DATA...............................................18

SALTON SEA FUNDING CORPORATION................................................18
SALTONSEAGUARANTORS...........................................................19
PARTNERSHIP GUARANTORS........................................................20
ROYALTY GUARANTOR.............................................................21

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS....................................................22

FACTORS AFFECTING RESULTS OF OPERATIONS.......................................22
POWER PURCHASE AGREEMENTS.....................................................22
CAPACITY UTILIZATIONS.........................................................23
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997....24

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK...........27
INTEREST RATE RISK............................................................27

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...........................29
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
     FINANCIAL DISCLOSURE.....................................................74

PART III .....................................................................75

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...................75
ITEM 11. EXECUTIVE COMPENSATION...............................................75
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......75
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................75

PART IV.......................................................................79

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULE AND REPORTS ON FORM 8-K......79

SIGNATURES....................................................................80

<PAGE>

PART I

ITEM 1.  BUSINESS

     Salton Sea Funding Corporation ("Funding Corporation") is a special purpose
Delaware corporation,  an indirect wholly-owned subsidiary of CE Generation, LLC
("CE  Generation") and formed for the sole purpose of issuing  securities in its
individual capacity as principal and as agent acting on behalf of the Guarantors
(as defined below). The principal executive office of the Funding Corporation is
located at 302 South 36th Street,  Suite 400-A,  Omaha,  Nebraska  68131 and its
telephone number is (402) 341-4500.

     CE  Generation  owns  all of the  capital  stock  of  Magma  Power  Company
("Magma")  which in turn owns all of the  outstanding  capital  stock of Funding
Corporation. Through its subsidiaries, CE Generation is primarily engaged in the
development,  ownership and operation of environmentally responsible independent
power  production  facilities  in the United  States  utilizing  geothermal  and
natural gas resources.  CE Generation has an aggregate net ownership interest of
756 MW of electrical  generating  capacity in power plants in operation or under
construction  in the United States,  which have an aggregate net capacity of 816
MW  (including  its  interests in the Salton Sea  Projects  and the  Partnership
Projects as defined below).

     All of the outstanding stock of Magma was contributed by MidAmerican Energy
Holdings Company, the successor of CalEnergy Company, Inc.  ("MidAmerican"),  to
CE Generation in February 1999. In March 1999,  MidAmerican  sold a 50% interest
in CE  Generation  to El Paso  Holding  Company,  an affiliate of El Paso Energy
Corporation ("El Paso").

     Magma  directly  or  indirectly  owns  all  of  the  capital  stock  of  or
partnership interests in the Funding Corporation and the Guarantors,  except for
CalEnergy  Minerals  LLC  ("Minerals  LLC") and Salton Sea  Minerals  Corp.  The
Guarantors  are  comprised  of  the  Salton  Sea  Guarantors,   the  Partnership
Guarantors and the Royalty Guarantor.

<PAGE>

     The  Salton  Sea  Guarantors  include  Salton  Sea  Brine  Processing  L.P.
("SSBP"),  Salton Sea Power  Generation  L.P.  ("SSPG")  and Fish Lake Power LLC
("Fish Lake")  (collectively,  the "Initial Salton Sea  Guarantors"),  which own
four operating  geothermal power plants located in Imperial  Valley,  California
known as Salton  Sea I,  Salton  Sea II,  Salton  Sea III and Salton Sea IV, and
Salton Sea Power  L.L.C.  ("Power  LLC"  together  with the  Initial  Salton Sea
Guarantors,  the "Salton Sea  Guarantors"),  which is  constructing a geothermal
power plant in Imperial  Valley,  California known as Salton Sea V (such project
together with Salton Sea I, II, III and IV, the "Salton Sea Projects").

     The Partnership  Guarantors include the Vulcan/BN  Geothermal Power Company
("Vulcan"), Elmore, L.P. ("Elmore"),  Leathers, L.P. ("Leathers") and Del Ranch,
L.P.  ("Del  Ranch"),  each of which owns an  operating  geothermal  power plant
located in Imperial Valley,  California known as the Vulcan Project,  the Elmore
Project, the Leathers Project and the Del Ranch Project,  respectively (together
with the CE  Turbo  Project  and the Zinc  Recovery  Project,  the  "Partnership
Projects").  The Partnership Guarantors also include CE Turbo LLC ("Turbo LLC"),
which  is  constructing  a  geothermal  power  plant  in  the  Imperial  Valley,
California and CalEnergy  Minerals LLC ("Minerals LLC"), which is constructing a
zinc  recovery  project  in  the  Imperial  Valley,  California.   Finally,  the
Partnership Guarantors include CalEnergy Operating Corporation ("CEOC"),  Vulcan
Power Company ("VPC"),  San Felipe Energy Company ("San Felipe"),  Conejo Energy
Company  ("Conejo"),  Niguel  Energy  Company  ("Niguel"),  VPC  Geothermal  LLC
(formerly, BN Geothermal Inc.) ("VPCG"), Salton Sea Minerals Corp. and CE Salton
Sea Inc.  Vulcan Power Company  ("VPC") and VPCG,  collectively  own 100% of the
partnership  interests  in Vulcan.  CEOC and  Niguel,  San  Felipe  and  Conejo,
collectively own 90% partnership  interests in each of Elmore,  Leathers and Del
Ranch, respectively.

     Magma owns all of the remaining  10% interests in each of Elmore,  Leathers
and Del Ranch.  CEOC is entitled to receive  from Magma,  as payment for certain
data and services provided by CEOC, all of the partnership  distributions  Magma
receives  with  respect to its 10%  ownership  interests  in each of the Elmore,
Leathers and Del Ranch Projects and Magma's special  distributions equal to 4.5%
of total energy revenues from the Leathers Project.

     Salton Sea Royalty LLC, ("SSRC" or the "Royalty  Guarantor") is the Royalty
Guarantor.   SSRC   received  an   assignment  of  certain  fees  and  royalties
("Royalties")  paid by three  Partnership  Projects,  Elmore,  Leathers  and Del
Ranch.

     CEOC currently operates each of the Salton Sea Projects and the Partnership
Projects.  Affiliates of Magma control, through a variety of fee, leasehold, and
royalty  interests,  rights to geothermal  resources for power production in the
Salton Sea Known Geothermal  Resource Area ("SSKGRA").  The Funding  Corporation
believes  that such  resources  will be  sufficient  to  operate  the Salton Sea
Projects  and  the  Partnership   Projects  at  contract  capacity  under  their
respective  power  purchase  agreements  through the final  maturity date of the
Securities.

     The principal executive offices of the Salton Sea Guarantors are located at
302 South 36th Street,  Suites  400-B,  400-D,  400-E,  400-K and 400-N,  Omaha,
Nebraska 68131. The principal executive offices of the Partnership Guarantors is
302 South 36th Street,  Suite 400-F,  400-G,  400-I, 400-J, 400-L, 400-M, 400-N,
400-O, 400-P, 400-Q, 400-R, 400-S, 400-T, and 400-U, Omaha,  Nebraska 68131. The
principal  executive  office of the Royalty  Guarantor is 302 South 36th Street,
Suite 400-H,  Omaha,  Nebraska  68131.  The Salton Sea  Guarantors,  Partnership
Guarantors  and the Royalty  Guarantor  are sometimes  referred to  collectively
herein as the "Guarantors".

THE PROJECTS

     Set forth below is a table describing certain characteristics of the Salton
Sea  Projects  and the  Partnership  Projects,  and the  Guarantors'  collective
interests  therein.  All  the  projects  are  located  in the  Imperial  Valley,
California. The Salton Sea I-IV, Elmore, Leathers, Del Ranch and Vulcan projects
(the "Existing  Projects") each sell power to Southern California Edison Company
("Edison").

<PAGE>

                            DATE OF

PROJECT          FACILITY  COMMERICAL   CONTRACT     CONTRACT        POWER
              CAPACITY(1)(2)OPERATION  EXPIRATION      TYPE       PURCHASERS (3)

SALTON SEA PROJECTS

Salton Sea I       10.0     7/1987       6/2017      Negotiated      Edison
Salton Sea II      20.0     4/1990       4/2020         SO4          Edison
Salton Sea III     49.8     2/1989       2/29/19        SO4          Edison
Salton Sea IV      39.6     6/1996       5/2026      Negotiated      Edison
SALTON SEA V       49.0    Mid-2000        N/A          N/A     PX/Zinc Recovery
                  ------                                             Project
SUBTOTAL          168.4

PARTNERSHIP PROJECTS

Vulcan             34.0     2/1986      2/2016          SO4          Edison
Elmore             38.0     1/1989      12/2018         SO4          Edison
Leathers           38.0     1/1990      12/2019         SO4          Edison
Del Ranch          38.0     1/1989      12/2018         SO4          Edison
CE TURBO           10.0    Mid-2000       N/A          N/A     PX/Zinc Recovery
                  -----                                             Project
SUBTOTAL          158.0

TOTAL POWER
PROJECTS          326.4

ZINC RECOVERY

PROJECT           30,000    Mid-2000      N/A           N/A            N/A
                  ======

(1) Power capacity varies with operating and reservoir conditions.

(2) Facility  capacities are measured in MW; zinc recovery  project  capacity is
measured  in  estimated  tons  per  year  production.  (3)  Edison  is  Southern
California Edison Company and PX is the California Power Exchange.

SALTON SEA PROJECTS

    The Salton Sea Guarantors  collectively  own the four  operating  Salton Sea
Projects and the Salton Sea V project under  construction  with an aggregate net
generating capacity of approximately 168.4 MW. Each of the four operating Salton
Sea Projects has an executed long term power purchase  agreement,  providing for
the sale of capacity and energy to Edison.

    The Salton Sea II and Salton Sea III power contracts provide for fixed price
capacity payments for the life of the contract,  and fixed price energy payments
for the first 10 years.  Thereafter,  the energy payments paid by Edison will be
based on Edison's then-current,  published short-run avoided cost of energy. The
fixed price  energy  period  expired on February 13, 1999 for Salton Sea III and
expires on April 4, 2000 for Salton Sea II.

    Salton Sea I and Salton Sea IV have  negotiated  contracts with Edison.  The
Salton Sea I contract provides for a capacity payment and energy payment for the
life of the  contract.  Both  payments  are based upon an initial  value that is
subject to  quarterly  adjustment  by  reference  to  various  inflation-related
indices.  The Salton Sea IV contract  also  provides  for fixed  price  capacity
payments for the life of the  contract.  Approximately  56% of the kWhs are sold
under  the  Salton  Sea IV PPA at a fixed  energy  price,  which is  subject  to
quarterly adjustment by reference to various inflation-related  indices, through
June 20, 2017 (and at Edison's  avoided  cost of energy  thereafter),  while the
remaining  44% of the Salton Sea IV kWhs are sold  according to a 10-year  fixed
price schedule  followed by payments based on a modified  avoided cost of energy
for the succeeding 5 years and at Edison's avoided cost of energy thereafter.

<PAGE>

    Salton Sea V is being  constructed  as a 49 MW geothermal  power plant which
will  extract  unutilized  geothermal  energy  from  geothermal  brine  that has
previously  passed  through the other  Salton Sea  Projects.  Salton Sea V has a
negotiated  power  sale  contract  to sell a portion  of its  output to the Zinc
Recovery  Project and will sell the remainder into the California Power Exchange
("PX") or such other markets as may develop.  Salton Sea V is being  constructed
pursuant to a date certain,  fixed price, turn key engineering,  procurement and
construction  contract  (the  "Salton  Sea V EPC  Contract")  by Stone & Webster
Engineering Corporation ("SWEC").  SWEC's obligations under the Salton Sea V EPC
Contract,  including  provisions  for  liquidated  damages  of up to  20% of the
contract  price for certain delays or failures to meet  performance  guarantees,
are guaranteed by SWEC's parent, Stone & Webster, Incorporated.  Salton Sea V is
scheduled to commence Commercial Operation in mid-2000.

     Salton Sea I through IV Projects  operated at a combined  facility capacity
factor of 95.6% in 1997, 94.2% in 1998 and 91.9% in 1999.

PARTNERSHIP PROJECTS

    All of the  Partnership  Projects  except the CE Turbo  Project and the Zinc
Recovery Project have executed Standard Agreements (called "SO4 Agreements") for
the sale of  capacity  and energy to Edison  which  contracts  provide for fixed
price  capacity  payments  for the life of the  contract  and fixed price energy
payments for the first 10 years. Thereafter,  the energy payments paid by Edison
will be based on Edison's avoided cost of energy.  The fixed price energy period
for the  Vulcan  Project,  the Del Ranch  Project,  the Elmore  Project  and the
Leather  Project  expired on February 9, 1996,  December 31, 1998,  December 31,
1998 and December 31, 1999, respectively.

    Turbo LLC, one of the Partnership  Guarantors,  is constructing the CE Turbo
Project (the "CE Turbo  Project"),  which will have a capacity of 10 net MW. The
net output of the CE Turbo Project will be sold to the Zinc Recovery Project (if
Salton Sea V is not  delivering  power) or sold through the PX or in open market
transactions.

    The  Partnership  Guarantors are upgrading the geothermal  brine  processing
facilities at the Vulcan and Del Ranch Projects (the "Region 2 Brine  Facilities
Construction").  In addition to incorporating the pH modification process, which
has reduced operating costs at the Salton Sea Projects,  the new facilities will
achieve  economies of scale through  improved brine  processing  systems and the
utilization of more modern equipment.

    The CE Turbo  Project  and the Region 2 Brine  Facilities  Construction  are
being  constructed  by SWEC  pursuant to a date  certain,  fixed-price,  turnkey
engineering,  procurement and  construction  contract (the "Region 2 Upgrade EPC
Contract").  The  obligations  of  SWEC  are  guaranteed  by  Stone  &  Webster,
Incorporated.   The  CE  Turbo  Project  and  the  Region  2  Brine   Facilities
Construction are scheduled to be completed in mid-2000.

     The existing  Partnership Projects operated at a combined facility capacity
factor of 102.2% in 1997, 101.3% in 1998, and 103.4% in 1999.

ZINC RECOVERY PROJECT

     CalEnergy Minerals LLC ("Minerals LLC"), one of the Partnership Guarantors,
is  constructing  the Zinc  Recovery  Project  which will  recover zinc from the
geothermal  brine (the "Zinc Recovery  Project").  Facilities  will be installed
near the Existing  Project  sites to extract a zinc  chloride  solution from the
geothermal  brine  through  an ion  exchange  process.  This  solution  will  be
transported  to a central  processing  plant  where zinc ingots will be produced
through  solvent  extraction,  electrowinning  and casting  processes.  The Zinc
Recovery Project is designed to have a capacity of approximately 30,000 tons per
year and is scheduled to commence commercial operation in mid-2000. In September
1999,  Minerals LLC entered into a sales agreement  whereby all zinc produced by
the Zinc Recovery Project will be sold to Cominco,  Ltd. The initial term of the
agreement expires in December 2005.

<PAGE>
    The Zinc  Recovery  Project  is being  constructed  by  Kvaerner  U.S.  Inc.
("Kvaerner")  pursuant  to a date  certain,  fixed-price,  turnkey  engineering,
procurement  and   construction   contract  (the  "Zinc  Recovery   Project  EPC
Contract").  Kvaerner is a wholly-owned  indirect subsidiary of Kvaerner ASA, an
internationally  recognized engineering and construction firm experienced in the
metals, mining and processing  industries.  The payment obligations of Kvaerner,
including  payment of liquidated  damages of up to 20% of the contract price for
certain  delays or failures  to meet  performance  guarantees,  are secured by a
letter  of  credit  issued  by Union  Europeenne  de CIC (or  another  financial
institution  rated  "A" or  better  by S&P or  "A2" or  better  by  Moody's  and
otherwise  acceptable to Minerals LLC) in an initial  aggregate  amount equal to
$29.6  million.

ROYALTY PROJECTS

    The  Royalty  Guarantor  has  received an  assignment  from Magma of certain
payments ("Royalties") received from the Leathers, Del Ranch and Elmore Projects
in exchange  for the  provision  to those  projects of the rights to use certain
geothermal resources. Substantially all of the assigned Royalties are based on a
percentage of energy and capacity revenues of the respective projects.  Pursuant
to the  assignment,  the Royalty  Guarantor is entitled to receive the aggregate
percentages of such project's energy and capacity revenues as illustrated in the
chart below. The Partnership  Guarantors are also entitled to receive  Royalties
from the Partnership  Projects as illustrated in the chart below.  Royalties are
subject to netting and reduction from time to time to reflect various  operating
costs,  as reflected in the  financial  statements  herein.  All such  Royalties
(other  than  the  various  operating  costs,  as  reflected  in  the  financial
statements)  are  payable  from  revenues  which  will  constitute   Partnership
Guarantors collateral.

                       ROYALTIES TO BE PAID TO         ROYALTIES TO BE PAID TO
                          ROYALTY GUARANTOR             PARTNERSHIP GUARANTORS

PROJECT           FACILITY    % ENERGY   % CAPACITY     % ENERGY    % CAPACITY
                  CAPACITY    REVENUES     REVENUES     REVENUES     REVENUES

                    (MW)

Del Ranch          38          23.33         1.00       5.67           3.00
Elmore             38          23.33         1.00       5.67           3.00
Leathers           38          21.50         0.00       7.50           3.00
VULCAN             34           0.00         0.00       4.17           0.00
                 ----

    TOTAL         148

                             TERMS OF THE SECURITIES

THE SECURITIES

     The Funding  Corporation is a special purpose Delaware  corporation  formed
for the sole  purpose  of  issuing  securities  in our  individual  capacity  as
principal and as agent acting on behalf of our  affiliates  which  guarantee the
Securities.

     The Funding Corporation has completed the following issuances and exchanges
of securities (together, the "Securities"):

     * On July 21, 1995,  the Funding  Corporation  issued (1)  $232,750,000  of
6.69% Senior  Secured Series A Notes due 2000 (the "Series A  Securities"),  (2)
$133,000,000  of 7.37%  Senior  Secured  Series B Bonds Due 2005 (the  "Series B
Securities")  and (3)  $109,250,000  of 7.84% Senior  Secured Series C Bonds Due
2010 (the "Series C Securities");

<PAGE>

     * On February 13, 1996,  the Funding  Corporation  consummated  an exchange
offer where the Funding Corporation issued  substantially  identical  securities
which  had  been  registered  under  the  Securities  Act in  exchange  for  the
unregistered Series A through C Securities;

     * On June 20, 1996, the Funding  Corporation  issued (1) $70,000,000 of our
7.02% Senior Secured Series D Bonds Due 2000 (the "Series D Securities") and (2)
$65,000,000  of our 8.30% Senior  Secured Series E Bonds Due 2011 (the "Series E
Securities");

     * On July 29, 1996, the Funding  Corporation  consummated an exchange offer
where  the  Funding  Corporation  issued  substantially  identical  Supplemental
Securities  which had been  registered  under the Securities Act in exchange for
the unregistered Series D and E Securities; and

     * On October 13, 1998, the Funding  Corporation issued  $285,000,000 of our
7.475% Senior Secured Series F Bonds Due 2018 (the "Series F Securities").

     * On August 3, 1999, the Funding Corporation  consummated an exchange offer
where the Funding Corporation issued substantially identical Series F Securities
which  have  been  registered  under  the  Securities  Act in  exchange  for the
unregistered Series F Securities.

     The  Securities  have  received  ratings  of  "Baa2" by  Moody's  Investors
Serivce,  Inc. ("Moody's") and "BBB" by Standard & Poor's Ratings Group ("S&P").
The Securities  will be equivalent in right of payment and in the right to share
in the collateral.  On December 31, 1999, the aggregate  principal amount of all
Securities outstanding was $569 million.

     The Funding Corporation  received no proceeds from the exchange pursuant to
the exchange offers.  The net proceeds received by the Funding  Corporation from
the issuance of the  Securities to the Initial  Purchasers in the three separate
offerings (after deduction of certain transaction costs) were approximately $884
million and were loaned to the  Guarantors in return for the issuance of certain
notes (the  "Project  Notes"),  and were used for the  following  purposes:  (a)
approximately  $253  million  to  repay  certain  non-recourse  indebtedness  of
MidAmerican incurred in connection with the Magma Acquisition; (b) approximately
$102 million to refinance existing indebtedness of the Salton Sea Projects;  (c)
approximately  $115  million  to  finance  the  Salton  Sea  IV  Expansion,  (d)
approximately  $96  million  to  refinance  all  of the  existing  project-level
indebtedness under credit agreements of the Partnership  Project Companies;  (e)
approximately  $15 million to fund the Capital  Expenditure  Fund to be used for
certain  capital  improvements  to the  Partnership  Projects and the Salton Sea
Projects,  (f) approximately $23 million to fund a portion of the purchase price
payable by the  Initial  Partnership  Guarantors  for the  Acquired  Partnership
Companies,  and (g)  approximately  $280 million to fund in part construction of
the Zinc Recovery Project, CE Turbo Project and Salton Sea V Project, as well as
associated capital improvements and finance costs .

     There is no existing trading market for the New Securities and there can be
no  assurance  regarding  the  future  development  of such a market for the New
Securities  or the  ability  of  holders  of the New  Securities  to sell  their
Securities  or the price at which  such  holders  may be able to sell  their New
Securities.  If such a market were to develop, future trading prices will depend
on many factors,  including,  among other things, prevailing interest rates, the
operating results of the Funding Corporation and the Guarantors,  and the market
for similar  securities.  The Funding  Corporation  does not intend to apply for
listing or  quotation  of the  Securities  on any  securities  exchange or stock
market.

STRUCTURE OF AND COLLATERAL FOR THE SECURITIES

     The  Funding  Corporation  will make  payments on the  Securities  with the
principal of and interest paid on promissory  notes issued by the  Guarantors to
the Funding  Corporation (the "Project Notes").  The Securities are secured by a
pledge  of our  capital  stock  and  are  guaranteed  by the  Guarantors.  These
guarantees are secured by:

     * in the case of the guarantee  issued by the Salton Sea  Guarantors,  by a
lien on  substantially  all of the  assets of the Salton  Sea  Guarantors  and a
pledge of the equity interests in the Salton Sea Guarantors;

<PAGE>

     * in the case of the guarantee issued by the Partnership  Guarantors,  by a
lien on substantially all of the assets of the Partnership Project Companies,  a
lien  on  the  equity  cash  flows  and  royalties  of the  Initial  Partnership
Guarantors  and a pledge  of the  stock of and  other  equity  interests  in the
Partnership Guarantors; and

     * in the case of the guarantee issued by the Royalty  Guarantor,  by a lien
on all royalties paid to the Royalty Guarantor and a pledge of the capital stock
of the Royalty Guarantor.

     The guarantees issued by the Salton Sea Guarantors are unlimited.  However,
the guarantees  issued by the Partnership  Guarantors and the Royalty  Guarantor
are limited to the following amounts:

     * for any Initial Partnership Guarantor or the Royalty Guarantor, the total
equity  cash flows and  royalties  received  by the  Guarantor,  minus,  without
duplication,  (1) any royalties paid, (2) all operating and  maintenance  costs,
(3) all capital expenditures and (4) debt service;

     * for any Additional Partnership Guarantor,  the total revenues received by
the  Guarantor,  minus,  without  duplication  (1) any royalties  paid,  (2) all
operating  and  maintenance  costs,  (3) all capital  expenditures  and (4) debt
service.

     The structure has been designed to cross-collateralize cash flows from each
Guarantor  without   cross-collateralizing   all  of  the  Guarantors'   assets.
Therefore,  if a Guarantor  defaults under its guarantee or its promissory  note
issued to the  Funding  Corporation,  without  causing a payment  default on the
Securities,  then the  trustee  may  direct  the  collateral  agent to  exercise
remedies  only  with  respect  to  the  collateral   securing  that  Guarantor's
obligations.   If,  however,  the  default  causes  a  payment  default  on  the
Securities,  then the  trustee  may  accelerate  the  Securities  and direct the
collateral  agent to exercise  remedies  against all of the  collateral  and, if
different, the collateral pledged by the Salton Sea Guarantors.

     The Funding  Corporation is a special purpose finance  subsidiary of Magma.
Its ability to make payments on the Securities will be entirely dependent on the
Guarantors'  performance  of their  obligations  under the Project Notes and the
Guarantees. As is common in non-recourse, project finance structures, the assets
and cash flows of the Guarantors are the sole source of repayment of the Project
Notes and the  Guarantees.  The Salton Sea Guarantors  conduct no other business
and own no other  significant  assets  except those  related to the ownership or
operation of the Salton Sea  Projects.  The  Partnership  Guarantors  conduct no
business  other  than  owning  their  respective   ownership  interests  in  the
Partnership  Projects and providing operation,  maintenance,  administrative and
technical  services  for  Magma,  the Salton Sea  Projects  and the  Partnership
Projects.  The Royalty  Guarantor has been organized  solely to receive  royalty
payments  owed by the  Partnership  Projects and conducts no other  business and
owns no other assets. In the event of a default by any Guarantor under a Project
Note, Credit Agreement or Guarantee,  there is no assurance that the exercise of
remedies  under such Project  Note,  Credit  Agreement or  Guarantee,  including
foreclosure on the assets of such Guarantor,  would provide  sufficient funds to
pay such  Guarantor's  obligation  under the Project  Notes and the  Guarantees.
Moreover,  unless such default causes a payment  default under the Indenture (in
which case remedies may be exercised against the defaulting  Guarantor's and the
Salton Sea  Guarantors'  assets),  remedies  may be  exercised  only against the
assets of the defaulting Guarantors. No shareholders,  partners or affiliates of
the Funding  Corporation (other than the Guarantors) and no directors,  officers
or employees of the Funding  Corporation or the Guarantors  will guarantee or be
in any way liable for the payment of the  Securities,  the Project  Notes or the
Guarantees  except the  guarantee  by  MidAmerican  for the direct and  indirect
owners of the Zinc Recovery Project of a specified portion of the scheduled debt
service on the Series F Securities  including  the current  principal  amount of
$140.52  million and associated  interest.  In addition,  the obligations of the
Partnership  Guarantors  and the  Royalty  Guarantor  under the  Guarantees  are
limited to the available cash flows of such Guarantors.  As a result, payment of
amounts owed pursuant to the Project Notes, the Guarantees and the Securities is
dependent upon the availability of sufficient revenues and royalty payments from
the Guarantors' businesses or holdings,  after the payment of operating expenses
and the satisfaction of certain other obligations.

<PAGE>

PAYMENT OF INTEREST AND PRINCIPAL

    The interest payment dates for the Securities are May 30 and November 30.

    The $232,750,000  initial  principal amount of the 6.69% Series A Securities
due May 30, 2000 is payable in semiannual installments, which commenced November
30, 1995, as follows:

    PAYMENT DATE                                        PERCENTAGE OF
                                                       PRINCIPAL AMOUNT

                                                            PAYABLE

    November 30, 1995                                   9.8440386681%
    May 30, 1996                                       10.3342642320%
    November 30, 1996                                  10.3342642320%
    May 30, 1997                                       13.8298603652%
    November 30, 1997                                  13.8298603652%
    May 30, 1998                                       10.5087003222%
    November 30, 1998                                  10.5087003222%
    May 30, 1999                                        6.4240601504%
    November 30, 1999                                   6.4240601504%
    May 30, 2000                                        7.9621911923%

     The $133,000,000  initial principal amount of the 7.37% Series B Securities
due May 30, 2005 is payable in semiannual installments, commencing May 30, 1998,
as follows:

    PAYMENT DATE                                        PERCENTAGE OF
                                                       PRINCIPAL AMOUNT

                                                         PAYABLE

    May 30, 1998                                        9.7819548872%
    November 30, 1998                                   9.7819548872%
    May 30, 1999                                        1.9563909774%
    November 30, 1999                                   1.9563909774%
    May 30, 2000                                        0.3909774436%
    November 30, 2000                                   0.3909774436%
    May 30, 2001                                        8.0360902256%
    November 30, 2001                                   8.0360902256%
    May 30, 2002                                        8.5330827068%
    November 30, 2002                                   8.5330827068%
    May 30, 2003                                        5.6390977444%
    November 30, 2003                                   5.6390977444%
    May 30, 2004                                        7.5781954887%
    November 30, 2004                                   7.5781954887%
    May 30, 2005                                       16.1684210526%



<PAGE>

     The $109,250,000  initial principal amount of the 7.84% Series C Securities
due May 30, 2010 is payable in semiannual installments, commencing May 30, 2003,
as follows:

    PAYMENT DATE                                        PERCENTAGE OF
                                                       PRINCIPAL AMOUNT

                                                         PAYABLE

    May 30, 2003                                        3.3116704805%
    November 30, 2003                                   3.3116704805%
    May 30, 2004                                        1.6558352403%
    November 30, 2004                                   1.6558352403%
    May 30, 2005                                        0.8283752860%
    November 30, 2005                                   0.8283752860%
    May 30, 2006                                        9.8572082380%
    November 30, 2006                                   9.8572082380%
    May 30, 2007                                        9.8425629291%
    November 30, 2007                                   9.8425629291%
    May 30, 2008                                       10.0851258581%
    November 30, 2008                                  10.0851258581%
    May 30, 2009                                       10.0118993135%
    November 30, 2009                                  10.0118993135%
    May 30, 2010                                        8.8146453090%

     The $70,000,000  initial  principal amount of the 7.02% Series D Securities
due May 30, 2000 is payable in semiannual installments, commencing May 30, 1997,
as follows:

    PAYMENT DATE                                        PERCENTAGE OF
                                                       PRINCIPAL AMOUNT

                                                         PAYABLE

    May 30, 1997                                       18.4642857143%
    November 30, 1997                                  18.4642857143%
    May 30, 1998                                       22.8571428571%
    November 30, 1998                                  22.8571428571%
    May 30, 1999                                        7.6071428571%
    November 30, 1999                                   7.6071428571%
    May 30, 2000                                        2.1428571430%



<PAGE>

     The $65,000,000  initial  principal amount of the 8.30% Series E Securities
due May 30, 2011 is payable in semiannual installments, commencing May 30, 1999,
as follows:

    PAYMENT DATE                                        PERCENTAGE OF
                                                       PRINCIPAL AMOUNT

                                                         PAYABLE

    May 30, 1999                                        9.2907692308%
    November 30, 1999                                   9.2907692308%
    May 30, 2000                                        3.0769230769%
    November 30, 2000                                   3.0769230769%
    May 30, 2001                                        0.7692307692%
    November 30, 2001                                   0.7692307692%
    May 30, 2002                                        1.2307692308%
    November 30, 2002                                   1.2307692308%
    May 30, 2003                                        2.3076923077%
    November 30, 2003                                   2.3076923077%
    May 30, 2004                                        2.5000000000%
    November 30, 2004                                   2.5000000000%
    May 30, 2005                                        2.6923076923%
    November 30, 2005                                   2.6923076923%
    May 30, 2006                                        1.9230769231%
    November 30, 2006                                   1.9230769231%
    May 30, 2007                                        1.9230769231%
    November 30, 2007                                   1.9230769231%
    May 30, 2008                                        2.6923076923%
    November 30, 2008                                   2.6923076923%
    May 30, 2009                                        2.5000000000%
    November 30, 2009                                   2.5000000000%
    May 30, 2010                                       10.3846153846%
    November 30, 2010                                  10.3846153846%
    May 30, 2011                                       17.4184615384%

     The $285,000,000 initial principal amount of the 7.475% Series F Securities
due November 30, 2018 is payable in semiannual installments,  commencing May 30,
2001 as follows:

    PAYMENT DATE                                        PERCENTAGE OF
                                                       PRINCIPAL AMOUNT

                                                         PAYABLE

May 30, 2001                                                   0.225%
November 30, 2001                                              0.225%
May 30, 2002                                                   0.750%
November 30, 2002                                              0.750%
May 30, 2003                                                   0.500%
November 30, 2003                                              0.500%
May 30, 2004                                                   0.625%
November 30, 2004                                              0.625%
May 30, 2005                                                   0.625%
November 30, 2005                                              0.625%
May 30, 2006                                                   0.650%
November 30, 2006                                              0.650%
May 30, 2007                                                   0.375%
<PAGE>

November 30, 2007                                              0.375%
May 30, 2008                                                   0.875%
November 30, 2008                                              0.875%
May 30, 2009                                                   0.375%
November 30, 2009                                              0.375%
May 30, 2010                                                   1.250%
November 30, 2010                                              1.250%
May 30, 2011                                                   3.000%
November 30, 2011                                              3.000%
May 30, 2012                                                   5.750%
November 30, 2012                                              5.750%
May 30, 2013                                                   5.075%
November 30, 2013                                              5.075%
May 30, 2014                                                   6.000%
November 30, 2014                                              6.000%
May 30, 2015                                                   6.550%
November 30, 2015                                              6.550%
May 30, 2016                                                   7.050%
November 30, 2016                                              7.050%
May 30, 2017                                                   6.875%
November 30, 2017                                              6.875%
May 30, 2018                                                   3.450%
November 30, 2018                                              3.450%

PRIORITY OF PAYMENTS

    All  revenues  received  by the  Salton Sea  Guarantors  from the Salton Sea
Projects,  all revenues received by the Partnership Guarantors and all Royalties
received by the Royalty  Guarantor  shall be paid into a Revenue Fund maintained
by the depository agent. Amounts paid into the Revenue Fund shall be distributed
in the following order of priority:  (a) to pay operating and maintenance  costs
of the Guarantors; (b) to pay certain administrative costs of the agents for the
secured parties under the Financing Documents;  (c) to pay principal of, premium
(if any) and interest on the Securities and the debt service  reserve bonds,  if
any, and interest and certain fees payable to the debt service reserve letter of
credit  provider;  (d) to pay principal of debt service reserve letter of credit
loans and certain  related fees and charges;  (e) to replenish  any shortfall in
the Debt Service  Reserve Fund; (f) to pay certain  breakage costs in respect of
debt service  reserve  letter of credit  loans,  and  indemnification  and other
expenses  to  the  secured  parties,   and  (g)  to  the  Distribution  Fund  or
Distribution Suspense Fund, as applicable.

DEBT SERVICE RESERVE FUND

    The Funding Corporation is obligated at all times to maintain a Debt Service
Reserve Fund and/or an  acceptable  letter of credit,  the Debt Service  Reserve
Fund is funded from available  funds in accordance with the priority of payments
until the aggregate amount of the fund and letter of credit are equal to:

    * through December 31, 1999, the maximum  semiannual  principal and interest
payments on the Securities for the remaining term of the Securities;

    * after December 31, 1999 through payment in full of the Initial  Securities
and the  Supplemental  Securities,  the maximum  annual  principal  and interest
payments on the Securities for the remaining term of the Securities; and

    * after  payment  in full of the  Initial  Securities  and the  Supplemental
Securities, (a) the maximum annual principal and interest payments on the Series
F Securities for the remaining  term or (b) if we obtain a  confirmation  of the
current ratings of the Securities, the maximum semiannual principal and interest
payments on the Series F Securities.

    The Debt Service Reserve Letter of Credit, which is being provided by Credit
Suisse First Boston,  must be issued by a financial  institution  rated at least
"A" by S&P and "A2" by Moody's.  Drawings on the Debt Service  Reserve Letter of
Credit will be available to pay principal of and interest on the  Securities and
interest on loans resulting from drawings on such Debt Service Reserve Letter of
Credit.

<PAGE>

OPTIONAL REDEMPTION

    The Series B Securities, Series C Securities, Series E Securities and Series
F Securities are subject to optional  redemption,  in whole or in part, pro rata
at par plus accrued interest to the redemption date plus a premium calculated to
"make whole" to comparable U.S.  Treasury  securities plus 50 basis points.  The
Series A  Securities  and  Series  D  Securities  are not  subject  to  optional
redemption.

MANDATORY REDEMPTION

    The  Securities  are subject to mandatory  redemption,  pro rata within each
maturity,  at par  plus  accrued  interest  to  the  redemption  date,  (a) if a
permitted power contract  buy-out occurs unless the rating agencies  confirm the
then current rating of the  Securities;  (b) upon the  acceleration of a Project
Note in an amount  equal to the  principal  amount  of such  note  plus  accrued
interest; (c) upon the occurrence of certain events of loss, condemnation, title
defects or similar events related to the Salton Sea Projects or the  Partnership
Projects;  or (d) in certain  circumstances  if any New Project fails to achieve
substantial  completion by the applicable guaranteed substantial completion date
or receives  certain net performance  liquidated  damages under the construction
contract for such Project or (e) upon the foreclosure by the Collateral Agent of
collateral securing the Guarantor's  obligations under the Salton Sea Guarantee,
the Partnership Guarantee or Royalty Guarantee.

DISTRIBUTIONS

    Distributions  may be made only from and to the  extent of monies on deposit
in  the  Distribution   Fund.  Such  distributions  are  subject  to  the  prior
satisfaction of the following conditions:

(a)      the amounts contained in the Principal Fund and the Interest Fund shall
         be equal to or  greater  than the  aggregate  scheduled  principal  and
         interest payments next due on the Securities;

(b)      no default or event of default under the Indenture  shall have occurred
         and be continuing;

(c)      the debt service coverage ratio for the preceding four fiscal quarters,
         measured as one annual period, is equal to or greater than 1.4 to 1, if
         such  distribution  date occurs  prior to the year 2000,  and, if in or
         subsequent  to the year 2000,  is equal to or greater than 1.5 to 1, as
         certified by an officer of the Funding Corporation;

(d)      the projected  debt service  coverage  ratio of the  Securities for the
         succeeding four fiscal quarters  measured as one annual period is equal
         to or greater than 1.4 to 1, if such  distribution date occurs prior to
         the year 2000, and, if such  distribution  date occurs in or subsequent
         to the year 2000, is equal to or greater than 1.5 to 1, as certified by
         an officer of the Funding Corporation;

(e)      the debt service  reserve fund shall have a balance equal to or greater
         than the debt service reserve fund required balance or one or more Debt
         Service  Reserve  Letter  (or  Letters)  of  Credit  at least  equal to
         (collectively  with the balance,  if any, in the Debt  Service  Reserve
         Fund) the debt service reserve fund required balance;

(f)      an officer of the Funding Corporation  provides a certificate (based on
         customary  assumptions) that there are sufficient  geothermal resources
         to operate  the Salton Sea  Projects  and the  Partnership  Projects at
         contract  capacity  through the final maturity date of the  Securities;
         and

(g)      substantial  completion  of each New Project  shall have occurred on or
         prior to such New  Project's  guaranteed  substantial  completion  date
         unless the required  amount of  Securities  shall have been redeemed as
         described  above  under  "Mandatory  Redemption"  or  (ii)  the  rating
         agencies  shall have confirmed  that no rating  downgrade  would result
         from such  delay;  provided  that such  condition  will  apply to a New
         Project  only (x)  after  such  New  Project's  guaranteed  substantial
         completion date or (y) if such New Project has been abandoned.

INCURRENCE OF ADDITIONAL DEBT

     The  Funding  Corporation  shall not incur any debt other  than  "Permitted
Debt". "Permitted Debt" means:

(a)      The Securities;

<PAGE>

(b)      Debt  incurred  to acquire  the East Mesa  Project in whole or in part;
         provided  that no such Debt may be incurred  unless at the time of such
         incurrence  (i) no  default  or event of default  has  occurred  and is
         continuing and (ii) the rating agencies  confirm that the incurrence of
         such debt will not result in a rating downgrade;
(c)      Debt incurred to develop, construct, own, operate or acquire additional
         permitted  facilities in the Imperial Valley  ("Additional  Projects");
         provided  that no such debt may be incurred  unless at the time of such
         incurrence  (i) no  default  or event of default  has  occurred  and is
         continuing  and (ii) the rating  agencies  confirm that the  Securities
         will  maintain an  investment  grade rating after giving effect to such
         debt;
(d)      Debt  incurred  to finance the making of capital  improvements  to the
         Salton Sea Projects,  the Partnership  Projects or Additional Projects
         required to maintain  compliance  with  applicable  law or anticipated
         changes therein;  provided that no such debt may be incurred unless at
         the time of such  incurrence  the  independent  engineer  confirms  as
         reasonable (i) a certification by the Funding Corporation  (containing
         customary  qualifications)  that the proposed capital improvements are
         reasonably  expected to enable such Project to comply with  applicable
         or anticipated  legal  requirements  and (ii) the  calculations of the
         Funding  Corporation  that  demonstrate,  after  giving  effect to the
         incurrence of such debt, the minimum  projected debt service  coverage
         ratio (x) for the next four consecutive  fiscal  quarters,  commencing
         with the quarter in which such debt is  incurred,  taken as one annual
         period,  and (y) for each  subsequent  fiscal  year  through the final
         maturity  date,  will not be less than 1.2 to 1;
(e)      Debt  incurred  to finance the making of capital  improvements  to the
         Salton Sea Projects,  the Partnership  Projects or Additional Projects
         not required by  applicable  law so long as after giving effect to the
         incurrence  of such  debt  (i) no  default  or event  of  default  has
         occurred  and is  continuing,  and (ii) (A) the  independent  engineer
         confirms as reasonable (x) the calculations of the Funding Corporation
         that  demonstrate  that the minimum  projected  debt service  coverage
         ratio  for the next four  consecutive  quarters,  taken as one  annual
         period,  and each subsequent fiscal year, will not be less than 1.4 to
         1,  and  (y)  the   calculations  of  the  Funding   Corporation  that
         demonstrate the average  projected debt service coverage ratio for all
         succeeding fiscal years until the final maturity date will not be less
         than 1.7 to 1 or (B) the Rating  Agencies  confirm that the incurrence
         of such  debt  will not  result  in a rating  downgrade;
(f)      Working capital debt in an aggregate amount not to exceed $15,000,000;
(g)      Debt incurred under the Debt Service Reserve LOC Reimbursement
         Agreement;
(h)      Debt incurred in connection with certain permitted  interest rate swap
         arrangements;
(i)      Debt incurred by the Funding  Corporation in an aggregate amount not to
         exceed $30,000,000,  in connection with the development,  construction,
         ownership,   operation,   maintenance   or   acquisition  of  Permitted
         Facilities; and
(j)      Subordinated  debt from affiliates in an aggregate amount not to exceed
         $200,000,000 which shall be used to finance capital, operating or other
         costs with respect to the Projects or Additional Projects.

      All Permitted Debt incurred by the Funding  Corporation shall be loaned to
the Guarantors and guaranteed by the Guarantors.

PRINCIPAL INDENTURE COVENANTS

    Principal  covenants under the Indenture require the Funding  Corporation to
agree, except as permitted under the Indenture, (a) not to exercise any remedies
or waive any defaults under the Credit Agreements and the Project Notes,  except
as otherwise permitted under the Indenture; (b) not to incur (i) any Debt except
Permitted  Debt or (ii) any Lien  upon any of its  properties  except  Permitted
Liens and (c) not to enter into any  transaction of merger or  consolidation  or
change its form of organization or its business.

EQUITY COMMITMENT

    Pursuant to the Equity Commitment Agreement executed by MidAmerican in favor
of the  Guarantors and the Collateral  Agent,  MidAmerican  agreed to contribute
cash  equity to the  Guarantors  in an amount  of up to  $122,513,000  to fund a
portion  of the  budgeted  costs  for  construction  of  the  New  Projects  and
Additional Capital Improvements.
<PAGE>

THE PROJECT NOTES

    The Salton Sea Guarantors  jointly and severally issued a Project Note in an
initial  principal amount of $325,000,000 and an additional  Project Note in the
amount of $83,272,000; the Partnership Guarantors jointly and severally issued a
Project  Note in an initial  principal  amount of  $75,000,000,  and  additional
Project Notes in amounts of $135,000,000 and $201,728,000, respectively, and the
Royalty  Guarantor  issued a  Project  Note in an  initial  principal  amount of
$75,000,000.

PRINCIPAL CREDIT AGREEMENT COVENANTS

    Principal  covenants under the Credit  Agreements  require each Guarantor to
agree,  subject to certain exceptions and qualifications,  (a) not to enter into
any  transaction of merger or  consolidation,  change its form of  organization,
liquidate,  wind-up or dissolve  itself;  (b) not to enter into non-arm's length
transactions or agreements with Affiliates; (c) not to incur (i) any debt except
Permitted  Guarantor Debt and (ii) any liens except for permitted liens; (d) not
to engage in any business other than as  contemplated  by the respective  Credit
Agreement;  and (e) not to amend,  terminate  or  otherwise  modify the  Project
Documents  to which they are a party except as  permitted  under the  respective
Credit Agreements.  In addition to these principal covenants,  in the Salton Sea
Credit Agreement and the Partnership Credit Agreement, the Salton Sea Guarantors
and the Partnership  Guarantors  have agreed (a) not to sell,  lease or transfer
any property or assets  material to the Salton Sea  Projects or the  Partnership
Projects, as applicable,  except in the ordinary course of business;  and (b) to
maintain  insurance  as is  generally  carried by  companies  engaged in similar
businesses and owning similar properties.

CONSIDERATIONS REGARDING LIMITATION ON REMEDIES

    A  significant  portion  of  the  proceeds  of  the  Initial  Offering  were
distributed to MidAmerican to repay certain non-recourse  indebtedness  incurred
by  MidAmerican  in connection  with the  acquisition  of Magma  (including  the
Guarantors).  The Royalty Guarantor has purchased an assignment of the royalties
from Magma pursuant to the Magma Assignment Agreement.  Magma has also agreed to
make certain  payments to CEOC pursuant to the Magma  Services  Agreement and to
secure such  payment  obligation  with a collateral  assignment  of certain cash
flows. The Guarantors have executed Guarantees with respect to the entire amount
of Securities.  Under certain circumstances  (including a proceeding under Title
11 of the United States Code or any similar  proceeding),  it is possible that a
creditor of a  Guarantor  or Magma  could make a claim,  under  federal or state
fraudulent  conveyance  laws,  that the Funding  Corporation's  claims under the
Credit  Agreements,  the  Security  Holders'  claims under the  Guarantees,  the
Royalty  Guarantor's  interest  pursuant to the Magma  Assignment  Agreement  or
CEOC's rights under the Magma Services  Agreement  should be subordinated or not
enforced in accordance with such instruments' terms or that payments  thereunder
(including  payments to the Holders of the Securities)  should be recovered.  In
order to prevail on such a claim, a claimant would have to demonstrate  that the
obligations  incurred under any Guarantor's Credit Agreement or Guarantee or the
transfers  made  under  the Magma  Assignment  Agreement  or the Magma  Services
Agreement were not incurred in good faith or that any Guarantor or Magma did not
receive fair  consideration  in connection with such  obligations and transfers,
and that any  Guarantor  or Magma is and was  insolvent  at the time of entering
into the Credit Agreement,  Guarantee, the Magma Assignment Agreement and/or the
Magma  Services  Agreement or that it did not have and will not have  sufficient
capital for  carrying on its business or was not and will not be able to pay its
debts as they mature.

RELIANCE ON SINGLE UTILITY CUSTOMER

    Each of the Existing Projects relies on an agreement with Edison to generate
100% of its  operating  revenues.  The  payments  under  these  agreements  have
constituted  100% of the operating  revenues of each Existing  Project since its
inception, and may do so for the life of the Securities. Any material failure of
Edison  to  fulfill  its  contractual   obligations  under  the  Power  Purchase
Agreements  could have a material  adverse  effect on the ability of the Funding
Corporation to pay principal of and interest on the Securities.
<PAGE>

POWER PRICE AND SALES UNCERTAINTY

    The Power Purchase Agreements pursuant to which all of the Existing Projects
(other  than  Salton Sea I and Salton  Sea IV) sell  electricity  to SCE are SO4
Agreements.  These  agreements  provide for both  capacity  payments  and energy
payments  for a term of 30 years.  While the basis for the  capacity  payment is
fixed for the entire  30-year term,  the price of energy  payments is fixed only
for the first ten years of the term.  Thereafter,  the required  energy  payment
converts to Edison's  avoided cost of energy,  as  determined  by a  methodology
approved by, and subject to change by, the California Public Utility Commission.
The fixed price period expired in February 1996 for Vulcan, in December 1998 for
Del Ranch and Elmore;  in February  1999 for Salton Sea III and in December 1999
for Leathers and will expire in April 2000 for Salton Sea II.

    For the year ended December 1999 and 1998,  Edison's average avoided cost of
energy was 3.1 cents and 3.0 cents per kWh, respectively, which is substantially
below the contract  energy prices  earned for the year ended  December 31, 1999.
Estimates of Edison's future avoided cost of energy vary substantially from year
to year. The Funding  Corporation  and the Guarantors  cannot predict the likely
level of avoided cost of energy prices under these  agreements at the expiration
of the fixed price periods. The revenues generated by each of these Projects has
or will likely decline  significantly after the expiration of the relevant fixed
price periods.

    Although approximately  one-third of the net electrical output of Salton Sea
V is expected to be sold for use by the Zinc Recovery  Project,  neither  Salton
Sea V nor the CE Turbo Project  currently has any power sales agreements for any
significant  portion of the capacity of such  Projects.  The strategy for Salton
Sea V and the CE Turbo Project is to sell output not needed by the Zinc Recovery
Project in short term transactions  through the PX or in such other transactions
from time to time as may be found to be more  advantageous  than those conducted
through the PX. The PX was recently created to establish markets for the sale of
power on a daily and an hourly  basis.  Thus, PX prices are expected to have the
characteristics  of short term spot prices and to fluctuate from time to time in
a manner that cannot be predicted with accuracy and is not within the control of
the Funding Corporation, the Guarantors or any other person.

ZINC PRICE AND SALES UNCERTAINTY

     In September 1999,  Minerals LLC entered into a sales agreement whereby all
zinc  produced by the Zinc  Recovery  Project will be sold to Cominco,  Ltd. The

initial term of the agreement expires in December 2005.

    Because most of the Zinc  Recovery  Project's  revenues will be derived from
the sale of zinc,  earnings will be directly related to the price of zinc in the
domestic and world markets.  However,  zinc prices fluctuate and are affected by
numerous factors,  including expectations of inflation,  speculative activities,
currency  exchange  rates,  interest  rates,  global  and  regional  demand  and
production,  political and economic conditions,  discovery of new deposits,  and
production  costs in major  producing  regions.  The  aggregate  effect of these
factors,  all of which are beyond the control of the Funding  Corporation or the
Guarantors, is impossible for the Funding Corporation to predict.

CONSTRUCTION UNCERTAINTY

    Although the eight  Existing  Projects  have been  operating for a number of
years,  the three New Projects  have  commenced  construction  pursuant to fixed
price, date certain turnkey engineering,  procurement and construction contracts
and are subject to customary risks associated with the construction of power and
metals processing plants including risks of delays in completion,  cost overruns
and failures to perform in accordance with contract  terms.  In addition,  while
each of the individual process steps to be utilized in the Zinc Recovery Project
(including  ion exchange,  solvent  extraction and  electrowinning)  has been in
operation for more than twenty years and the  demonstration  plant at the SSKGRA
has successfully  recovered zinc through this integrated process, the integrated
process for the production of zinc from geothermal  brine has not been attempted
in a large  scale  commercial  facility.  Any  material  unremedied  delay in or
unsatisfactory  completion of the New Projects  could have an adverse  effect on
the applicable Guarantors' results of operations.
<PAGE>

UNCERTAINTIES RELATING TO EXPLORATION AND DEVELOPMENT OF GEOTHERMAL ENERGY
RESOURCES

    Geothermal   exploration,   development   and   operations  are  subject  to
uncertainties which vary among different  geothermal  reservoirs and are similar
to those typically  associated  with oil and gas  exploration  and  development,
including  dry  holes  and  uncontrolled  releases.  Because  of the  geological
complexities  of geothermal  reservoirs,  the  geographic  area and  sustainable
output of geothermal reservoirs can only be estimated and cannot be definitively
established.  There is,  accordingly,  a risk of an  unexpected  decline  in the
capacity  of  geothermal  wells and a risk of  geothermal  reservoirs  not being
sufficient for sustained generation of the electrical power capacity desired.

    In addition,  both the cost of operations  and the operating  performance of
geothermal  power  plants may be  adversely  affected by a variety of  operating
factors.  Production  and injection  wells can require  frequent  maintenance or
replacement.  Corrosion caused by high-temperature and high-salinity  geothermal
fluids may require the  replacement or repair of certain  equipment,  vessels or
pipelines.   New  production  and  injection  wells  may  be  required  for  the
maintenance of current operating levels,  thereby requiring  substantial capital
expenditures.

INSURANCE

    The Salton Sea  Projects  and the  Partnership  Projects  currently  possess
property,  business interruption,  catastrophic and general liability insurance.
Proceeds of insurance  received in connection  with the Salton Sea Projects will
be payable to the  Depositary  for the account of the Salton Sea  Guarantors and
will be applied  as  required  under the  financing  documents.  There can be no
assurance that such  comprehensive  insurance  coverage will be available in the
future at commercially  reasonable  costs or terms or that the amounts for which
the Salton Sea Guarantors and the Partnership  Guarantors are or will be insured
will cover all potential losses.

    Because geothermally active areas such as the area in which the Projects are
located are  subject to frequent  low-level  seismic  disturbances,  and serious
seismic  disturbances  are  possible,  the  power  generating  plants  and other
facilities  at the  Projects  are  designed  and built to  withstand  relatively
significant levels of seismic disturbance.  However,  there is no assurance that
seismic disturbances of a nature and magnitude so as to cause material damage to
the  Projects  or  gathering  systems or a material  change in the nature of the
geothermal  resource  will not occur,  that  insurance  with  respect to seismic
disturbances  will be maintained  by or on behalf of all of the  Projects,  that
insurance proceeds will be adequate to cover all potential losses sustained,  or
that insurance  will continue to be available in the future in amounts  adequate
to insure against such seismic disturbances.

REGULATORY AND ENVIRONMENTAL MATTERS

    The Guarantors are subject to a number of environmental laws and regulations
affecting  many aspects of their  present and future  operations,  including the
disposal of various  forms of  materials  resulting  from  geothermal  reservoir
production  and  the  drilling  and  operation  of  new  wells.  Such  laws  and
regulations  generally  require the  Guarantors to obtain and comply with a wide
variety of  licenses,  permits  and other  approvals.  In  addition,  regulatory
compliance for the construction of new facilities is a costly and time-consuming
process,  and  intricate  and rapidly  changing  environmental  regulations  may
require  major  expenditures  for  permitting  and create the risk of  expensive
delays or material  impairment of project value if projects  cannot  function as
planned  due to  changing  regulatory  requirements  or  local  opposition.  The
Guarantors  and the Projects also remain subject to a varied and complex body of
environmental  and energy  regulations  that both public  officials  and private
individuals  may  seek to  enforce.  There  can be no  assurance  that  existing
regulations  will not be revised or that new regulations  will not be adopted or
become applicable to the Guarantors and the Projects which could have an adverse
impact on their operations.  In particular,  the independent power market in the
United  States  is  dependent  on  the  existing  energy  regulatory  structure,
including the Public Utility  Regulatory  Policies Act and its implementation by
utility  commissions  in the various  states.  The structure of such federal and
state energy  regulations has in the past, and may in the future, be the subject
of  various  challenges  and  restructuring  proposals  by  utilities  and other
industry  participants.  The implementation of regulatory changes in response to
such  challenges  or  restructuring   proposals,   or  otherwise  imposing  more
comprehensive  or stringent  requirements on the Guarantors and Projects,  which
would result in increased  compliance costs could have a material adverse effect
on the Guarantors' and the Projects' results of operations.
<PAGE>

EMPLOYEES

    Employees  necessary  for the  operation  of the Salton Sea Projects and the
Partnership  Projects are provided by CEOC,  under the operation and maintenance
agreements described below. As of December 31, 1999, CEOC employed 197 people at
the  Salton  Sea  Projects  and the  Partnership  Projects,  collectively.  CEOC
employees are not covered by any collective  bargaining  agreement.  The Funding
Corporation believes that CEOC's employee relations are good.

    CEOC  maintains  a  qualified  technical  staff  covering  a broad  range of
disciplines including geology, geophysics, geochemistry, hydrology, volcanology,
drilling  technology,  reservoir  engineering,  plant engineering,  construction
management,  maintenance  services,  production  management  and electric  power
operation.

    Administrative  services for the  Guarantors  are  provided  pursuant to the
administrative  services  agreements  described  below.   MidAmerican  employees
provide corporate level managerial,  financial,  accounting, technical and other
administrative   services  and  CEOC  employees   provide  certain   accounting,
purchasing and payroll services.

ITEM 2.  PROPERTIES

    The Funding  Corporation  does not  separately own or lease office space but
has arranged for a separate suite at MidAmerican's  offices in Omaha,  Nebraska.
(See page 4 for a schedule of the Guarantors facilities.)

ITEM 3.  LEGAL PROCEEDINGS

    The Funding Corporation is not a party to any material legal proceedings.

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

    Not applicable.

<PAGE>

                                     PART II

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER'S MATTERS

    Not applicable.

ITEM 6.  SELECTED FINANCIAL DATA (Dollars in thousands)

SALTON SEA FUNDING CORPORATION

    The following tables set forth selected  historical  financial and operating
data of the Funding Corporation. The data should be read in conjunction with the
financial statements and related notes and other financial information appearing
elsewhere in this Form 10-K.
<TABLE>
<CAPTION>
                                  Year Ended    Year Ended    Year Ended    Year Ended   From June 20, 1995
                                 December 31,  December 31,  December 31,   December 31,  (Inception Date)
                                     1999         1998(1)        1997         1996 (2)         through
                                                                                          December 31, 1995 (3)
<S>                                 <C>           <C>           <C>           <C>            <C>
Total revenues                      $ 48,538      $ 39,329      $ 40,674      $ 40,567       $ 17,577
Net income                             1,123         1,783         1,461         1,821          1,507
</TABLE>
<TABLE>
<CAPTION>
                                 December 31,  December 31,  December 31,   December 31,  December 31,
                                    1999          1998(1)        1997         1996 (2)       1995(3)
<S>                             <C>           <C>           <C>           <C>            <C>

Total assets                      $585,648      $659,337      $474,289      $575,989       $522,521
Senior secured notes and bonds     568,980       626,816       448,754       538,982        452,088
Total liabilities                  572,587       647,399       464,134       567,295        515,571
Total stockholder's equity          13,061        11,938        10,155         8,694          6,950
</TABLE>

(1)       On October 13, 1998 Funding  Corporation issued additional  securities
          of $285,000 of Salton Sea Notes and Bonds Series F.

(2)       On June 20, 1996 Funding  Corporation issued additional  securities of
          $135,000 of Salton Sea Notes and Bonds Series D and E.

(3)       Funding  Corporation  was formed on June 20, 1995 for the sole purpose
          of acting as issuer of senior notes and bonds and issued
          $475,000 of senior secured notes and bonds.


<PAGE>

SALTON SEA GUARANTORS

     The following tables set forth selected  historical  combined financial and
operating  data  of the  Salton  Sea  Guarantors.  The  data  should  be read in
conjunction with the financial  statements and related notes and other financial
information appearing elsewhere in this Form 10-K.
<TABLE>
<CAPTION>

                                                               YEAR ENDED DECEMBER 31,
                                          1999(1)       1998          1997          1996(2)      1995(3)
<S>                                   <C>           <C>            <C>               <C>         <C>

Sales of electricity                  $  81,850     $  106,274     $  106,252        $ 90,982    $  71,605
Total revenues                           83,718        107,091        106,425          91,123       71,605
Net income                               23,045         45,939         42,816          35,031       17,955

Total assets                            633,014        628,515        556,353         565,934      500,400
Senior secured project note             293,954        310,030        266,208         299,840      321,500
Total liabilities                       329,842        348,388        322,165         374,562      330,801
</TABLE>

(1)  The  decrease is due to Salton Sea III  reaching the end of its fixed price
     period in February 1999.

(2)  In June 1996, Salton Sea IV commenced operations.

(3)  Information  as of December  31, 1995 and for the year then ended  reflects
     adjustments  which  have been  made to the net  assets  of the  Salton  Sea
     Guarantors to reflect the effect of the  acquisition of Magma accounted for
     as  a  purchase  business   combination  pushed  down  to  the  Salton  Sea
     Guarantors.

<PAGE>

PARTNERSHIP GUARANTORS

     The following tables set forth selected  historical  combined financial and
operating  data  of the  Partnership  Guarantors.  The  data  should  be read in
conjunction with the financial statements and related notes, and other financial
information appearing elsewhere in this Form 10-K.
<TABLE>
<CAPTION>

                                                  Year Ended December 31,
                                         1999(1)       1998        1997        1996(2)      1995(3)
<S>                                    <C>          <C>          <C>          <C>           <C>
Sales of electricity                   $105,921     $165,779     $158,125     $132,212      $76,909
Total revenues                          114,988      172,565      162,315      140,226       87,483
Net income                               25,481       37,134       33,637       25,759       14,637

Total assets                            901,892      907,819      736,783      742,183      602,172
Loans payable                               ---          ---          ---          ---       43,766
Senior secured project note             261,212      293,576      143,610      182,204       62,706
Total liabilities                       377,578      408,986      275,084      314,121      228,440
</TABLE>
(1)       The decrease is due to the end of the fixed price period at Del Ranch
          and Elmore.

(2)       On April  17,  1996 the  remaining  50%  interest  of the  Partnership
          Projects was acquired from Edison Mission Energy.

(3)       Information  as of  December  31,  1995  and for the year  then  ended
          reflects  adjustments  which  have been made to the net  assets of the
          Partnership  Guarantors  to reflect the effect of the  acquisition  of
          Magma accounted for as a purchase business  combination pushed down to
          the Partnership Guarantors.

<PAGE>

ROYALTY GUARANTOR

     The following tables set forth selected historical  financial and operating
data of the Royalty  Guarantor.  The data should be read in conjunction with the
financial statements and related notes and other financial information appearing
elsewhere in this Form 10-K.
<TABLE>
<CAPTION>

                                                         Year Ended December 31,
                                          1999       1998 (1)       1997        1996       1995 (2)
<S>                                     <C>          <C>           <C>         <C>          <C>
Total revenues                          $26,274      $51,703       $32,231     $30,143      $28,383
Net income                               19,222       19,497         8,661       4,769        3,510

Total assets                             71,116       77,432        86,009      91,073      117,341
Senior secured project note              13,814       23,210        38,934      56,936       67,882
Total liabilities                        13,896       39,434        67,508      81,233       89,290
</TABLE>

(1)       In 1998,  the  Royalty  Guarantor  received  $25,000  in a  settlement
          related to the GEO East Mesa payments.

(2)       Information  as of  December  31,  1995  and for the year  then  ended
          reflects  adjustments  which  have been made to the net  assets of the
          Royalty  Guarantor to reflect the effect of the  acquisition  of Magma
          accounted for as a purchase  business  combination  pushed down to the
          Royalty Guarantor.

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

FACTORS AFFECTING RESULTS OF OPERATIONS

     Funding  Corporation was organized for the sole purpose of acting as issuer
of senior secured notes and bonds.  On October 13, 1998,  June 20, 1996 and July
21, 1995,  the Funding  Corporation  issued $285 million,  $135 million and $475
million, respectively, of senior secured notes and bonds (the "Securities"). The
Securities  are payable  from  payments  made of  principal  and interest on the
Project Notes by the Guarantors, to the Funding Corporation.  The Securities are
guaranteed on a joint and several basis by the Guarantors. The guarantees of the
Partnership Guarantors and Royalty Guarantor are limited to available cash flow.
The Funding  Corporation  does not conduct any operations apart from issuing the
Securities.

     The periodic  results of operations  for the  Guarantors  are influenced to
varying  degrees  by a number of  factors,  principally  the  level of  revenues
received under the power purchase agreements,  project capacity utilization, the
level of operating expenses and capital expenditures.

POWER PURCHASE AGREEMENTS

     The Imperial  Valley Project  consists of the  Partnership  Project and the
Salton Sea Project located in the Imperial  Valley in California.  The operating
Partnership  Project  consists  of the Vulcan,  Hoch (Del  Ranch),  Elmore,  and
Leathers  Partnerships.  The operating Salton Sea Project consists of Salton Sea
I, Salton Sea II, Salton Sea III and Salton Sea IV.

     Each of the Projects sells electricity to Edison pursuant to a separate SO4
Agreement  or  a  negotiated  power  purchase  agreement.  Each  power  purchase
agreement is independent of the others, and performance  requirements  specified
within one such  agreement  apply only to the  Project  which is subject to that
agreement.  The power purchase agreements provide for energy payments,  capacity
payments  and  capacity  bonus  payments.  Edison  makes fixed  annual  capacity
payments and capacity bonus payments to the projects to the extent that capacity
factors exceed certain benchmarks.  The price for capacity is fixed for the life
of the SO4 Agreements and are significantly higher in the months of June through
September. Energy payments are at increasing fixed rates for the first ten years
after firm operation and thereafter at Edison's Avoided Cost of Energy.

     The  scheduled  energy  price  periods  of the  Partnership  Projects'  SO4
Agreements  extended  until February 1996 for the Vulcan  Partnership,  December
1998  for the Del  Ranch  and  Elmore  Partnerships  and  December  1999 for the
Leathers Partnerships.

     Salton Sea I sells  electricity to Edison pursuant to a 30-year  negotiated
power purchase  agreement,  as amended (the "Salton Sea I PPA"),  which provides
for capacity and energy payments.  The energy payment is calculated using a Base
Price which is subject to  quarterly  adjustments  based on a basket of indices.
The time period  weighted  average energy payment for Salton Sea I was 5.3 cents
per kWh during 1999. As the Salton Sea I PPA is not an SO4 Agreement, the energy
payments do not revert to Edison's Avoided Cost of Energy.  The capacity payment
is approximately $1.1 million per annum.

     Salton Sea II and Salton Sea III sell  electricity  to Edison  pursuant  to
30-year  modified SO4 Agreements  that provide for capacity  payments,  capacity
bonus payments and energy payments. The price for contract capacity and contract
capacity  bonus  payments is fixed for the life of the modified SO4  Agreements.
The energy payments for the first ten year period, which period expires in April
2000 for  Salton  Sea II and  expired  in  February  1999 for Salton Sea III are
levelized at a time period weighted  average of 10.6 cents per kWh and 9.8 cents
per kWh for  Salton Sea II and Salton  Sea III,  respectively.  Thereafter,  the
monthly energy payments will be at Edison's  Avoided Cost of Energy.  For Salton
Sea II only,  Edison  is  entitled  to  receive,  at no cost,  5% of all  energy
delivered in excess of 80% of contract  capacity through September 30, 2004. The
annual  capacity  and bonus  payments  for  Salton Sea II and Salton Sea III are
approximately $3.3 million and $9.7 million, respectively.
<PAGE>

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

     For the year ended  December 31, 1999 and 1998,  Edison's  average  Avoided
Cost of Energy  was 3.1 cents  and 3.0  cents  per kWh,  respectively,  which is
substantially  below  the  contract  energy  prices  earned  for the year  ended
December 31,  1999.  Estimates  of Edison's  future  Avoided Cost of Energy vary
substantially  from year to year. The Company cannot predict the likely level of
Avoided  Cost of Energy  prices  under the SO4  Agreements  and the modified SO4
Agreements  at the  expiration of the scheduled  payment  periods.  The revenues
generated by each of the projects  operating  under SO4  Agreements  will likely
decline  significantly after the expiration of the respective  scheduled payment
periods.

CAPACITY UTILIZATIONS

     For purposes of  consistency  in  financial  presentation,  plant  capacity
factors for Vulcan,  Hoch (Del Ranch),  Elmore and Leathers  plants are based on
capacity amounts of 34, 38, 38, and 38 net MW  respectively,  and for Salton Sea
I, Salton Sea II, Salton Sea III and Salton Sea IV plants,  are based on nominal
capacity  amounts  of 10,  20,  49.8 and 39.6 net MW,  respectively.  Each plant
possesses an  operating  margin  which  allows for  production  in excess of the
amount  listed  above.  Utilization  of this  operating  margin is based  upon a
variety of factors and can be expected to vary  throughout the year under normal
operating conditions.

     The  following   operating  data  represents  the  aggregate  capacity  and
electricity production of Salton Sea I and II, Salton Sea III and Salton Sea IV:

                                          Years Ended December 31,
                                  1999            1998           1997

  Overall capacity factor         91.9%           94.2%          95.6%
  Capacity NMW (average)          119.4           119.4          119.4
  Kwh produced (in thousands)   960,800         985,500        999,400

The following  operating data represents the aggregate  capacity and electricity
production of Vulcan, Del Ranch, Elmore and Leathers:

                                       Years Ended December 31,
                                  1999            1998           1997
  Operating capacity factor      103.4%          101.3%         102.2%
  Capacity NMW (average)          148.0           148.0          148.0
  Kwh produced (in thousands) 1,339,900       1,313,900      1,324,400


<PAGE>

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

REVENUES

     The Salton Sea Guarantors' sales of electricity  decreased to $81.9 million
for the year ended  December 31, 1999 from $106.3 million for the same period in
1998.  The decrease is due to Salton Sea III reaching the end of its fixed price
period in February,  1999. The Salton Sea  Guarantors'  sales of electricity was
$106.3  million for the year ended  December 31, 1998 compared to $106.3 million
for the same period in 1997.

     The  Partnership  Guarantors'  sales of  electricity  decreased  to  $105.9
million for the year ended  December  31, 1999 from $165.8  million for the same
period in 1998,  a 36.1%  decrease.  The decrease is due to the end of the fixed
price  period  at Del  Ranch  and  Elmore  in  December  1998.  The  Partnership
Guarantors' sales of electricity  increased to $165.8 million for the year ended
December  31,  1998 from  $158.1  million  for the same  period in 1997,  a 4.8%
increase. This increase was due primarily to scheduled price increases.

     Interest and other income for the Partnership  Guarantors increased to $9.1
million  for the year ended  December  31,  1999 from $6.8  million for the same
period  in 1998.  Interest  and  other  income  for the  Partnership  Guarantors
increased to $6.8 million for the year ended December 31, 1998 from $4.2 million
for the same period in 1997.  The increases  were due to interest  income on the
higher restricted cash balances.

     The Royalty Guarantor revenue decreased to $26.3 million for the year ended
December  31,  1999 from  $51.7  million  for the same  period in 1998 and $32.2
million for the same  period in 1997.  The  decreases  in royalty  revenue  were
primarily  due to a  decrease  in East Mesa  payments  related  to a  settlement
agreement  in 1998 for prior years and the result of the lower  energy  sales at
the Partnership Projects resulting in lower royalties.

OPERATING EXPENSES

     The Salton Sea  Guarantors'  operating  expenses,  which  include  royalty,
operating, and general and administrative expenses,  decreased to $28.8 million,
or 2.99 cents per kWh, for the year ended December 31, 1999,  from $30.3 million
or 3.08  cents per kWh for the same  period in 1998 and  $30.9  million  or 3.09
cents per kWh for the same period in 1997. The decrease in expenses from 1998 to
1999 was due primarily to lower royalty  expense and management  fees associated
with the lower revenue.

     The Partnership  Guarantors'  operating  expenses,  which include  royalty,
operating, and general and administrative expenses,  decreased to $48.0 million,
or 3.88 cents per kWh, for the year ended December 31, 1999,  from $63.7 million
or 5.26  cents per kWh for the same  period in 1998 and  $64.1  million  or 5.25
cents per kWh for the same  period in 1997.  The  decrease in costs from 1998 to
1999 was due primarily to the decreases in royalty expense due to lower revenue.

     The Royalty  Guarantor's  operating  expenses decreased to $4.6 million for
the year ended  December  31, 1999 from $8.1 million for the same period of 1998
and $7.8 million for the same period of 1997.  The decrease was due to scheduled
decreases  in third  party  lessor  royalties  related to the  decreases  in the
Partnership Projects' sales of electricity.

DEPRECIATION AND AMORTIZATION

     The Salton Sea Guarantors' depreciation and amortization increased to $16.9
million for the year ended  December  31,  1999 from $14.9  million for the year
ended  December 31, 1998 and $14.7 million for the year ended December 31, 1997.
The increase was due to an adjustment in the step up depreciation charges.

     The Partnership  Guarantors'  depreciation  and  amortization  decreased to
$22.6  million for the year ended  December 31, 1999 from $48.6  million for the
same period in 1998 and $38.8 million for the same period in 1997.  The decrease
from 1998 to 1999 was  primarily due to reduced step up  depreciation  after the
end of the fixed price periods for the Del Ranch and Elmore projects as a result
of greater value being assigned to the scheduled price periods for the contracts
relating  to these  projects at the time of  acquisition.  The  scheduled  price
periods for the contracts  relating to Del Ranch and Elmore  expired in December
1998. The increase from 1997 to 1998 was due primarily to a modification  of the
amortization method used to amortize the fair value adjustments  associated with
the scheduled price periods of the four plants acquired in the Imperial  Valley.
The amortization  method was modified from the weighted average of the scheduled
price  periods  of the  four  plants  to the  scheduled  price  periods  of each
individual plant. The impact of this  modification was to increase  amortization
expense by $7.5 million in 1998 compared with 1997.
<PAGE>

     The Royalty Guarantor's amortization decreased to $7.1 million for the year
ended  December 31, 1999 from $9.8 million for the same period in 1998 and 1997.
The decrease in 1999 is consistent with the Company's scheduled  amortization of
the royalty  stream and the excess of cost over fair value  related to the Magma
acquisition.

INTEREST EXPENSE

     The Salton Sea Guarantors'  interest expense,  net of capitalized  amounts,
decreased  to $15.0  million  for the year ended  December  31,  1999 from $16.0
million for the same period in 1998.  The decrease  was due  primarily to higher
capitalized  interest  charges  on  the  Salton  Sea V  construction  costs  and
repayment  of  debt.  The  Salton  Sea  Guarantors'  interest  expense,  net  of
capitalized amounts,  decreased to $16.0 million for the year ended December 31,
1998 from  $18.1  million  for the same  period in 1997.  The  decrease  was due
primarily to the repayment of debt.

    The Partnership  Guarantors'  interest expense,  net of capitalized amounts,
increased to $6.4 million for the year ended December 31, 1999 from $3.6 million
for the same period in 1998 and $4.4  million  for the same period in 1997.  The
changes are a result of the issuance of $201.8 million of senior secured project
notes in October 1998 partially  offset by repayment of debt and  capitalization
of interest on the mineral extraction project.

     The Royalty Guarantors'  interest expense decreased to $1.7 million for the
year ended  December  31, 1999 from $2.8 million for the same period in 1998 and
$4.2  million  for the same  period  in  1997.  These  decreases  are due to the
repayment of debt.

INCOME TAX PROVISION

     The Salton Sea  Guarantors  are  substantially  comprised of  partnerships.
Income taxes are the  responsibility  of the partners and Salton Sea  Guarantors
have no  obligation  to provide  funds to the  partners  for  payment of any tax
liabilities. Accordingly, the Salton Sea Guarantors have no tax obligations.

     The Partnership Guarantors' income tax provision decreased to $12.5 million
for the year ended  December 31, 1999 from $19.5  million for the same period in
1998 and $21.4 million for the same period in 1997. Income taxes will be paid by
the parent of the  Guarantors  from  distributions  to the parent company by the
Guarantors which occur after payment of operating expenses and debt service.

     The Royalty Guarantor's income tax provision decreased to a benefit of $6.3
million for the year ended  December  31, 1999 from an expense of $11.5  million
for the same period in 1998.  The decrease in the provision is due to the change
in the Royalty Guarantor from a corporation to a limited liability company which
is not taxed. The Royalty  Guarantor's  income tax provision  increased to $11.5
million  for the year ended  December  31,  1998 from $1.8  million for the same
period in 1997.  The  increase  in the  provision  can be  attributed  to higher
royalty stream income.

NET INCOME

     The Funding  Corporation's  net income was $1.1  million for the year ended
December 31, 1999 compared to $1.8 million for the year ended  December 31, 1998
and $1.5 million for the period  ended  December  31,  1997,  which  represented
interest   income  and  expense,   net  of  applicable   tax,  and  the  Funding
Corporation's 1% equity in earnings of the Guarantors.
<PAGE>

     The Salton Sea  Guarantors'  net income  decreased to $23.0 million for the
year ended  December  31,  1999,  compared  to $45.9  million for the year ended
December 31, 1998 and $42.8 million for the year ended December 31, 1997.

     The Partnership  Guarantors' net income  decreased to $25.5 million for the
year ended  December  31,  1999,  compared  to $37.1  million for the year ended
December 31, 1998 and $33.6 million for the year ended December 31, 1997.

     The Royalty  Guarantor's net income decreased to $19.2 million for the year
ended  December 31, 1999,  compared to $19.5 million for the year ended December
31, 1998 and $8.7 million for the year ended December 31, 1997.

CAPITAL RESOURCES AND LIQUIDITY

     CalEnergy Minerals LLC, a Partnership Guarantor ("Minerals LLC"), developed
and owns the rights to  proprietary  processes  for the  extraction of zinc from
elements  in  solution  in the  geothermal  brine  and  fluids  utilized  at the
Company's Imperial Valley plants (the "Zinc Recovery Project") A pilot plant has
successfully  produced  commercial quality zinc at the company's Imperial Valley
Project.  The Company's affilates intend to sequentially  develop facilities for
the  extraction of  manganese,  silver,  gold,  lead,  boron,  lithium and other
products  as it  further  develops  the  extraction  technology.  The  Company's
affiliates are also  investigating  producing  silica as an extraction  project.
Silica  is used as a filler  for  such  products  as  paint,  plastics  and high
temperature cement.

     Minerals LLC is constructing  the Zinc Recovery  Project which will recover
zinc from the geothermal brine (the "Zinc Recovery Project"). Facilities will be
installed  near the Imperial  Valley  Project  sites to extract a zinc  chloride
solution  from the  geothermal  brine  through  an ion  exchange  process.  This
solution will be  transported  to a central  processing  plant where zinc ingots
will  be  produced  through  solvent  extraction,   electrowinning  and  casting
processes.  The  Zinc  Recovery  Project  is  designed  to  have a  capacity  of
approximately  30,000  metric  tonnes  per year  and is  scheduled  to  commence
commercial operation in mid-2000. In September 1999, Minerals LLC entered into a
sales agreement  whereby all zinc produced by the Zinc Recovery  Project will be
sold to Cominco,  Ltd.  The initial  term of the  agreement  expires in December
2005.

     The Zinc  Recovery  Project is being  constructed  by  Kvaerner  U.S.  Inc.
("Kvaerner")  pursuant  to a date  certain,  fixed-price,  turnkey  engineering,
procurement  and   construction   contract  (the  "Zinc  Recovery   Project  EPC
Contract").  Kvaerner is a wholly-owned  indirect subsidiary of Kvaerner ASA, an
internationally  recognized engineering and construction firm experienced in the
metals,  mining  and  processing  industries.  Total  project  costs of the Zinc
Recovery  Project are expected to be approximately  $200.9 million.  The Company
has incurred $92.8 million of such costs through December 31, 1999.

    Salton Sea Power LLC, a Salton Sea Guarantor, is constructing Salton Sea V.
Salton  Sea V  will  be a 49 net MW  geothermal  power  plant  which  will  sell
approximately  one-third  of its net output to the Zinc  Recovery  Project.  The
remainder will be sold through the California  Power Exchange ("PX") or in other
market transactions.

     Salton Sea V is being constructed pursuant to a date certain,  fixed price,
turn-key  engineering,  procurement and construction contract (the "Salton Sea V
EPC Contract") by Stone & Webster Engineering Corporation ("SWEC"). Salton Sea V
is scheduled to commence commercial  operation in mid-2000.  Total project costs
of Salton Sea V are  expected to be  approximately  $119.1  million.  Salton Sea
Power  LLC has  incurred  approximately  $85.6  million  of such  costs  through
December 31, 1999.

     CE  Turbo  LLC,  a  Partnership  Guarantor,  is  constructing  the CE Turbo
Project.  The CE Turbo Project will have a capacity of 10 net MW. The net output
of the CE  Turbo  Project  will be sold to the  Zinc  Recovery  Project  or sold
through the PX or in other market transactions.

     The  Partnership  Projects are upgrading the  geothermal  brine  processing
facilities  at the  Vulcan  and Del  Ranch  Projects  with  the  Region  2 Brine
Facilities  Construction.  In  addition  to  incorporating  the pH  modification
process,  which has reduced operating costs at the Salton Sea Projects, the new,
more  efficient   facilities  will  achieve  economies  through  improved  brine
processing systems and the utilization of more modern equipment. The Partnership
Projects expect these improvements to reduce  brine-handling  operating costs at
the Vulcan Project and the Del Ranch Project.

     The CE Turbo  Project and the Region 2 Brine  Facilities  Construction  are
being  constructed  by SWEC  pursuant to a date  certain,  fixed price,  turnkey
engineering,  procurement and  construction  contract (the "Region 2 Upgrade EPC
Contract").  The  obligations  of  SWEC  are  guaranteed  by  Stone  &  Webster,
Incorporated.  The CE Turbo Project is scheduled to commence initial  operations
in early 2000 and the Region 2 Brine Facilities  Construction is scheduled to be
completed in mid-2000. Total project costs for both the CE Turbo Project and the
Region 2 Brine Facilities  Construction  are expected to be approximately  $63.7
million.  The Company has  incurred  approximately  $40.8  million of such costs
through December 31, 1999.
<PAGE>

      The operating  Salton Sea  Guarantors'  only source of revenue is payments
received  pursuant to long term power sales  agreements with Edison,  other than
interest  earned on funds on  deposit.  The  operating  Partnership  Guarantors'
primary source of revenue is payments received pursuant to long term power sales
agreements  with  Edison.  The  Royalty  Guarantor's  only  source of revenue is
payments  received  pursuant to resource lease  agreements  with the Partnership
Projects and agreements with the East Mesa Project.  These payments, for each of
the Guarantors,  are expected to be sufficient to fund operating and maintenance
expenses,  payments of  interest  and  principal  on the  Securities,  projected
capital expenditures and debt service reserve fund requirements.

     Inflation has not had a  significant  impact on the  Guarantors'  operating
revenue and costs; energy payments for the Guarantors  (excluding those projects
receiving  avoided cost rates) will  continue to be based on fixed rates and are
not adjusted for  inflation  through the initial  ten-year  period of each power
purchase agreement.

ITEM 7A.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

     The following  discussion of the Company's exposure to various market risks
contains  "forward-looking  statements"  that involve  risks and  uncertainties.
These  projected  results  have  been  prepared  utilizing  certain  assumptions
considered reasonable in the circumstances and in light of information currently
available to the Company.  Actual  results  could differ  materially  from those
projected in the forward-looking information.

INTEREST RATE RISK

     At December 31, 1999, the Funding Corporation had fixed-rate long-term debt
of $569.0 million in principal amount and having a fair value of $540.7 million.
These  instruments are fixed-rate and therefore do not expose the Company to the
risk of earnings loss due to changes in market interest rates. However, the fair
value of these  instruments  would  decrease by  approximately  $32.2 million if
interest  rates were to increase by 10% from their  levels at December 31, 1999.
In general,  such a decrease in fair value would impact  earnings and cash flows
only if the  Company  were to  reacquire  all or a portion of these  instruments
prior to their maturity.

     Certain  information  included  in  this  report  contains  forward-looking
statements made pursuant to the Private Securities Litigation Reform Act of 1995
("Reform Act"). Such statements are based on current  expectations and involve a
number of known and unknown risks and uncertainties  that could cause the actual
results and  performance of the Company to differ  materially  from any expected
future  results or  performance,  expressed or implied,  by the  forward-looking
statements. In connection with the safe harbor provisions of the Reform Act, the
Company has  identified  important  factors that could cause  actual  results to
differ materially from such  expectations,  including  development  uncertainty,
operating uncertainty, acquisition uncertainty,  uncertainties relating to doing
business  outside of the United  States,  uncertainties  relating to  geothermal
resources,  uncertainties  relating to domestic and  international  economic and
political  conditions  and  uncertainties  regarding the impact of  regulations,
changes in government policy,  industry deregulation and competition.  Reference
is made to all of the  Company's SEC filings  incorporated  herein by reference.
The Company  assumes no  responsibility  to update  forward-looking  information
contained herein.

<PAGE>

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                         SALTON SEA FUNDING CORPORATION
                         INDEX TO FINANCIAL STATEMENTS

SALTON SEA FUNDING CORPORATION

Independent auditors' report--Deloitte & Touche LLP...........................31

Balance sheets as of December 31, 1999 and 1998 ..............................32

Statements of operations for the three years ended December 31, 1999 .........33

Statements of stockholder's equity for the three years ended
  December 31, 1999...........................................................34

Statements of cash flows for the three years ended December 31, 1999 .........35

Notes to financial statements.................................................36

SALTON SEA GUARANTORS

Independent auditors' report--Deloitte & Touche LLP...........................38

Combined balance sheets as of December 31, 1999  and 1998.....................39

Combined statements of operations for the three years ended
  December 31, 1999...........................................................40

Combined statements of Guarantors' equity for the three years ended
  December 31, 1999...........................................................41

Combined statements of cash flows for the three years ended December 31, 1999.42

Notes to combined financial statements........................................43

<PAGE>

PARTNERSHIP GUARANTORS

Independent auditors' report--Deloitte & Touche LLP...........................48

Combined balance sheets as of December 31, 1999 and 1998......................49

Combined statements of operations for the three years ended December 31, 1999.50

Combined statements of Guarantors' equity for the three years ended
  December 31, 1999...........................................................51

Combined statements of cash flows for the three years ended December 31, 1999.52

Notes to combined financial statements........................................53

SALTON SEA ROYALTY LLC

Independent auditors' report--Deloitte & Touche LLP...........................65

Balance sheets as of December 31, 1999 and 1998...............................66

Statements of operations for the three years ended December 31, 1999..........67

Statements of equity for the three years ended December 31, 1999 .............68

Statements of cash flows for the three years ended December 31, 1999 .........69

Notes to financial statements.................................................70

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholder
Salton Sea Funding Corporation
Omaha, Nebraska

    We have  audited  the  accompanying  balance  sheets of Salton  Sea  Funding
Corporation  as of  December  31, 1999 and 1998 and the  related  statements  of
operations,  stockholder's  equity and cash flows for each of the three years in
the  period  ended  December  31,  1999.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

    We conducted  our audits in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

    In our opinion,  such financial  statements  present fairly, in all material
respects,  the  financial  position  of Salton  Sea  Funding  Corporation  as of
December 31, 1999 and 1998 and the results of its  operations and its cash flows
for each of the three years in the period ended  December 31, 1999 in conformity
with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Omaha, Nebraska
January 25, 2000

<PAGE>

                         SALTON SEA FUNDING CORPORATION
                                 BALANCE SHEETS
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                                              December 31,
                                                          1999          1998
ASSETS

Cash                                                  $   2,086     $   17,629
Prepaid expenses and other assets                         3,617          6,768
Due from affiliates                                       2,118            ---
Current portion secured project notes from guarantors    25,072         57,836
                                                         ------         ------
Total current assets                                     32,893         82,233

Secured project notes from Guarantors                   543,908        568,980
Investment in 1% of net assets of Guarantors              8,847          8,124
                                                      $ 585,648     $  659,337
                                                        =======        =======

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:

Accrued liabilities                                   $   3,607     $    3,971
Due to affiliates                                           ---         16,612
Current portion long term debt                           25,072         57,836
                                                         ------         ------
Total current liabilities                                28,679         78,419

Senior secured notes and bonds                          543,908        568,980
                                                      ---------       ---------
    Total liabilities                                   572,587        647,399
Commitments and contingencies (Note 3)

Stockholder's equity:
Common stock--authorized 1,000
    shares, par value $.01 per share;
    issued and outstanding 100 shares                         -             -
Additional paid-in capital                                5,366         5,366
Retained earnings                                         7,695         6,572
                                                      ---------     ---------
    Total stockholder's equity                           13,061        11,938
                                                      ---------     ---------
                                                      $ 585,648     $ 659,337
                                                        =======       =======

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

<PAGE>

                         SALTON SEA FUNDING CORPORATION
                            STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)

                                           For the Year Ended December 31,
                                         1999        1998              1997
Revenues:

Interest income                        $47,815      $38,349           $39,823
Equity in earnings of Guarantors           723          980               851
                                       -------      -------           -------
                                        48,538       39,329            40,674
Expenses:

General and administrative expenses        775          804               748
Interest expense                        45,859       35,495            37,443
                                        ------      -------            ------
Total expenses                          46,634       36,299            38,191
Income before income taxes               1,904        3,030             2,483
Provision for income taxes                 781        1,247             1,022
                                     ---------   ----------        ----------
Net income                             $ 1,123      $ 1,783           $ 1,461
                                        ======       ======            ======


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

<PAGE>

                         SALTON SEA FUNDING CORPORATION
                       STATEMENTS OF STOCKHOLDER'S EQUITY
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999
                             (DOLLARS IN THOUSANDS)

                                                Additional
                                Common Stock      Paid-in   Retained    Total
                              Shares    Amount    Capital    Earnings   Equity

Balance, January 1, 1997         100   $      -  $ 5,366      $ 3,328  $  8,694

Net income                         -          -        -        1,461     1,461
                              ------    --------   --------  --------  --------
Balance, December 31, 1997       100          -    5,366        4,789    10,155

Net income                         -          -        -        1,783     1,783
                              ------    --------   --------  --------  --------
Balance, December 31, 1998       100          -    5,366        6,572    11,938

Net income                         -          -        -        1,123     1,123
                              ------    --------   --------  --------  --------
Balance, December 31, 1999       100   $      -  $ 5,366      $ 7,695  $ 13,061
                               =====      =====    =====        =====     =====


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

<PAGE>

                         SALTON SEA FUNDING CORPORATION
                            STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

                                               For the Years Ended December 31,
                                                  1999        1998       1997
Cash flows from operating activities:

    Net income                                 $  1,123    $   1,783  $  1,461
    Adjustments to reconcile net income to net
       cash flows from operating activities:

    Equity in earnings of guarantors               (723)        (980)     (851)
    Changes in assets and liabilities:
       Prepaid expenses and other assets          3,151       (3,945)      629
       Accrued liabilities                         (364)       1,189      (509)
                                               --------    ---------  --------
    Net cash flows from operating activities      3,187       (1,953)      730
                                               --------    ---------  --------
Cash flows from investing activities:

    Decrease in restricted cash                     ---          ---    14,044
    Secured project notes from Guarantors           ---     (285,000)      ---
    Principal repayments of secured project
          notes from Guarantors                  57,836      106,938    90,228
                                               --------    ---------  --------
    Net cash flows from investing activities     57,836     (178,062)  104,272
                                               --------    ---------  --------
Cash flows from financing activities:
    Proceeds from offering of senior secured

       notes and bonds                              ---      285,000       ---
    Repayment of senior secured
       notes and bonds                          (57,836)    (106,938)  (90,228)
    Due to affiliates                           (18,730)       4,014   (12,424)
                                               --------    ---------  --------
    Net cash flows from financing activities    (76,566)     182,076  (102,652)
                                               --------    ---------  --------
Net change in cash                              (15,543)       2,061     2,350
Cash at the beginning of period                  17,629       15,568    13,218
                                               --------    ---------  --------
Cash at the end of period                      $  2,086    $  17,629  $ 15,568
                                               ========      =======   =======
Supplemental disclosure
    Interest paid                              $ 46,210    $  34,326  $ 37,974
                                               ========      =======   =======
    Income taxes paid                          $    781    $   1,247  $  1,022
                                               ========      =======   =======


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

<PAGE>

                         SALTON SEA FUNDING CORPORATION
                          NOTES TO FINANCIAL STATEMENTS

1. THE PURPOSE AND BUSINESS OF SALTON SEA FUNDING CORPORATION

     Salton Sea  Funding  Corporation  (the  "Funding  Corporation"),  which was
formed on June 20,  1995,  is a special  purpose  Delaware  corporation  and was
organized  for the sole purpose of acting as issuer of senior  secured notes and
bonds.  On July 21,  1995,  June 20,  1996 and  October  31,  1998,  the Funding
Corporation  issued  $475.0  million  and $135.0  million  and  $285.0  million,
respectively,   of  Senior   Secured   Notes  and   Bonds   (collectively,   the
"Securities").

    The Funding Corporation is a wholly-owned subsidiary of Magma Power Company,
which  in  turn  was   wholly-owned  by  MidAmerican   Energy  Holdings  Company
("MidAmerican").  On February 8, 1999, MidAmerican created a new subsidiary,  CE
Generation  and  subsequently  transferred  its  interest in the Company and its
power  generation  assets in the Imperial Valley to CE Generation,  with certain
assets being retained by MidAmerican.  On March 3, 1999,  MidAmerican closed the
sale of 50% of its  ownership  interests  in CE  Generation  to El Paso  Holding
Company, an affiliate of El Paso Energy Corporation.

    The  Securities  are payable from the proceeds of payments made of principal
and interest on the Secured  Project  Notes from the  Guarantors  to the Funding
Corporation.  The Securities are also guaranteed on a joint and several basis by
the Salton Sea Guarantors, the Partnership Guarantors and Salton Sea Royalty LLC
(collectively the  "Guarantors").  The guarantees of the Partnership  Guarantors
and Salton Sea  Royalty  LLC are  limited to  available  cash flow.  The Funding
Corporation does not conduct any operations apart from issuing the Securities.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVESTMENT IN GUARANTORS

    Since  the  Funding  Corporation  has  the  ability  to  assert  significant
influence over the operations of the Guarantors, it accounts for its one percent
investment in the Guarantors using the equity method of accounting.

INCOME TAXES

    The Funding  Corporation is included in the consolidated  income tax returns
with its parent and  affiliates.  Income taxes are provided on a separate return
basis;  however,  tax obligations of the Funding Corporation will be remitted to
the parent only to the extent of cash flows available  after operating  expenses
and debt service.

FAIR VALUES OF FINANCIAL INSTRUMENTS

    Fair  values  have been  estimated  based on quoted  market  prices for debt
issues listed on exchanges.  Fair values of financial  instruments  that are not
actively  traded  are  based on  market  prices of  similar  instruments  and/or
valuation  techniques  using market  assumptions.  Unless  otherwise  noted, the
estimated fair value amounts do not differ significantly from recorded values.

USE OF ESTIMATES

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

Actual results could differ from those estimates.
<PAGE>

ACCOUNTING PRONOUNCEMENTS

     In June 1998,  the FASB  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging Activities",  which established accounting and reporting
standards for derivative  instruments  and for hedging  activities.  It requires
that an entity  recognize all derivatives as either assets or liabilities in the
statement of financial  position and measure  those  instruments  at fair value.
This  statement is effective for all fiscal  quarters of fiscal years  beginning
after June 15,  2000.  The  Company  has not yet  determined  the impact of this
accounting pronouncement.

3. SENIOR SECURED NOTES AND BONDS

The Funding Corporation's debt securities (the "Notes and Bonds") are as follows
(in thousands):

                  SENIOR  FINAL MATURITY           DECEMBER 31,    DECEMBER 31,
              SECURED SERIES  DATE           RATE      1999            1998

July 21, 1995     A Notes  May 30, 2000      6.69%    $18,532         $48,436
July 21, 1995     B Bonds  May 30, 2005      7.37%    101,776         106,980
July 21, 1995     C Bonds  May 30, 2010      7.84%    109,250         109,250
June 20, 1996     D Notes  May 30, 2000      7.02%      1,500          12,150
JUNE 20, 1996     E BONDS  MAY 30, 2011      8.30%     52,922          65,000
OCTOBER 13, 1998  F BONDS  NOVEMBER 30, 2018 7.475%   285,000         285,000
                                                     ---------        --------
                                                     $568,980        $626,816

    Principal  and  interest  payments  are  made in  semi-annual  installments.
Principal  maturities  of the Senior  Secured Notes and Bonds are as follows (in
thousands):

                  2000                              $  25,072
                  2001                                 23,658
                  2002                                 28,572
                  2003                                 28,086
                  2004                                 30,588
                  Thereafter                          433,004
                                                  -----------
                                                     $568,980
                                                      =======

     On  October  13,  1998,  the  Funding  Corporation   completed  a  sale  to
institutional  investors of $285.0  million  aggregate  amount of 7.475%  Senior
Secured  Series F Bonds due November 30,  2018.  The proceeds  from the offering
will be used to fund  construction  of two  new  geothermal  power  projects,  a
related zinc recovery project,  certain upgrades for brine processing facilities
and other capital improvements and financing costs.

     Pursuant to a depository agreement,  Funding Corporation established a debt
service  reserve  fund in the form of a letter of credit in the  amount of $42.5
million from which scheduled interest and principal payments can be made.

          The  estimated  fair values of the Senior  Secured  Notes and Bonds at
December 31, 1999 and 1998 were $540.7 million and $646.4 million, respectively.

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

     We have audited the accompanying  combined balance sheets of the Salton Sea
Guarantors as of December 31, 1999 and 1998, and the related combined statements
of operations,  Guarantors' equity and cash flows for each of the three years in
the  period  ended  December  31,  1999.  These  financial  statements  are  the
responsibility of the Salton Sea Guarantors'  management.  Our responsibility is
to express an opinion on these financial statements based on our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  such combined financial  statements present fairly, in all
material  respects,  the financial  position of the Salton Sea  Guarantors as of
December 31, 1999 and 1998 and the results of its  operations and its cash flows
for each of the three years in the period ended  December 31, 1999 in conformity
with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Omaha, Nebraska
January 25, 2000

<PAGE>

                              SALTON SEA GUARANTORS
                             COMBINED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)
                                                                 December 31,
                                                              1999         1998
Accounts receivable                                       $   11,537   $ 15,957
Prepaid expenses and other assets                             11,695     12,410
                                                              ------     ------
Total current assets                                          23,232     28,367

Restricted cash                                               10,001     71,673
Property, plant, contracts and equipment, net                552,903    480,293
Excess of cost over fair value of net assets acquired, net    46,878     48,182
                                                          ---------- ----------
                                                            $633,014   $628,515
                                                             =======    =======


LIABILITIES AND GUARANTORS' EQUITY
Liabilities:

Accounts payable                                          $       33   $    504
Accrued liabilities                                            7,862      7,166
Current portion of long term debt                              9,737     16,076
                                                               -----     ------
Total current liabilities                                     17,632     23,746

Due to affiliates                                             27,993     30,688
Senior secured project note                                  284,217    293,954
                                                          ---------- ----------
Total liabilities                                            329,842    348,388

Commitments and contingencies (Notes 5 and 6)

Total Guarantors' equity                                     303,172    280,127
                                                          ---------- ----------
                                                            $633,014   $628,515
                                                             =======    =======


The accompanying notes are an integral part of the combined financial statements

<PAGE>

                              SALTON SEA GUARANTORS
                        COMBINED STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)

                                                        Year Ended December

31,

                                         1999          1998           1997
Revenues:

Sales of electricity                   $ 81,850       $106,274       $106,252
Interest and other income                 1,868            817            173
                                     ----------     ----------     ----------
Total Revenues                           83,718        107,091        106,425
                                     ----------     ----------     ----------
Expenses:
Operating, general and

    administrative expenses              28,772         30,306         30,865
Depreciation and amortization            16,891         14,857         14,689
Interest expense                         24,251         21,730         23,004
Less capitalized interest                (9,241)        (5,741)        (4,949)
                                     ----------    -----------     ----------
Total expenses                           60,673         61,152         63,609
                                     ----------    -----------     ----------
Net income                              $23,045        $45,939        $42,816
                                     ==========     ==========     ==========


The accompanying notes are an integral part of the combined financial statements

<PAGE>

                              SALTON SEA GUARANTORS
                    COMBINED STATEMENTS OF GUARANTORS' EQUITY
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999
                             (DOLLARS IN THOUSANDS)

Balance, January 1, 1997                     $   191,372

Net income                                        42,816

                                            ------------
Balance, December 31, 1997                       234,188

Net income                                        45,939

                                            ------------
Balance, December 31, 1998                       280,127

Net income                                        23,045

                                            ------------
Balance, December 31, 1999                  $    303,172
                                            ============

The accompanying notes are an integral part of the combined financial statements

<PAGE>

                              SALTON SEA GUARANTORS
                        COMBINED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

                                                     Years Ended December 31,
                                                    1999        1998     1997

Cash flows from operating activities:

Net income                                       $  23,045  $  45,939 $  42,816
Adjustments to reconcile net income to net
   cash provided by operating activities:

     Depreciation and amortization                  16,891     14,857    14,689
     Changes in assets and liabilities:
       Accounts receivable                           4,420       (134)     (869)
       Prepaid expenses and other assets               715        633     2,965
       Accounts payable and accrued liabilities        225       (546)   (2,415)
                                                 ---------  --------- ---------
Net cash flows from operating activities            45,296     60,749    57,186
                                                 ---------  --------- ---------
Cash flows from investing activities:

Capital expenditures                               (88,197)   (15,845)   (7,204)
Decrease (Increase) in restricted cash              61,672    (71,673)      ---
                                                 ---------  --------- ---------
Net cash flows from investing activities           (26,525)   (87,518)   (7,204)
                                                 ---------  --------- ---------
Cash flows from financing activities:

Repayments of senior secured project note         (16,076)   (39,450)  (33,632)
Proceeds from offering of senior secured
   project note                                       ---     83,272       ---
Due to affiliates                                  (2,695)   (17,053)  (16,350)
                                                 ---------- --------- ---------
Net cash flows from financing activities           (18,771)    26,769   (49,982)
                                                 ---------- ---------  --------
Net change in cash                                     ---        ---       ---
Cash at beginning of period                            ---        ---       ---
                                                 ----------  --------  --------
Cash at end of period                            $          $     ---  $    ---
                                                   =======   ========   =======
Supplemental disclosure:
Cash paid for interest                           $  24,394  $  21,434  $ 21,591
                                                   =======   ========   =======

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

<PAGE>

                              SALTON SEA GUARANTORS
                     NOTES TO COMBINED FINANCIAL STATEMENTS

1. ORGANIZATION AND OPERATIONS

     Salton Sea  Guarantors  (the  "Guarantors")  (not a legal  entity) own 100%
interests in four operating  geothermal electric power generating plants (Salton
Sea I,  II,  III and  IV) and a fifth  plant  (Salton  Sea V or the  Salton  Sea
Expansion) which is currently under construction (collectively,  the "Salton Sea
Projects").  All five plants are located in the Imperial  Valley of  California.
The Salton Sea Guarantors  guarantee  loans from Salton Sea Funding  Corporation
("Funding  Corporation"),  an indirect  wholly-owned  subsidiary  of Magma Power
Company ("Magma") which in turn was wholly-owned by MidAmerican  Energy Holdings
Company ("MidAmerican").

     On February 8, 1999,  MidAmerican  created a new subsidiary,  CE Generation
LLC ("CE  Generation") and subsequently  transferred its interest in the Company
and its power  generation  assets in the Imperial Valley to CE Generation,  with
certain  assets being  retained by  MidAmerican.  On March 3, 1999,  MidAmerican
closed the sale of 50% of its  ownership  interests in CE  Generation to El Paso
Holding Company, an affiliate of El Paso Energy Corporation.

   The financial  statements  consist of the combination of (1) Salton Sea Brine
Processing,  L.P.,  a  California  limited  partnership  between  Magma as a 99%
limited partner and Salton Sea Power Company ("SSPC"), a wholly-owned subsidiary
of Magma,  as a 1% general  partner,  (2) Salton Sea Power  Generation,  L.P., a
California limited partnership  between Salton Sea Brine Processing,  L.P., as a
99% limited partner,  and Salton Sea Power Company, as a 1% general partner, (3)
assets  and  liabilities  attributable  to  Salton  Sea IV which are held 99% by
Salton Sea Power Generation, L.P. and 1% by Fish Lake Power LLC ("FLPC") and (4)
Salton Sea Power L.L.C., a Delaware limited liability company. Effective in June
of 1995, 1% interests in SSPC and FLPC were transferred to Funding  Corporation.
All of the  entities in the  combination  are  affiliates  of Magma and indirect
subsidiaries of CE Generation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

   The accompanying  financial  statements  present the combined accounts of the
Salton Sea Projects described above. All significant  intercompany  transactions
and accounts have been eliminated.

   The financial  statements  reflect the acquisition of Magma and the resulting
push  down  to  the  Guarantors  of  the  accounting  as  a  purchase   business
combination.

REVENUE RECOGNITION

   The  Guarantors  recognize  revenues  and related  accounts  receivable  with
respect to their four operating facilities from sales of electricity to Southern
California  Edison Company  ("Edison") on an accrual  basis.  Edison is the sole
customer  of the  Guarantors.  The  Guarantors  earn  energy  payments  based on
kilowatt hours ("kWhs") of energy provided to Edison.  During the first 10 years
for Salton Sea II and III, the Guarantors  earn payments for energy as scheduled
in their SO4 Agreements.  After the 10-year scheduled payment period has expired
(in 1999 for Salton Sea III and 2000 for Salton Sea II), the energy  payment per
kWh throughout the remainder of the contract period will be at Edison's  Avoided
Cost of Energy.

   Salton Sea I sells  electricity  to Edison  pursuant to a 30-year  negotiated
power purchase  agreement,  as amended (the "Salton Sea I PPA"),  which provides
for capacity and energy payments.  The energy payment is calculated using a Base
Price which is subject to  quarterly  adjustments  based on a basket of indices.
The time period  weighted  average energy payment for Salton Sea I was 5.3 cents
per kWh during 1999. As the Salton Sea I PPA is not an SO4 Agreement, the energy
payments do not revert to Edison's Avoided Cost of Energy.  The capacity payment
is approximately $1.1 million per annum.
<PAGE>

   Salton Sea II and  Salton  Sea III sell  electricity  to Edison  pursuant  to
30-year  modified SO4 Agreements  that provide for capacity  payments,  capacity
bonus payments and energy payments. The price for contract capacity and contract
capacity  bonus  payments is fixed for the life of the modified SO4  Agreements.
The energy payments for the first ten year period,  which period expire in April
2000 for  Salton  Sea II and  expired  in  February  1999 for Salton Sea III are
levelized at a time period weighted  average of 10.6 cents per kWh and 9.8 cents
per kWh for  Salton Sea II and Salton  Sea III,  respectively.  Thereafter,  the
monthly energy payments will be Edison's Avoided Cost of Energy.  For Salton Sea
II only,  Edison is entitled to receive,  at no cost, 5% of all energy delivered
in excess of 80% of contract  capacity  through  September 30, 2004.  The annual
capacity  and  bonus  payments  for  Salton  Sea  II  and  Salton  Sea  III  are
approximately $3.3 million and $9.7 million, respectively.

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

   For the year ended December 31, 1999 and 1998,  Edison's average Avoided Cost
of  Energy  was  3.1  cents  and 3.0  cents  per  kWh,  respectively,  which  is
substantially  below the contract  energy  prices  earned in 1999.  Estimates of
Edison's future Avoided Cost of Energy vary substantially from year to year. The
Guarantors  cannot  predict the likely  level of Avoided  Cost of Energy  prices
under the SO4 Agreements at the expiration of the scheduled payment periods. The
revenues  generated by each of the units  operating  under SO4  Agreements  will
likely  decline  significantly  after the  expiration of the relevant  scheduled
payment periods.

   If Edison was unable to perform,  the  Guarantors  could incur an  accounting
loss equal to the entire accounts receivable balance.

RESTRICTED CASH

The restricted cash balance primarily  included  commercial paper,  money market
securities and mortgage backed  securities and was composed of amounts deposited
in  restricted   accounts  which  the  Guarantors   will  use  to  fund  capital
expenditures.

PROPERTY, PLANT, CONTRACTS AND EQUIPMENT

   Property, plant, contracts and equipment are carried at cost less accumulated
depreciation.  The Guarantors provide depreciation and amortization of property,
plants, contracts and equipment upon the commencement of revenue production over
the estimated useful life of the assets.

    Depreciation  of the operating  power plant costs,  net of salvage value, is
computed on the straight line method over the estimated useful lives, between 10
and 30 years.  Depreciation of furniture,  fixtures and equipment is computed on
the straight line method over the estimated  useful lives of the related assets,
which range from three to ten years.

    Power sale agreements  have been assigned values  separately for each of (1)
the remaining  portion of the fixed price periods of the power sales  agreements
and (2) the 20 year avoided cost periods of the power sales  agreements  and are
being amortized separately over such periods using the straight line method.

    The Salton Sea  reservoir  contains  commercial  quantities  of  extractable
minerals.  The carrying  value of the mineral  reserves  will be amortized  upon
commencement of commercial production.

EXCESS OF COST OVER FAIR VALUE

    Total  acquisition  costs in excess of the fair  values  assigned to the net
assets  acquired are  amortized  over a 40 year period  using the straight  line
method. At December 31, 1999 and 1998, accumulated amortization of the excess of
cost over fair value was $6.4 million and $5.1 million, respectively.
<PAGE>

CAPITALIZATION OF INTEREST AND DEFERRED FINANCING COSTS

    Prior to the  commencement  of  operations,  interest is  capitalized on the
costs of the plants and geothermal resource  development to the extent incurred.
Capitalized  interest and other deferred charges are amortized over the lives of
the related assets.

    Deferred  financing  costs  are  amortized  over  the  term  of the  related
financing using the effective interest method.

INCOME TAXES

    The Guarantors are comprised  substantially  of partnership  interests.  The
income or loss of each  partnership  for  income  tax  purposes,  along with any
associated  tax  credits,  is the  responsibility  of the  individual  partners.
Accordingly,  no recognition  has been given to federal or state income taxes in
the accompanying combined financial statements.

STATEMENTS OF CASH FLOWS

     For purposes of the statements of cash flows, the Guarantors  consider only
demand deposits at banks to be cash.

FAIR VALUES OF FINANCIAL INSTRUMENTS

    Fair values of financial  instruments that are not actively traded are based
on market prices of similar instruments and/or valuation techniques using market
assumptions.  Unless  otherwise  noted,  the estimated fair value amounts do not
differ significantly from recorded values.

IMPAIRMENT OF LONG-LIVED ASSETS

   The Guarantors review long-lived assets and certain identifiable  intangibles
for impairments  whenever events or changes in  circumstances  indicate that the
carrying amount of an asset may not be recoverable.  An impairment loss would be
recognized,  based on discounted cash flows or various models, whenever evidence
exists that the carrying value is not recoverable.

USE OF ESTIMATES

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

Actual results could differ from those estimates.

ACCOUNTING PRONOUNCEMENTS

   In June 1998,  the FASB  issued  SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities",  which established accounting and reporting
standards for derivative  instruments  and for hedging  activities.  It requires
that an entity  recognize all derivatives as either assets or liabilities in the
statement of financial  position and measure  those  instruments  at fair value.
This  statement is effective for all fiscal  quarters of fiscal years  beginning
after June 15, 2000. The  Guarantors  have not yet determined the impact of this
accounting pronouncement.

<PAGE>

3.  PROPERTY, PLANT, CONTRACTS AND EQUIPMENT

    Property, plant, contracts and equipment consisted of the following:

                                                           December 31,
                                                     1999              1998
                                                   -------------  -------------
Plant and equipment                               $333,109           $331,230
Power sale agreements                               64,609             64,609
Mineral reserves                                    86,762             77,521
Wells and resource development                      43,584             43,549
                                                  --------       ------------
                                                   528,064            516,909
Less accumulated depreciation
    and amortization                               (60,786)           (45,874)
                                                  --------       ------------
                                                   467,278            471,035
Construction in progress:
Salton Sea V                                        85,625              9,258
                                                  --------       ------------
                                                  $552,903           $480,293
                                                   =======            =======

4. SENIOR SECURED PROJECT NOTE

     The  Guarantors   have  a  project  note  payable  to  Salton  Sea  Funding
Corporation  with  interest  rates  ranging from 6.69% to 7.84%.  They have also
guaranteed,  along  with  other  guarantors,  the  debt of  Salton  Sea  Funding
Corporation,  which  amounted  to $569.0  million  at  December  31,  1999.  The
guarantee issued is  collateralized by a lien on substantially all the assets of
and a pledge of the equity  interests in the Guarantors.  The structure has been
designed to cross  collateralize  cash flows from each  guarantor  without cross
collateralizing all of the guarantors' assets.

    On October 13, 1998, the Salton Sea Funding Corporation issued an additional
investment  grade offering for $285.0 million.  In connection with this offering
the Guarantors issued an additional  project note in the amount of $83.3 million
with an interest rate of 7.475% with a final maturity of November 30, 2018.

    Principal  maturities of the senior secured  project note are as follows (in
thousands):

                           2000                                $   9,737
                           2001                                   17,319
                           2002                                   20,487
                           2003                                   22,765
                           2004                                   24,409
                           Thereafter                            199,237
                                                            ------------
                                                                $293,954
                                                                 =======

     The estimated fair values of the senior secured  projects notes at December
31, 1999 and 1998 were $282.4 million and $323.1 million, respectively.

5.  RELATED PARTY TRANSACTIONS

    The Guarantors have entered into the following agreements:

o    Amended and Restated Easement Grant Deed and Agreement Regarding Rights for
     Geothermal  Development  dated  February 23, 1994, as amended,  whereby the
     Guarantors acquired from Magma Land I, a wholly-owned  subsidiary of Magma,
     rights  to  extract  geothermal  brine  from the  geothermal  lease  rights
     property  which is  necessary  to operate the Salton Sea Power  Generation,
     L.P.  facilities in return for 5% of all electricity  revenues  received by
     the Guarantors.  The amount expensed for the years ended December 31, 1999,
     1998  and  1997  was  $3.7   million,   $4.9  million  and  $4.9   million,
     respectively.
<PAGE>

o    Administrative  Services Agreement dated April 1, 1993 with Magma,  whereby
     Magma  will   provide  to  the   Guarantors,   excluding   Salton  Sea  IV,
     administrative and management services.  Fees payable to Magma amount to 3%
     of total  electricity  revenues.  The amount  expensed  for the years ended
     December 31, 1999,  1998 and 1997 was $1.5  million,  $2.3 million and $2.3
     million, respectively.

o   Operating  and  Maintenance  Agreement  dated  April 1, 1993 with  CalEnergy
    Operating  Corporation  ("CEOC"),  whereby  the  Guarantors  retain  CEOC to
    operate the Salton Sea facilities for a period of 32 years.  Payment is made
    to CEOC in the form of  reimbursements  of expenses  incurred.  During 1999,
    1998 and 1997, the Guarantors  reimbursed CEOC for expenses of $6.7 million,
    $6.3 million and $7.5 million, respectively.

6.   COMMITMENTS AND CONTINGENCIES

     Salton Sea Power LLC, a Salton Sea Guarantor, is constructing Salton Sea V.
Salton  Sea V  will  be a 49 net MW  geothermal  power  plant  which  will  sell
approximately  one-third  of its net output to the Zinc  Recovery  Project.  The
remainder will be sold through the California  Power Exchange ("PX") or in other
market transactions.

     Salton Sea V is being constructed pursuant to a date certain,  fixed price,
turn-key  engineering,  procurement and construction contract (the "Salton Sea V
EPC Contract") by Stone & Webster Engineering Corporation ("SWEC"). Salton Sea V
is scheduled to commence commercial  operation in mid-2000.  Total project costs
of Salton Sea V are  expected to be  approximately  $119.1  million.  Salton Sea
Power  LLC has  incurred  approximately  $85.6  million  of such  costs  through
December 31, 1999.

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

    We have audited the accompanying  combined balance sheets of the Partnership
Guarantors as of December 31, 1999 and 1998, and the related combined statements
of operations,  Guarantors' equity and cash flows for each of the three years in
the  period  ended  December  31,  1999.  These  financial  statements  are  the
responsibility of the Partnership Guarantors' management.  Our responsibility is
to express an opinion on these financial statements based on our audits.

    We conducted  our audits in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

    In our opinion,  such combined  financial  statements present fairly, in all
material respects,  the financial  position of the Partnership  Guarantors as of
December 31, 1999 and 1998 and the results of its  operations and its cash flows
for each of the three years in the period ended  December 31, 1999 in conformity
with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Omaha, Nebraska
January 25, 2000

<PAGE>

                             PARTNERSHIP GUARANTORS
                             COMBINED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

                                                            December 31,

                                                        1999             1998
ASSETS

Accounts receivable                                  $ 16,295          $ 33,404
Prepaid expenses and other assets                      18,959            23,088
                                                     --------          --------
Total current assets                                   35,254            56,492
                                                     --------          --------
Restricted cash                                        60,454           164,983
Property, plant, contracts and equipment, net         531,427           399,817
Management fee, net                                    71,489            71,596
Due from affiliates                                    75,274            83,373
Excess of fair value over net assets acquired, net    127,994           131,558
                                                   ----------       -----------
                                                     $901,892          $907,819
                                                      =======           =======
LIABILITIES AND GUARANTORS' EQUITY
Liabilities:

Accounts payable                                   $    3,925        $    1,879
Accrued liabilities                                    13,534            15,890
CURRENT PORTION OF LONG TERM DEBT                      10,562            32,364
                                                       ------            ------
Total current liabilities                              28,021            50,133

Senior secured project note                           250,650           261,212
Deferred income taxes                                  98,907            97,641
                                                   -----------       ----------
Total liabilities                                     377,578           408,986

Commitments and contingencies (Notes 4, 5 and 8)

Guarantors' equity:
Common stock                                                3                 3
Additional paid-in capital                            387,663           387,663
Retained earnings                                     136,648           111,167
                                                    -----------      ----------
Total Guarantors' equity                              524,314           498,833
                                                   ----------       -----------
                                                     $901,892          $907,819
                                                      =======           =======


The accompanying notes are an integral part of the combined financial statements

<PAGE>

                             PARTNERSHIP GUARANTORS
                        COMBINED STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)

                                                  Years Ended December 31,

                                               1999       1998        1997
Revenues:

Sales of electricity                        $105,921    $165,779    $158,125
Interest and other income                      9,067       6,786       4,190
                                           ---------    --------    --------
Total revenues                               114,988     172,565     162,315

Costs and expenses:

Operating, general and administrative costs   47,967      63,717      64,103
Depreciation and amortization                 22,566      48,615      38,771
Interest expense                              22,200      13,836      13,753
Less capitalized interest                    (15,773)    (10,266)     (9,323)
                                            -----------  --------  -----------
Total expenses                                76,960     115,902     107,304
                                           ---------    --------    --------
Income before income taxes                    38,028      56,663      55,011
Provision for income taxes                    12,547      19,529      21,374
                                           ---------    --------    --------
Net income                                  $ 25,481    $ 37,134    $ 33,637
                                             =======      ======      ======



The accompanying notes are an integral part of the combined financial statements

<PAGE>

                             PARTNERSHIP GUARANTORS
                    COMBINED STATEMENTS OF GUARANTORS' EQUITY
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999
                             (DOLLARS IN THOUSANDS)

                                               Additional
                               Common Stock     Paid-in   Retained      Total
                              Shares  Amount    Capital   Earnings     Equity
                             -------- --------- --------- ---------- -----------
Balance, January 1, 1997        3    $      3  $387,663  $ 40,396    $428,062

Net income                      -           -         -    33,637      33,637
                            -----    --------  --------  --------   ---------
Balance, December 31, 1997      3           3   387,663    74,033     461,699

Net income                      -           -         -    37,134      37,134
                            -----    --------  --------  --------   ---------
Balance, December 31, 1998      3           3   387,663   111,167     498,833

Net income                      -           -         -    25,481      25,481
                            -----    --------  --------  --------   ---------
Balance, December 31, 1999      3    $      3  $387,663  $136,648    $524,314
                            =====      ======   =======    ======     =======


The accompanying notes are an integral part of the combined financial statements

<PAGE>

                             PARTNERSHIP GUARANTORS
                        COMBINED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

                                                   Years Ended December 31,

                                                1999       1998        1997

Cash flows from operating activities:
 Net income                                     $25,481   $37,134     $ 33,637
 Adjustments to reconcile net income to net
  cash provided by operating activities:
  Depreciation and amortization                  22,566    48,615       38,771
  Deferred income taxes                           1,266    (9,210)      (1,426)
  Changes in assets and liabilities:
    Accounts receivable                          17,109    (9,923)        (715)
    Prepaid expenses and other assets             4,129    (9,967)       5,962
    Accounts payable and accrued liabilities       (310)   30,903          983

                                             ---------- ---------   ----------
Net cash flows from operating activities         70,241    87,552       77,212

                                             ---------- ---------   ----------
Cash flows from investing activities:

Capital expenditures                           (147,801)  (74,202)     (39,556)
Decrease (increase) in restricted cash          104,529  (164,983)           -
Management fee                                   (2,704)   (1,514)      (4,029)

                                             ---------- ---------   ----------
Net cash flows from investing activities        (45,976) (240,699)     (43,585)
                                             ---------- ---------   ----------
Cash flows from financing activities:

Repayments of senior secured project notes      (32,364)  (51,762)     (38,594)
Proceeds of offering from senior secured
  project notes                                     ---   201,728          ---

Decrease in amounts due from affiliates           8,099     3,181        4,967
                                             ---------- ---------      -------
Net cash flows from financing activities        (24,265)  153,147      (33,627)
                                              --------- ---------      -------
Net change in cash                                  ---       ---          ---
Cash at beginning of period                         ---       ---          ---

                                              --------- ---------      -------
Cash at the end of period                    $      --- $     --- $        ---
                                               ======== =========      =======
Supplemental disclosure:
Cash paid for interest                       $   21,715 $  13,361 $     13,165
                                               ========  ========      =======
  Income taxes paid                          $   11,281 $  28,739 $     22,800
                                               ========  ========      =======


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

<PAGE>

                             PARTNERSHIP GUARANTORS
                     NOTES TO COMBINED FINANCIAL STATEMENTS

1. ORGANIZATION AND OPERATIONS

  Partnership Guarantors (the "Guarantors") (not a legal entity) consists of the
combination of Vulcan Power Company  ("VPC"),  CalEnergy  Operating  Corporation
("CEOC"), both 99% owned by Magma Power Company ("Magma") and 1% owned by Salton
Sea Funding  Corporation (the "Funding  Corporation");  CE Turbo LLC, indirectly
wholly-owned by Magma; and CalEnergy  Minerals LLC, a Delaware limited liability
company ("Minerals LLC"), formerly indirectly owned by Magma and currently owned
indirectly by MidAmerican  Energy Holdings  Company  ("MidAmerican").  VPC's and
CEOC's principal assets are interests in certain  partnerships which are engaged
in  the  operation  of  geothermal  power  plants  in  the  Imperial  Valley  of
California.  The Guarantors have guaranteed the loans to such  partnerships from
Funding Corporation, an indirect wholly-owned subsidiary of Magma, which in turn
was wholly-owned by MidAmerican.

  On February 8, 1999,  MidAmerican created a new subsidiary,  CE Generation LLC
("CE  Generation") and subsequently  transferred its interest in the Company and
its power  generation  assets in the  Imperial  Valley  to CE  Generation,  with
Minerals, LLC and other assets being retained by MidAmerican.  On March 3, 1999,
MidAmerican  closed the sale of 50% of its ownership  interests in CE Generation
to El Paso Holding Company, an affiliate of El Paso Energy Corporation.

    VPC and its subsidiary  hold a 100% interest in Vulcan/BN  Geothermal  Power
Company, a Nevada general partnership,  and CEOC and its subsidiaries hold a 90%
general partner interest in Leathers,  L.P., a California  limited  partnership,
Del Ranch, L.P., a California limited  partnership and Elmore, L.P. a California
limited partnership (collectively, the "Partnerships"). Magma owns a 10% limited
partnership  interest in each of Leathers  L.P.,  Elmore L.P. and Del Ranch L.P.
and has entered into an agreement to pay to the Guarantors the  distributions it
receives  related to such 10% interests,  in addition to a special  distribution
equal to 4.5% of total energy sales from the Leathers Project.

    Turbo LLC is  constructing  the CE Turbo Project.  The CE Turbo Project will
have a capacity  of 10 net MW. The net  output of the CE Turbo  Project  will be
sold to the Zinc Recovery Project or sold through the California Power Exchange.

     Minerals LLC is constructing  the Zinc Recovery  Project which will recover
zinc from the geothermal brine (the "Zinc Recovery Project"). Facilities will be
installed near Imperial Valley Project sites to extract a zinc chloride solution
from the geothermal brine through an ion exchange process. This solution will be
transported  to a central  processing  plant  where zinc ingots will be produced
through  solvent  extraction,  electrowinning  and casting  processes.  The Zinc
Recovery Project is designed to have a capacity of  approximately  30,000 metric
tonnes per year and is scheduled to commence  commercial  operation in mid-2000.
In September 1999,  Minerals LLC entered into a sales agreement whereby all zinc
produced by the Zinc Recovery Project will be sold to Cominco,  Ltd. The initial
term of the agreement expires in December 2005.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

     The  accompanying  financial  statements  of  the  Guarantors  present  the
accounts of CEOC,  VPC, CE Turbo LLC and  Minerals  LLC and their  proportionate
share of the Partnerships in which they have an undivided interest in the assets
and  are  proportionately  liable  for  their  share  of  the  liabilities.  All
significant intercompany balances and transactions have been eliminated.

     The financial statements reflect the acquisition of Magma and the resulting
push  down  to  the  Guarantors  of  the  accounting  as  a  purchase   business
combination.
<PAGE>

REVENUE RECOGNITION

     The Guarantors  recognize  revenues and related  accounts  receivable  from
sales of electricity on an accrual basis using stated  contract  prices.  All of
the Guarantors  sales of electricity are to Southern  California  Edison Company
("Edison") and are under long-term power purchase contracts.

   The  Partnership  Projects sell all  electricity  generated by the respective
plants pursuant to four long-term power purchase  agreements ("SO4  Agreements")
between the  projects  and Edison.  These SO4  Agreements  provide for  capacity
payments, capacity bonus payments and energy payments. Edison makes fixed annual
capacity  payments  to the  projects,  and to the extent that  capacity  factors
exceed certain benchmarks is required to make capacity bonus payments. The price
for  capacity  and  capacity  bonus  payments  is fixed  for the life of the SO4
Agreements.  Energy is sold at increasing fixed rates for the first ten years of
each contract and thereafter at Edison's Avoided Cost of Energy.

   The fixed  energy price  periods of the  Partnership  Project SO4  Agreements
extended until February 1996 for Vulcan,  December 1998 for Hoch (Del Ranch) and
Elmore, and December 1999 for the Leathers  Partnership.  For 1999, Vulcan, Hoch
and Elmore are  receiving  Edison's  Avoided  Cost of Energy  pursuant  to their
respective SO4 Agreements.  The weighted average energy rate for the Partnership
Project was 6.49 cents per kWh in 1999.

  For the year ended December 31, 1999 and 1998,  Edison's  average Avoided Cost
of  Energy  was  3.1  cents  and 3.0  cents  per  kWh,  respectively,  which  is
substantially  below the contract  energy  prices  earned in 1999.  Estimates of
Edison's future Avoided Cost of Energy vary substantially from year to year. The
Guarantors  cannot  predict the likely  level of Avoided  Cost of Energy  prices
under the SO4 Agreements at the expiration of the scheduled payment periods. The
revenues  generated by each of the projects  operating under SO4 Agreements will
likely  decline  significantly  after the  expiration of the relevant  scheduled
payment periods.

   If Edison was unable to perform,  the  Guarantors  could incur an  accounting
loss equal to the entire accounts receivable balance.

RESTRICTED CASH

The restricted cash balance primarily  included  commercial paper,  money market
securities and mortgage backed  securities and was composed of amounts deposited
in  restricted   accounts  which  the  Guarantors   will  use  to  fund  capital
expenditures.

PROPERTY, PLANT, CONTRACTS AND EQUIPMENT

     Property,   plant,  contracts  and  equipment  are  carried  at  cost  less
accumulated  depreciation.  The Guarantors provide depreciation and amortization
of property,  plants,  contracts and equipment upon the  commencement of revenue
production over the estimated useful life of the assets.

    Depreciation  of the operating  power plant costs,  net of salvage value, is
computed on the straight line method over the estimated useful lives, between 10
and 30 years.  Depreciation of furniture,  fixtures and equipment is computed on
the straight line method over the estimated  useful lives of the related assets,
which range from three to ten years.

    Power sale agreements  have been assigned values  separately for each of (1)
the remaining  portion of the fixed price periods of the power sales  agreements
and (2) the 20 year avoided cost periods of the power sales  agreements  and are
amortized separately over such periods using the straight line method.

    The Salton Sea  reservoir  contains  commercial  quantities  of  extractable
minerals.  The carrying  value of the mineral  reserves  will be amortized  upon
commencement of commercial production.

    The process license represents the economic benefits expected to be realized
from the  installation  of the license and related  technology  at the  Imperial
Valley.  The  carrying  value of the  process  license  is  amortized  using the
straight line method over the remaining estimated useful life of the license.
<PAGE>

EXCESS OF COST OVER FAIR VALUE

    Total  acquisition  costs in excess of the fair  values  assigned to the net
assets  acquired are  amortized  over a 40 year period  using the straight  line
method. At December 31, 1999 and 1998 accumulated  amortization of the excess of
cost over fair value of net assets acquired was $17.5 million and $13.9 million,
respectively.

CAPITALIZATION OF INTEREST AND DEFERRED FINANCING COSTS

    Prior to the  commencement  of  operations,  interest is  capitalized on the
costs of the plants and geothermal resource  development to the extent incurred.
Capitalized  interest and other deferred charges are amortized over the lives of
the related assets.

    Deferred  financing  costs  are  amortized  over  the  term  of the  related
financing using the effective interest method.

INCOME TAXES

    The entities  comprising the Guarantors are included in consolidated  income
tax returns with their parent and affiliates; however, income taxes are provided
on a separate  return basis.  Tax obligations of the Guarantors will be remitted
to the  parent  only to the  extent  of cash  flows  available  after  operating
expenses and debt service.

MANAGEMENT FEE

    Pursuant to the Magma Services  Agreement,  Magma has agreed to pay CEOC all
equity cash flows and certain  royalties  payable by the  Guarantors in exchange
for providing  data and services to Magma.  As security for the  obligations  of
Magma under the Magma Services  Agreement,  Magma has  collaterally  assigned to
CEOC its rights to such equity cash flows and certain royalties.

STATEMENTS OF CASH FLOWS

    For purposes of the statement of cash flows,  the  Guarantors  consider only
demand deposits at banks to be cash.

FAIR VALUES OF FINANCIAL INSTRUMENTS

    Fair values of financial  instruments that are not actively traded are based
on market prices of similar instruments and/or valuation techniques using market
assumptions.  Unless  otherwise  noted,  the estimated fair value amounts do not
differ significantly from recorded values.

IMPAIRMENT OF LONG-LIVED ASSETS

   The Guarantors review long-lived assets and certain identifiable  intangibles
for impairment  whenever  events or changes in  circumstances  indicate that the
carrying amount of an asset may not be recoverable.  An impairment loss would be
recognized,  based on discounted cash flows or various models, whenever evidence
exists that the carrying value is not recoverable.

USE OF ESTIMATES

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

Actual results could differ from those estimates.
<PAGE>

ACCOUNTING PRONOUNCEMENTS

   In June 1998,  the FASB  issued  SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities",  which established accounting and reporting
standards for derivative  instruments  and for hedging  activities.  It requires
that an entity  recognize all derivatives as either assets or liabilities in the
statement of financial  position and measure  those  instruments  at fair value.
This  statement is effective for all fiscal  quarters of fiscal years  beginning
after June 15, 2000.  The  Guarantors  has not yet determined the impact of this
accounting pronouncement.

3. PROPERTY, PLANT, CONTRACTS AND EQUIPMENT

    Property,  plant,  contracts  and  equipment  consisted of the following (in
thousands):

                                                       December 31,

                                                1999                  1998

Plant and equipment                          $ 116,316              $ 92,920
Power sale agreements                          123,588               123,588
Process license                                 46,290                46,290
Mineral reserves                               156,563               140,790
Wells and resource development                  95,329                91,990
                                             ---------           -----------
                                               538,086               495,578
Less accumulated depreciation
    and amortization                          (140,224)             (121,980)
                                             ---------           -----------
                                               397,862               373,598
Construction in progress:
Zinc recovery project                           92,794                23,507
TURBO AND REGION 2 BRINE FACILITIES UPGRADE     40,771                 2,712
                                             ---------           -----------
                                              $531,427              $399,817
                                               =======               =======

4. SENIOR SECURED PROJECT NOTE

     The  Guarantors   have  a  project  note  payable  to  Salton  Sea  Funding
Corporation  with  interest  rates  ranging from 6.69% to 8.30%.  They have also
guaranteed,  along  with  other  guarantors,  the  debt of  Salton  Sea  Funding
Corporation,  which  amounted  to $569.0  million  at  December  31,  1999.  The
guarantee is collateralized by a lien on the available cash flow of and a pledge
of  stock  in  the  Guarantors.   The  structure  has  been  designed  to  cross
collateralize cash flows from each guarantor without cross  collateralizing  all
of the guarantors' assets.

     On October 13, 1998 the Salton Sea Funding Corporation issued an additional
investment grade offering for $285.0 million.  In connection with this offering,
the Guarantors issued an additional project note in the amount of $201.7 million
with an interest rate of 7.475% with a final maturity on November 30, 2018.
<PAGE>

Principal  maturities  of the senior  secured  project  note are as follows  (in
thousands):

                           2000           $ 10,562
                           2001              1,907
                           2002              4,625
                           2003              5,017
                           2004              5,771
                           Thereafter      233,330
                                          --------
                                          $261,212
                                           =======

     The estimated  fair values of the senior  secured  project note at December
31, 1999 and 1998 were $244.7 million and $299.7 million, respectively.

5. RELATED PARTY TRANSACTIONS

     The  Guarantors are party to a 30-year brine supply  agreement  through the
Vulcan/BN   Geothermal  Power  Company  partnership  and  a  technology  license
agreement for the rights to use the  technology  necessary for the  construction
and  operation  of the  Vulcan  Plant.  Under the brine  supply  agreement,  the
Guarantors will pay VPC 4.167% of the contract energy  component of the price of
electricity  provided by the Vulcan Plant. In addition,  VPC has been designated
as operator of the Vulcan Plant and receives  agreed-upon  compensation for such
services.

     Charges  to the  Guarantors  related  to the  brine  supply  agreement  and
operator's  fees  on a  pro  rata  basis  amounted  to  $423,000  and  $472,000,
respectively,  for the year ended  December  31, 1999,  $363,000  and  $416,000,
respectively,  for the year ended  December  31, 1998,  $403,000  and  $456,000,
respectively, for the year ended December 31, 1997, respectively.

     In addition, the Guarantors entered into the following agreements:

o   Easement   Grant  Deed  and  Agreement   Regarding   Rights  for  Geothermal
    Development,  whereby the  Guarantors  acquired from Magma rights to extract
    geothermal  brine  from  the  geothermal  lease  rights  property  which  is
    necessary to operate the Leathers, Del Ranch and Elmore Plants in return for
    17.333%, on a pro rata basis, of all energy revenues received by each plant.
    The  Guarantors'  share of amounts  expensed  under this agreement for 1999,
    1998  and  1997  were  $11.9  million,  $22.6  million  and  $21.1  million,
    respectively.

o   Ground  Leases  dated  March 15 and August 15,  1988 with Magma  whereby the
    Guarantors  lease  from  Magma  for 32  years  the  surface  of the  land as
    described  in the  Imperial  County  Assessor's  official  records.  Amounts
    expensed  under the ground  leases for 1999,  1998 and 1997 were $70,000 per
    year.

o   Administrative   Services  Agreements  whereby  CEOC  will  provide  to  the
    Partnerships administrative and management services for a period of 32 years
    through  2020.  Fees  payable to CEOC  amount to the  greater of 3% of total
    electricity  revenues or $60,000 per month. The minimum monthly payments for
    years  subsequent to 1989 are increased based on the consumer price index of
    the  Bureau of Labor  and  Statistics.  Amounts  expensed  related  to these
    agreements  for 1999,  1998 and 1997 amounted to $2.7 million,  $4.5 million
    and $4.3 million, respectively.

o   Operating and Maintenance  Agreements  whereby the Guarantors retain CEOC to
    operate the plants for a period of 32 years through 2020. Payment is made to
    CEOC in the form of  reimbursements  of expenses  incurred  and a guaranteed
    capacity  payment  ranging  from 10% to 25% of energy  revenues  over stated
    amounts.  The Guarantors in 1999, 1998 and 1997 reimbursed CEOC for expenses
    of $7.5 million, $8.9 million and $9.0 million,  respectively, and accrued a
    guaranteed  capacity payment of $3.3 million,  $4.7 million and $4.5 million
    at December 31, 1999, 1998 and 1997, respectively.

<PAGE>

6. CONDENSED FINANCIAL INFORMATION

Condensed  balance sheet information of the Guarantors' pro rata interest in the
respective  entities  as of  December  31,  1999  and  1998  is as  follows  (in
thousands):
<TABLE>
<CAPTION>
                                     Vulcan
                                      Power         CEOC        Elmore    Del Ranch     Leathers
                                   ---------     ---------    ---------- ------------  -----------
December 31, 1999 Assets:
<S>                               <C>        <C>            <C>         <C>          <C>
Restricted cash                   $        - $           -  $         - $          - $          -
Accounts receivable and
    other assets                           -        16,493        3,564        3,555       10,413
Due from affiliates                    1,522        32,417       26,109       30,180       27,581
Property, plant, contracts and
    equipment, net                       153        13,638       66,116       63,119       66,786
Management fee and
     goodwill, net                         -             -            -            -            -
Investments in
    partnerships                      88,121       292,784            -            -            -
                                    --------     ---------    ---------   ----------  -----------
                                     $89,796      $355,332      $95,789      $96,854     $104,780
                                      ======       =======       ======       ======       ======
Liabilities and Equity:
Accounts payable, accrued
    liabilities and deferred taxes $     291     $   7,658     $  1,504    $   1,435    $   1,699
Senior secured project note                -             -            -            -            -
                                    --------    ----------    ---------   ---------- ------------
Total liabilities                        291         7,658        1,504        1,435        1,699
Guarantors' equity                    89,505       347,674       94,285       95,419      103,081
                                    --------     ---------    ---------   ---------- ------------
                                     $89,796      $355,332      $95,789      $96,854     $104,780
                                      ======       =======       ======      =======       ======
</TABLE>


<PAGE>

6. CONDENSED FINANCIAL INFORMATION

Condensed  balance sheet information of the Guarantors' pro rata interest in the
respective  entities  as of  December  31,  1999  and  1998  is as  follows  (in
thousands):
<TABLE>
<CAPTION>

                                      Vulcan               Adjustments/     Combined
                                        BNG     Minerals   Eliminations       Total
                                   ---------  -----------  --------------------------
December 31, 1999 Assets:
<S>                              <C>              <C>          <C>          <C>
Restricted cash                  $         -      $ 44,092     $ 16,362     $ 60,454
Accounts receivable and
    other assets                       2,373                     (1,144)      35,254
Due from affiliates                   31,052         3,634      (77,221)      75,274
Property, plant, contracts and
    equipment, net                    56,360        92,794      172,461      531,427
Management fee and
     goodwill, net                         -             -      199,483      199,483
Investments in
    partnerships                           -             -     (380,905)           -
                                 -----------      --------     --------     --------
                                     $89,785      $140,520     $(70,964)    $901,892
                                      ======       =======      =======      =======
Liabilities and Equity:
Accounts payable, accrued
    liabilities and deferred taxes  $  1,664      $      -     $102,115     $116,366
Senior secured project note                -       140,520      120,692      261,212
                                 -----------      --------     --------     --------
Total liabilities                      1,664       140,520      222,807      377,578
Guarantors' equity                    88,121             -     (293,771)     524,314
                                 -----------      --------     --------     --------
                                     $89,785      $140,520     $(70,964)    $901,892
                                      ======       =======       ======       ======
</TABLE>

<PAGE>

6. CONDENSED FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>

                                      Vulcan
                                      Power          CEOC        Elmore      Del Ranch       Leathers
                                   ---------     ---------    ---------  -------------    -----------
December 31, 1998 Assets:
<S>                               <C>        <C>            <C>           <C>            <C>
Restricted cash                   $        - $           -  $         -   $          -   $          -
Accounts receivable and
    other assets                           -        15,695       12,648         12,655         12,571
Due from affiliates                      849        23,634       17,042         22,294          3,116
Property, plant, contracts and
    equipment, net                       179        17,326       64,680         59,194         69,084
Management fee and
     goodwill, net                         -             -            -              -              -
Investments in
    partnerships                      82,028       268,449            -              -              -
                                    --------     ---------    ---------     ----------    -----------
                                     $83,056      $325,104      $94,370        $94,143        $84,771
                                      ======       =======       ======         ======         ======
Liabilities and Equity:
Accounts payable, accrued
    liabilities and deferred taxes$       51     $   7,869     $  1,229      $   2,109      $   1,497
Senior secured project note                -             -            -              -              -
                                    --------    ----------    ---------     ----------   ------------
Total liabilities                         51         7,869        1,229          2,109          1,497
Guarantors' equity                    83,005       317,235       93,141         92,034         83,274
                                    --------     ---------    ---------     ----------   ------------
                                     $83,056      $325,104      $94,370        $94,143        $84,771
                                      ======       =======       ======        =======         ======
</TABLE>


<PAGE>

6. CONDENSED FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>

                                      Vulcan               Adjustments/       Combined
                                        BNG       Minerals Eliminations       Total
                                   ---------   -------------------------- ------------
December 31, 1998 Assets:
<S>                              <C>              <C>          <C>            <C>
Restricted cash                  $         -      $100,164     $ 64,819       $164,983
Accounts receivable and
    other assets                       3,356             -         (433)        56,492
Due from affiliates                   22,934        16,849      (23,345)        83,373
Property, plant, contracts and
    equipment, net                    57,320        23,507      108,527        399,817
Management fee and

     goodwill, net                         -             -      203,154        203,154
Investments in

    partnerships                           -             -     (350,477)             -
                                 -----------      --------     --------       --------
                                     $83,610      $140,520      $ 2,245       $907,819
                                      ======       =======      =======        =======
Liabilities and Equity:
Accounts payable, accrued

    liabilities and deferred taxes  $  1,582      $      -     $101,073       $115,410
Senior secured project note                -       140,520      153,056        293,576
                                 -----------      --------     --------       --------
Total liabilities                      1,582       140,520      254,129        408,986
Guarantors' equity                    82,028             -     (251,884)       498,833
                                 -----------      --------     --------       --------
                                     $83,610      $140,520      $ 2,245       $907,819
                                      ======       =======       ======         ======
</TABLE>

<PAGE>

6. CONDENSED FINANCIAL INFORMATION  (CONTINUED)

Condensed  combining  statements  of  operations  including  information  of the
Guarantors'  pro rata  interest in the  respective  entities for the years ended
December 31, 1999, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
                                        Vulcan
                                        Power           CEOC        Elmore         Del Ranch        Leathers
                                     ---------      ---------    ---------     -------------     -----------
December 31, 1999
<S>                                 <C>            <C>          <C>               <C>             <C>

Revenues                             $     892         $6,104      $16,908           $17,299         $56,127
Expenses                                   485              -       15,764            13,914          36,320
                                    ----------     ----------   ----------        ----------      ----------
Net income                           $     407         $6,104       $1,144            $3,385         $19,807
                                        ======         ======       ======            ======          ======
December 31, 1998

Revenues                             $     772        $47,009      $49,212           $52,241         $50,436
Expenses                                   383              -       38,583            37,998          38,166
                                    ----------     ----------   ----------        ----------      ----------
Net income                           $     389        $47,009      $10,629           $14,243         $12,270
                                        ======         ======       ======            ======          ======
December 31, 1997

Revenues                             $     859        $45,533      $48,114           $47,068         $47,899
Expenses                                   436              -       35,484            33,139          38,209
                                    ----------     ----------   ----------        ----------      ----------
Net income                           $     423        $45,533      $12,630           $13,929         $ 9,690
                                        ======         ======       ======            ======          ======
</TABLE>


<PAGE>

6. CONDENSED FINANCIAL INFORMATION  (CONTINUED)

Condensed  combining  statements  of  operations  including  information  of the
Guarantors'  pro rata  interest in the  respective  entities for the years ended
December 31, 1999, 1998 and 1997 is as follows:

                                        Vulcan   Adjustments/     Combined
                                          BNG    Eliminations     Total

                                     ------------------------ ------------
December 31, 1999

Revenues                               $15,756        $1,902      $114,988
Expenses                                 9,663        13,361        89,507
                                    ----------   ------------  -----------
Net income                            $  6,093      $(11,459)      $25,481
                                        ======        =======       ======
December 31, 1998

Revenues                               $14,608      $(41,713)     $172,565
Expenses                                 9,458       10,843        135,431
                                    ----------   ------------  -----------
Net income                            $  5,150      $(52,556)      $37,134
                                        ======        =======       ======
December 31, 1997

Revenues                               $15,208      $(42,366)     $162,315
Expenses                                 8,903       12,507        128,678
                                    ----------   ------------  -----------
Net income                            $  6,305      $(54,873)      $33,637
                                        ======        =======       ======


<PAGE>

7. INCOME TAXES

The provision for income taxes for the years ended  December 31, 1999,  1998 and
1997 consisted of the following (in thousands):

1999            Current          Deferred          Total
- ------------  ---------        ----------       ----------
Federal        $  8,527           $   991         $  9,518
State             2,754               275            3,029
              ---------         ---------       ----------
Total           $11,281            $1,266          $12,547
                  =====             =====           ======
1998

- ------------
Federal         $22,021           $(7,212)         $14,809
State             6,718            (1,998)           4,720
              ---------         ---------       ----------
Total           $28,739           $(9,210)         $19,529
                  =====             =====           ======
1997

- ------------
Federal         $17,563           $(1,222)         $16,341
State             5,237              (204)           5,033
              ---------         ---------       ----------
Total           $22,800           $(1,426)         $21,374
                  =====             =====           ======

     Deferred  tax  liabilities  at  December  31,  1999 and 1998  consisted  of
differences   between  book  and  tax  methods   relating  to  depreciation  and
amortization.

    The  effective  tax rate  differs  from the federal  statutory  tax rate due
primarily  to  percentage  depletion  in excess of cost  depletion  and goodwill
amortization.

8. COMMITMENTS AND CONTINGENCIES

     CalEnergy Minerals LLC, a Partnership Guarantor ("Minerals LLC"), developed
and owns the rights to  proprietary  processes  for the  extraction of zinc from
elements  in  solution  in the  geothermal  brine  and  fluids  utilized  at the
Company's  Imperial  Valley plants (the "Zinc Recovery  Project") as well as the
production  of power to be used in the  extraction  process.  A pilot  plant has
successfully  produced  commercial quality zinc at the company's Imperial Valley
Project.  The Company's affilates intend to sequentially  develop facilities for
the  extraction of  manganese,  silver,  gold,  lead,  boron,  lithium and other
products  as it  further  develops  the  extraction  technology.  The  Company's
affiliates are also  investigating  producing  silica as an extraction  project.
Silica  is used as a filler  for  such  products  as  paint,  plastics  and high
temperature cement.

     Minerals LLC is constructing  the Zinc Recovery  Project which will recover
zinc from the geothermal brine (the "Zinc Recovery Project"). Facilities will be
installed  near the Imperial  Valley  Project  sites to extract a zinc  chloride
solution  from the  geothermal  brine  through  an ion  exchange  process.  This
solution will be  transported  to a central  processing  plant where zinc ingots
will  be  produced  through  solvent  extraction,   electrowinning  and  casting
processes.  The  Zinc  Recovery  Project  is  designed  to  have a  capacity  of
approximately  30,000  metric  tonnes  per year  and is  scheduled  to  commence
commercial operation in mid-2000. In September 1999, Minerals LLC entered into a
sales agreement  whereby all zinc produced by the Zinc Recovery  Project will be
sold to Cominco,  Ltd.  The initial  term of the  agreement  expires in December
2005.

     The Zinc  Recovery  Project is being  constructed  by  Kvaerner  U.S.  Inc.
("Kvaerner")  pursuant  to a date  certain,  fixed-price,  turnkey  engineering,
procurement  and   construction   contract  (the  "Zinc  Recovery   Project  EPC
Contract").  Kvaerner is a wholly-owned  indirect subsidiary of Kvaerner ASA, an
internationally  recognized engineering and construction firm experienced in the
metals,  mining  and  processing  industries.  Total  project  costs of the Zinc
Recovery Project are expected to be approximately $200.9 million.
<PAGE>

The Company has incurred $92.8 million of such costs through December 31, 1999.

     CE  Turbo  LLC,  a  Partnership  Guarantor,  is  constructing  the CE Turbo
Project.  The CE Turbo Project will have a capacity of 10 net MW. The net output
of the CE  Turbo  Project  will be sold to the  Zinc  Recovery  Project  or sold
through the California Power Exchange ("PX") or in other market transactions.

     The  Partnership  Projects are upgrading the  geothermal  brine  processing
facilities  at the  Vulcan  and Del  Ranch  Projects  with  the  Region  2 Brine
Facilities  Construction.  In  addition  to  incorporating  the pH  modification
process,  which has reduced operating costs at the Salton Sea Projects, the new,
more  efficient   facilities  will  achieve  economies  through  improved  brine
processing systems and the utilization of more modern equipment. The Partnership
Projects expect these improvements to reduce  brine-handling  operating costs at
the Vulcan Project and the Del Ranch Project.

   The CE Turbo Project and the Region 2 Brine Facilities Construction are being
constructed by Stone & Webster  Engineering  Corporation  ("SWEC") pursuant to a
date certain,  fixed price,  turnkey  engineering,  procurement and construction
contract  (the "Region 2 Upgrade EPC  Contract").  The  obligations  of SWEC are
guaranteed by Stone & Webster,  Incorporated.  The CE Turbo Project is scheduled
to commence  initial  operations in early 2000 and the Region 2 Brine Facilities
Construction is scheduled to be completed in early-2000. Total project costs for
both the CE Turbo  Project and the Region 2 Brine  Facilities  Construction  are
expected  to  be   approximately   $63.7  million.   The  Company  has  incurred
approximately $40.8 million of such costs through December 31, 1999.

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholder
Magma Power Company
Omaha, Nebraska

     We have audited the  accompanying  balance sheets of the Salton Sea Royalty
LLC as of December 31, 1999 and 1998 and the related  statements of  operations,
equity and cash flows for each of the three years in the period  ended  December
31, 1999.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  such financial  statements present fairly, in all material
respects,  the  financial  position of the Salton Sea Royalty LLC as of December
31, 1999 and 1998 and the results of its  operations and its cash flows for each
of the three years in the period  ended  December  31, 1999 in  conformity  with
generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Omaha, Nebraska
January 25, 2000

<PAGE>

                             SALTON SEA ROYALTY LLC
                                 BALANCE SHEETS
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                                 December 31,
                                                              1999        1998
ASSETS

Prepaid expenses and other assets                          $    235   $     513
                                                           --------   ---------
Total current assets                                            235         513

Royalty stream, net                                          16,776      22,932
Excess of cost over fair value of net assets acquired, net   32,280      33,188
Due from affiliates                                          21,825      20,799
                                                           --------    --------
                                                            $71,116     $77,432
                                                            =======     =======

LIABILITIES AND EQUITY
Liabilities:

Accrued liabilities                                              82    $  9,455
CURRENT PORTION OF LONG TERM DEBT                             4,773       9,396
                                                            -------    ---------
Total current liabilities                                     4,855      18,851

Senior secured project note                                   9,041      13,814
Deferred income taxes                                           ---       6,769
                                                           --------  ----------
    Total liabilities                                        13,896      39,434

Commitments and contingencies (Note 3)

Equity:

Common stock, par value $.01 per share; 100 shares

    authorized, issued and outstanding                            -          -
Additional paid-in capital                                    1,561       1,561
Retained earnings                                            55,659      36,437
                                                           --------  ----------
    Total equity                                             57,220      37,998
                                                           --------  ----------
                                                           $ 71,116    $ 77,432
                                                            =======     =======


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

<PAGE>

                             SALTON SEA ROYALTY LLC
                            STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)


                                                   1999       1998       1997
Revenues:
Royalty income                                   $26,274    $51,703   $32,231

Expenses:
Operating, general and administrative expenses     4,610      8,120     7,769
Amortization of royalty stream and goodwill        7,064      9,794     9,794
Interest expense                                   1,682      2,784     4,179
                                               ---------  --------- ---------
Total expenses                                    13,356     20,698    21,742
                                               ---------  --------- ---------
Income before income taxes                        12,918     31,005    10,489
Provision (benefit) for income taxes              (6,304)    11,508     1,828
                                               ---------  --------- ---------
Net income                                      $ 19,222    $19,497   $ 8,661
                                                 =======    =======   =======


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

<PAGE>

                             SALTON SEA ROYALTY LLC
                              STATEMENTS OF EQUITY
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                        Additional
                                                   Common Stock           Paid-in         Retained
                                              Shares         Amount       Capital         Earnings        Total
                                          ----------    -----------    -----------     ------------    -----------
<S>                                         <C>       <C>              <C>               <C>            <C>

Balance, January 1, 1997                         100  $           -        $ 1,561          $ 8,279        $ 9,840

Net income                                         -              -              -            8,661          8,661
                                            --------    -----------    -----------       ----------     ----------
Balance, December 31, 1997                       100              -          1,561           16,940         18,501

Net income                                         -              -              -           19,497         19,497
                                            --------    -----------    -----------       ----------     ----------
Balance, December 31, 1998                       100              -          1,561           36,437         37,998

Net income                                         -              -              -           19,222         19,222
                                            --------    -----------    -----------       ----------     ----------
Balance, December 31, 1999                       100    $           -      $ 1,561          $55,659        $57,220
                                               =====        =======        =======           ======         ======
</TABLE>


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

<PAGE>

                             SALTON SEA ROYALTY LLC
                            STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                     Year End December 31,

                                                                               1999         1998            1997
Cash flow from operating activities:
<S>                                                                       <C>            <C>          <C>
Net income                                                                 $  19,222       $ 19,497      $ 8,661
Adjustments to reconcile net income to net cash provided by
  operating activities:

     Amortization of royalty stream and goodwill                               7,064          9,794        9,794
     Deferred income taxes                                                    (6,769)          (499)      (4,959)
     Changes in assets and liabilities:

     Prepaid expenses and other assets                                           278            468        4,376
     Accrued liabilities                                                      (9,373)        18,280        9,236
                                                                          ----------     ----------   ----------
Net cash flows from operating activities                                      10,422         47,540       27,108
                                                                          ----------     ----------   ----------
Net cash flows from financing activities:

Decrease (increase) in due from affiliates                                    (1,026)       (31,814)      (9,106)
Repayment of senior secured project note                                      (9,396)       (15,726)     (18,002)
                                                                          ----------     ----------   ----------
Net cash flows from financing activities                                     (10,422)       (47,540)     (27,108)
                                                                          ----------     ----------   ----------
Net change in cash                                                                 -              -           -
Cash at beginning of period                                                        -              -           -
                                                                          ----------     ----------   ----------
Cash at end of period                                                     $        -     $        -   $       -
                                                                              ======         ======       ======
Supplemental disclosure:
  Interest paid                                                           $              $            $
                                                                              ======         ======       ======
  Income taxes paid                                                       $      465     $   12,007   $    6,787
</TABLE>

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

<PAGE>

                             SALTON SEA ROYALTY LLC
                          NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION

     Salton Sea Royalty LLC (the "Royalty Company") is a special-purpose entity,
99% owned by Magma Power  Company  ("Magma")  and 1% owned by Salton Sea Funding
Corporation (the "Funding Corporation").  Magma was a wholly-owned subsidiary of
MidAmerican Energy Holdings Company ("MidAmerican").

     On February 8, 1999,  MidAmerican  created a new subsidiary,  CE Generation
LLC ("CE  Generation") and subsequently  transferred its interest in the Company
and its power  generation  assets in the Imperial Valley to CE Generation,  with
certain  assets being  retained by  MidAmerican.  On March 3, 1999,  MidAmerican
closed the sale of 50% of its  ownership  interests in CE  Generation to El Paso
Power Holding Company, an affiliate of El Paso Energy Corporation.

   In June 1995,  the Royalty  Company  received an  assignment of royalties and
certain fees paid by three partnership projects,  Del Ranch, Elmore and Leathers
(collectively,  the  "Partnership  Projects").  On April 17,  1996,  MidAmerican
acquired the remaining 50% interest in the Partnership  Projects.  Prior to this
transaction,  Magma and its  affiliates  had a 50%  interest in the  Partnership
Projects. In addition, the Royalty Company has received an assignment of certain
resource-related  and contract  assignment  payments  payable by the  geothermal
power  plant  located  in  Imperial  Valley,  California  which  is  owned by an
unaffiliated third party (East Mesa, together with the Partnership Projects, the
"Projects").  All of the  Projects are engaged in the  operation  of  geothermal
power plants in the Imperial Valley in Southern California. Substantially all of
the assigned royalties are based on a percentage of energy and capacity revenues
of the Projects.  Included in royalty income are payments from East Mesa related
to a settlement agreement in 1998 for prior years.

  All of the Projects have executed  long-term power purchase  agreements  ("SO4
Agreements")  providing  for capacity  and energy  sales to Southern  California
Edison Company  ("Edison").  Each of these  agreements  provides for fixed price
capacity  payments for the life of the contract.  In 1998, the East Mesa Project
entered into a Termination Agreement, to which Magma consented, which terminated
its SO4 Agreement upon CPUC approval becoming final in 1999.

  The  Partnership  Projects earn energy payments based on kilowatt hours (kWhs)
of energy  provided to Edison.  During the first 10 years of the agreement,  the
Projects earn payments for energy as scheduled in the SO4 Agreements.  After the
10-year  scheduled  payment  period has expired  (1998 for Del Ranch and Elmore;
1999 for  Leathers),  the energy payment per kWh throughout the remainder of the
contract period will be at Edison's Avoided Cost of Energy.

  For the year ended December 31, 1999 and 1998,  Edison's  average Avoided Cost
of  Energy  was  3.1  cents  and 3.0  cents  per  kWh,  respectively,  which  is
substantially  below the contract  energy  prices  earned in 1999.  Estimates of
Edison's future Avoided Cost of Energy vary substantially from year to year. The
Royalty Company cannot predict the likely level of Avoided Cost of Energy prices
under the SO4 Agreements at the expiration of the scheduled payment periods. The
revenues  generated by each of the units  operating  under SO4  Agreements  will
likely  decline  significantly  after the  expiration of the relevant  scheduled
payment period which would have a direct effect on the related royalty streams.

  As discussed above, all revenues except those derived from East Mesa are from,
and all operating expenses are paid by, related parties.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

  The accompanying  statement of operations presents revenues and expenses which
have been assigned to the Royalty Company under the arrangements described above
on the  accrual  method of  accounting.  This  presentation  is a "carve out" of
information  from Magma and certain of its  affiliates.  Such  revenues,  net of
related expenses,  guarantee loans from the Funding Corporation,  a wholly-owned
subsidiary of Magma.
<PAGE>

  The financial  statements  reflect the  acquisition of Magma and the resulting
push down to the  Royalty  Company  of the  accounting  as a  purchase  business
combination.

ROYALTY STREAM

  The Royalty Company's policy is to provide amortization expense beginning upon
the commencement of revenue production over the estimated  remaining useful life
of the identifiable assets.

  The royalty streams have been assigned  values  separately for each of (1) the
remaining  portion of the fixed  price  periods  of the  Projects'  power  sales
agreements and (2) the 20 year avoided cost periods of the Projects' power sales
agreements  and are  amortized  separately  over such periods using the straight
line method. At December 31, 1999 and 1998,  accumulated  amortization was $43.7
million and $37.6 million, respectively.

EXCESS OF COST OVER FAIR VALUE

  Total  acquisition  costs in excess  of the fair  values  assigned  to the net
assets  acquired are  amortized  over a 40 year period  using the straight  line
method. At December 31, 1999 and 1998, accumulated amortization of the excess of
cost over fair value was $4.5 million and $3.6 million, respectively.

INCOME TAXES

   The Royalty Company is included in  consolidated  income tax returns with its
parent and  affiliates.  Income taxes are provided on a separate  return  basis,
however,  tax  obligations of the Royalty Company will be remitted to the parent
only to the extent of cash flows  available  after  operating  expenses and debt
service.  On February 19, 1999,  the Royalty  Company was converted to a limited
liability company which is not taxed. Therefore, since that date, no recognition
has been given to federal or state income taxes as that is the responsibility of
the individual members of the LLC.

FAIR VALUES OF FINANCIAL INSTRUMENTS

  Fair values of financial instruments that are not actively traded are based on
market prices of similar  instruments  and/or valuation  techniques using market
assumptions.  Unless  otherwise  noted,  the estimated fair value amounts do not
differ significantly from recorded values.

IMPAIRMENT OF LONG-LIVED ASSETS

   The  Royalty  Company  reviews  long-lived  assets and  certain  identifiable
intangibles for impairment whenever events or changes in circumstances  indicate
that the carrying amount of an asset may not be recoverable.  An impairment loss
would be recognized,  based on discounted cash flows or various models, whenever
evidence exists that the carrying value is not recoverable.

ACCOUNTING PRONOUNCEMENTS

   In June 1998,  the FASB  issued  SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities",  which established accounting and reporting
standards for derivative  instruments  and for hedging  activities.  It requires
that an entity  recognize all derivatives as either assets or liabilities in the
statement of financial  position and measure  those  instruments  at fair value.
This  statement is effective for all fiscal  quarters of fiscal years  beginning
after June 15,  2000.  The  Company  has not yet  determined  the impact of this
accounting pronouncement.

USE OF ESTIMATES
<PAGE>

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

Actual results could differ from those estimates.

3. SENIOR SECURED PROJECT NOTE

    The  Royalty  Company  has a project  note  payable  to Salton  Sea  Funding
Corporation  at  interest  rates  ranging  from  6.69% to 7.37%.  They have also
guaranteed,  along  with  other  guarantors,  the  debt of  Salton  Sea  Funding
Corporation,  which  amounted  to $569.0  million  at  December  31,  1999.  The
guarantee issued is  collateralized by a lien on substantially all the assets of
and a pledge of stock in the Guarantor. The structure has been designed to cross
collateralize cash flows from each guarantor without cross  collateralizing  all
of the guarantors' assets.

Principal  maturities  of the senior  secured  project  note are as follows  (in
thousands):

                  2000                   $ 4,773
                  2001                     4,434
                  2002                     3,460
                  2003                       304
                  2004                       408
                  Thereafter                 435
                                      ----------
                                         $13,814
                                          ======

     The estimated  fair values of the senior  secured  project note at December
31, 1999 and 1998 were $13.5 million and $23.5 million, respectively.

4.  INCOME TAXES

    The  provision for income taxes for the year ended  December 31, 1999,  1998
and 1997, consisted of the following:

                  Current          Deferred            Total
                ---------       -----------          --------
1999

Federal            $   363          $(5,921)          $(5,558)
State                  102             (848)             (746)
                 ---------      -----------          --------
Total              $   465          $(6,769)          $(6,304)
                     =====           ======             =====
1998

Federal            $ 9,267          $  (294)          $ 8,973
State                2,740             (205)            2,535
                 ---------      -----------          --------
Total              $12,007          $  (499)          $11,508
                     =====           ======             =====
1997

Federal             $5,292          $(4,159)           $1,133
State                1,495             (800)              695
                 ---------      -----------          --------
Total               $6,787          $(4,959)           $1,828
                     =====           ======             =====

    The Royalty Company's  effective tax rate differs from the statutory federal
income  tax rate  due  primarily  to  percentage  depletion  in  excess  of cost
depletion and goodwill amortization.
<PAGE>

    Deferred tax liabilities (assets) at December 31, 1999 and 1998 consisted of
the following:

                                          1999                    1998
                                      -----------               ----------
Deferred liabilities:

Depreciation and amortization       $      ---                  $9,368
Deferred assets:
Deferred income                            ---                  (2,599)
                                   -----------             -----------
Net deferred tax liability          $      ---                  $6,769
                                        ======                  ======



<PAGE>

     ITEM 9. CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     Not applicable.

<PAGE>

                                    PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Set  forth  below  are  the  current  executive  officers  of  the  Funding
Corporation and the Guarantors and their positions with the Funding  Corporation
and each of the Guarantors (or general partner thereof):

     EXECUTIVE OFFICER          POSITION

     Gregory E. Abel*           Director
     Robert S. Silberman*       President and Chief Operating Officer
     Brian K. Hankel            Vice President and Treasurer
     Joseph M. Lillo            Vice President and Controller
     Douglas L. Anderson        Director, Vice President, and General Counsel
     Patrick J. Goodman         Director
     Larry Kellerman*           Director
     John L. Harrison*          Director


     * Gregory E. Abel is  Director  of  CalEnergy  Minerals  LLC and Salton Sea
Minerals Corp.  only.
     * Robert S.  Silberman,  in  addition  to  President  and  Chief  Operating
Officer, is Director of CalEnergy Minerals LLC and Salton Sea Minerals Corp.
     * Larry  Kellerman is Director for all entities except  CalEnergy  Minerals
LLC and Salton Sea Minerals Corp.
     * John L. Harrison is Director for all entities except  CalEnergy  Minerals
LLC and Salton Sea Minerals Corp.

     GREGORY E. ABEL,  37,  Director for  CalEnergy  Minerals LLC and Salton Sea
Minerals  Corp.  only.  Mr.  Abel  joined  MidAmerican  in 1992.  Mr.  Abel is a
Chartered  Accountant and from 1984 to 1992 he was employed by Price Waterhouse.
As a Manager in the San Francisco office of Price Waterhouse, he was responsible
for clients in the energy industry.

         ROBERT S. SILBERMAN,  42, President and Chief Operating Officer of each
Guarantor subsidiary except CalEnergy Minerals LLC and Salton Sea Minerals Corp.
where he is also Director.  Mr. Silberman  joined  MidAmerican in 1995. Prior to
that,  Mr.  Silberman  served as  Executive  Assistant to the Chairman and Chief
Executive Officer of International  Paper Company from 1993 to 1995, as Director
of Project Finance and  Implementation  for the Ogden  Corporation  from 1986 to
1989 and as Project Manager in Business Development for Allied-Signal, Inc. from
1984 to 1985. He has also served as the Assistant  Secretary of the Army for the
United States Department of Defense.

     BRIAN K.  HANKEL,  37,  Vice  President  and  Treasurer  of each  Guarantor
subsidiary.  Mr. Hankel joined  MidAmerican in February 1992 as Treasury Analyst
and served in that position to December 1995. Mr. Hankel was appointed Assistant
Treasurer in January 1996 and was appointed  Treasurer in January 1997. Prior to
that, Mr. Hankel was a Money  Position  Analyst at FirsTier Bank of Lincoln from
1988 to 1992 and Senior Credit Analyst at FirsTier from 1987 to 1988.

   JOSEPH M.  LILLO,  30,  Vice  President  and  Controller.  Mr.  Lillo  joined
MidAmerican in November  1996, and served as Manager of Financial  Reporting and
was  promoted  to  Controller/IPP  in March  1998.  Mr  Lillo  was  promoted  to
Controller  in July 1999.  Prior to joining the Company,  Mr. Lillo was a senior
associate with Coopers & Lybrand LLP.

     DOUGLAS L. ANDERSON,  42,  Director,  Vice President and General Counsel of
each Guarantor  subsidiary.  Mr. Anderson  joined  MidAmerican in February 1993.
From 1990 to 1993, Mr.  Anderson was a business  attorney with Fraser,  Stryker,
Vaughn,  Meusey, Olson, Boyer & Cloch, P.C. in Omaha. Prior to that Mr. Anderson
was a principal in the firm Anderson & Anderson.
<PAGE>

     PATRICK J. GOODMAN,  33, Director.  Mr. Goodman joined  MidAmerican in June
1995, and served as Manager of  Consolidation  Accounting  until  September 1996
when he was promoted to Controller.  Prior to joining  MidAmerican,  Mr. Goodman
was a financial manager for National Indemnity Company and a senior associate at
Coopers & Lybrand.

     LARRY  KELLERMAN,  44,  President of El Paso Power  Services  Company and a
Director of each Guarantor  subsidiary except CalEnergy  Minerals LLC and Salton
Sea Minerals Corp. Mr.  Kellerman  joined El Paso Energy in February 1998. Prior
to  joining  El Paso  Energy,  he was  President  of  Citizens  Power,  where he
initiated  Citizens'  activities  in the  power  marketing  field in 1988,  when
Citizens was the initial power marketer  granted FERC  authorization.  From 1982
through 1988,  Mr.  Kellerman was General  Manager of Power  Marketing and Power
Supply for Portland General Electric.  From 1979 through 1982, Mr. Kellerman was
Financial Analyst and Power Contract Negotiator with Southern California Edison,
where he negotiated  some of the first Public  Utility  Regulatory  Policies Act
qualifying facility contracts in the nation.

     JOHN L. HARRISON,  41, Senior Managing Director and Chief Financial Officer
of El Paso Merchant  Energy and a Director of each Guarantor  subsidiary  except
CalEnergy Minerals LLC and Salton Sea Minerals Corp. Mr. Harrison joined El Paso
Energy in June 1996. Prior to joining El Paso Energy, Mr. Harrison was a partner
with Coopers & Lybrand LLP for five years.

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

     The Funding  Corporation's  and the  Guarantors'  directors  and  executive
officers receive no remuneration for serving in such capacities.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

DESCRIPTION OF CAPITAL STOCK

     As of  December  31,  1999,  the  authorized  capital  stock of the Funding
Corporation  consisted of 1,000 shares of common stock, par value $.01 per share
(the "Common Stock"),  of which 100 shares were outstanding.  There is no public
trading  market for the Common  Stock.  As of December 31,  1999,  there was one
holder of record of the Common  Stock.  Holders of Common  Stock are entitled to
one vote per share on any matter coming before the stockholders for a vote.

     The Funding  Corporation  does not expect in the foreseeable  future to pay
any dividends on the Common Stock. The Indenture  contains certain  restrictions
on the payment of dividends with respect to the Common Stock.

PRINCIPAL HOLDERS

     Since the  formation of the Funding  Corporation  in June 1995,  all of the
outstanding  shares of Common Stock have been owned by Magma.  Magma directly or
indirectly  owns all of the capital  stock of or  partnership  interests  in the
Funding Corporation and the Guarantors.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

OTHER RELATIONSHIPS AND RELATED TRANSACTIONS

     The Salton Sea Projects' and the  Partnership  Projects'  geothermal  power
plants are owned,  administered  and operated by Magma or subsidiaries of Magma.
Geothermal  fluid  supplying  these  facilities  is provided  from Magma's (or a
subsidiary's) geothermal resource holdings in the SSKGRA.

     In providing  rights to  geothermal  resources  and/or  geothermal  fluids,
administering and operating the geothermal power plants, and disposing of solids
from these  facilities,  Magma  (directly  and  through  subsidiaries)  receives
certain royalties,  cost reimbursements and fees for its services and the rights
it provides. See the financial statements attached hereto.

     The Funding Corporation believes that the transactions with related parties
described  above,  taking into  consideration  all of the  respective  terms and
conditions  of each of the relevant  contracts and  agreements,  are at least as
favorable  to the  Guarantors  as those  which  could  have been  obtained  from
unrelated parties in arms' length negotiations.

RELATIONSHIP  OF THE FUNDING  CORPORATION  AND THE  GUARANTORS TO MAGMA AND
MIDAMERICAN

     The  Funding  Corporation  is a wholly  owned  direct  subsidiary  of Magma
organized  for the sole  purpose  of acting as  issuer  of the  Securities.  The
Funding  Corporation is restricted,  pursuant to the terms of the Indenture,  to
acting as issuer of the Securities and other indebtedness as permitted under the
Indenture, making loans to the Guarantors pursuant to the Credit Agreements, and
transactions related thereto. The Funding Corporation and each of the Guarantors
(and, in the case of SSBP, SSPG,  Elmore,  Leathers,  Del Ranch and Vulcan,  the
general partners thereof) have been organized and are operated as legal entities
separate and apart from MidAmerican, El Paso, CE Generation, Magma and any other
Affiliates of MidAmerican,  El Paso, CE Generation or Magma,  and,  accordingly,
the assets of the Funding  Corporation  and the Guarantors  (and, in the case of
SSBP,  SSPG,  Elmore,  Leathers,  Del Ranch and  Vulcan,  the  general  partners
thereof)  will  not  be  generally  available  to  satisfy  the  obligations  of
MidAmerican,  El  Paso,  CE  Generation,   Magma  or  any  other  Affiliates  of
MidAmerican,   El  Paso,  CE  Generation  or  Magma;  provided,   however,  that
unrestricted cash of the Funding  Corporation and the Guarantors or other assets
which are  available for  distribution  may,  subject to applicable  law and the
terms of financing  arrangements of such parties,  be advanced,  loaned, paid as
dividends or otherwise  distributed or contributed to  MidAmerican,  El Paso, CE
Generation, Magma or Affiliates thereof.

<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULE AND REPORTS ON FORM 8-K

     (a) Financial Statements and Schedules

         (i)  Financial Statements

              Financial Statements are included in Part II of this Form 10-K

         (ii) Financial Statement Schedules

              Financial  Statement  Schedules are not included  because they are
              not required or the information required is included in Part II of
              this Form 10-K.

     (b) Reports on Form 8-K

         Not applicable.

     (c) Exhibits

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

         For  the  purposes  of  complying  with  the  amendments  to the  rules
governing Form S-4 effective July 13, 1990 under the Securities Act of 1933, the
undersigned   hereby   undertakes  as  follows,   which   undertaking  shall  be
incorporated  by reference into the Funding  Corporation's  currently  effective
Registration Statements on Form S-4.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers and controlling  persons of
the  registrant,  the  registrant  has  been  advised  that in the  opinion  the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore,  unenforceable. In
the event that a claim for indemnification  against such liabilities (other than
the  payment by the  registrant  of  expenses  incurred  or paid by a  director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered,  the registrant will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such  indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

     (d) Financial  statements  required by Regulations  S-X, which are excluded
from the Annual Report by Rule 14a-3(b).

     Not Applicable

<PAGE>

                                                     SIGNATURES

     Pursuant  to the  requirements  of Section  13 or 15 (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                    SALTON SEA FUNDING CORPORATION
                                    BY:/S/  ROBERT S. SILBERMAN*
                                            Robert S. Silberman
                                            President and Chief
                                            Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                              DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000

                           SALTON SEA BRINE PROCESSING, L.P.
                           a California limited partnership

                           By:     Salton Sea Power Company,
                                   a California corporation, its
                                   general partner

                                   BY:/S/   ROBERT S. SILBERMAN*
                                   Robert S. Silberman
                                   President and Chief
                                   Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                              DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000

                                    SALTON SEA POWER GENERATION, L.P.,
                                    a California  limited partnership

                                    By:  Salton Sea Power Company, a
                                    California corporation, its
                                    general partner

                                    BY:/S/  ROBERT S. SILBERMAN*

                                            Robert S. Silberman
                                            President and Chief
                                            Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                               DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000

                                             FISH LAKE POWER LLC

                                             BY:/S/  ROBERT S. SILBERMAN*

                                                     Robert S. Silberman
                                                     President and Chief
                                                     Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                             DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000

                                              VULCAN POWER COMPANY

                                              BY:/S/  ROBERT S. SILBERMAN*

                                                      Robert S. Silberman
                                                      President and Chief
                                                      Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                               DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000

                                           CALENERGY OPERATING CORPORATION

                                           BY:/S/  ROBERT S. SILBERMAN*

                                                   Robert S. Silberman
                                                   President and Chief
                                                   Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                               DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000

                                                SALTON SEA ROYALTY LLC

                                                BY:/S/  ROBERT S. SILBERMAN*

                                                        Robert S. Silberman
                                                        President and Chief
                                                        Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                              DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000

                                  LEATHERS, L.P., a
                                  California  limited partnership
                                  By:  CalEnergy Operating Corporation, a
                                  Delaware corporation, its
                                  general partner

                                  BY:/S/  ROBERT S. SILBERMAN*

                                          Robert S. Silberman
                                          President and Chief
                                          Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                              DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                 ELMORE L.P., a California  limited partnership

                                 By:  CalEnergy Operating Corporation, a
                                 Delaware corporation, its
                                 general partner

                                 BY:/S/  ROBERT S. SILBERMAN*

                                         Robert S. Silberman
                                         President and Chief
                                         Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                             DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                    DEL RANCH L.P., a
                                    California  limited partnership

                                    By:  CalEnergy Operating Corporation, a
                                    Delaware corporation, its
                                    general partner

                                    BY:/S/  ROBERT S. SILBERMAN*

                                            Robert S. Silberman
                                            President and Chief
                                            Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                                DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                                 VPC GEOTHERMAL LLC., a
                                                 Delaware corporation

                                                 BY:/S/  ROBERT S. SILBERMAN*

                                                         Robert S. Silberman
                                                         President and Chief
                                                         Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                              DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                                  NIGUEL ENERGY COMPANY, a
                                                  California  corporation

                                                  BY:/S/  ROBERT S. SILBERMAN*

                                                          Robert S. Silberman
                                                          President and Chief
                                                          Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                               DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                                  CONEJO ENERGY COMPANY, a
                                                  California  corporation

                                                  BY:/S/  ROBERT S. SILBERMAN*
                                                          Robert S. Silberman
                                                          President and Chief
                                                          Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                               DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                               SAN FELIPE ENERGY COMPANY, a
                                               California  corporation

                                               BY:/S/  ROBERT S. SILBERMAN*
                                                       Robert S. Silberman
                                                       President and Chief
                                                       Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                              DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                         VULCAN/BN GEOTHERMAL POWER COMPANY, a
                                         Nevada general partnership
                                         By:  VULCAN POWER COMPANY,  a
                                                 Nevada corporation, Partner

                                         BY:/S/  ROBERT S. SILBERMAN*
                                                 Robert S. Silberman
                                                 President and Chief
                                                 Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                             DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                            SALTON SEA POWER L.L.C., a
                                            Delaware Limited Liability Company

                                            BY:/S/  ROBERT S. SILBERMAN*
                                                    Robert S. Silberman
                                                    President and Chief
                                                    Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                               DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                          CE TURBO LLC, a
                                          Delaware Limited Liability Company

                                          BY:/S/  ROBERT S. SILBERMAN*
                                                  Robert S. Silberman
                                                  President and Chief
                                                  Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                              DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                                 CE SALTON SEA INC., a
                                                 Delaware Corporation

                                                 BY:/S/  ROBERT S. SILBERMAN*
                                                         Robert S. Silberman
                                                         President and Chief
                                                         Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                              DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  LARRY KELLERMAN *                                            March 29, 2000
Larry Kellerman
Director

/S/  JOHN L. HARRISON *                                           March 29, 2000
John L. Harrison
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                          CALENERGY MINERALS LLC, a
                                          Delaware Limited Liability Company

                                          BY:/S/  ROBERT S. SILBERMAN*
                                                  Robert S. Silberman
                                                  Director, President and Chief
                                                  Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                              DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
Director, President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  GREGORY E. ABEL *                                            March 29, 2000
Gregory E. Abel
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                   SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or 15  (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly authorized, in the City of Omaha,
State of Nebraska, on March 29, 2000.

                                           SALTON SEA MINERALS CORP., a
                                           Delaware Corporation

                                           BY:/S/  ROBERT S. SILBERMAN*
                                                   Robert S. Silberman
                                                   Director, President and Chief
                                                   Operating Officer

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,  each
thereunto duly authorized in the City of Omaha, State of Nebraska,  on the dates
indicated.

SIGNATURE                                                              DATE

/S/  ROBERT S. SILBERMAN*                                         March 29, 2000
Robert S. Silberman
Director, President and Chief Operating Officer
(Principal Executive Officer)

/S/  JOSEPH M. LILLO *                                            March 29, 2000
Joseph M. Lillo
Vice President and Controller
(Principal Accounting Officer)

/S/  DOUGLAS L. ANDERSON                                          March 29, 2000
Douglas L. Anderson
Director

/S/   PATRICK J. GOODMAN*                                         March 29, 2000
Patrick J. Goodman
Director

/S/  GREGORY E. ABEL *                                            March 29, 2000
Gregory E. Abel
Director

* BY: /S/ DOUGLAS L. ANDERSON
          Douglas L. Anderson
          Attorney-in-fact

<PAGE>

                                INDEX TO EXHIBITS

EXHIBIT NO.                              DESCRIPTION OF EXHIBIT

3.1  Articles of  Incorporation  of the  Funding  Corporation  (incorporated  by
     reference to Exhibit 3.1 to the Funding Corporation  Registration Statement
     on Form S-4 dated August 9, 1995, 33-95538 ("Form S-4")).

3.2  By-laws of the Funding  Corporation  (incorporated  by reference to Exhibit
     3.2 to the Funding Corporation Form S-4).

3.3  Limited Partnership Agreement of SSBP (incorporated by reference to Exhibit
     3.3 to the Funding Corporation Form S-4).

3.4  Limited Partnership Agreement of SSPG (incorporated by reference to Exhibit
     3.4 to the Funding Corporation Form S-4).

3.5  Articles  of  Incorporation  of Fish Lake  (incorporated  by  reference  to
     Exhibit 3.5 to the Funding Corporation Form S-4).

3.6  By-laws of Fish Lake  (incorporated  by  reference  to  Exhibit  3.6 to the
     Funding Corporation Form S-4).

3.7  Articles of Incorporation of VPC  (incorporated by reference to Exhibit 3.7
     to the Funding Corporation Form S-4).

3.8  By-laws of VPC  (incorporated  by  reference  to Exhibit 3.8 to the Funding
     Corporation Form S-4).

3.9  Articles of Incorporation of CEOC (incorporated by reference to Exhibit 3.9
     to the Funding Corporation Form S-4).

3.10 By-laws of CEOC  (incorporated  by reference to Exhibit 3.10 to the Funding
     Corporation Form S-4).

3.11 Articles  of  Incorporation  of  the  Royalty  Guarantor  (incorporated  by
     reference to Exhibit 3.11 to the Funding Corporation Form S-4).

3.12 By-laws of the Royalty Guarantor (incorporated by reference to Exhibit 3.12
     to the Funding Corporation Form S-4).

3.13 Certificate of Amendment of Certificate of Incorporation  dated as of March
     26,  1996  (incorporated  by  reference  to  Exhibit  3.13  to the  Funding
     Corporation Form 10-K for the year ending December 31, 1996).

3.14 Articles of Incorporation of BNG (incorporated by reference to Exhibit 3.13
     to the Funding Corporation Registration Statement on Form S-4 dated July 2,
     1996, 333-07527 ("Funding Corporation II Form S-4")).

3.15 By-laws of BNG  (incorporated  by  reference to Exhibit 3.14 to the Funding
     Corporation II Form S-4).

3.16 Articles of  Incorporation  of San Felipe  (incorporated  by  reference  to
     Exhibit 3.15 to the Funding Corporation II Form S-4).

3.17 By-laws of San Felipe  (incorporated  by  reference  to Exhibit 3.16 to the
     Funding Corporation II Form S-4).

3.18 Articles of Incorporation  of Conejo  (incorporated by reference to Exhibit
     3.17 to the Funding Corporation II Form S-4).

3.19 By-laws of Conejo (incorporated by reference to Exhibit 3.18 to the Funding
     Corporation II Form S-4).

3.20 Articles of Incorporation  of Niguel  (incorporated by reference to Exhibit
     3.19 to the Funding Corporation II Form S-4).

3.21 By-laws of Niguel (incorporated by reference to Exhibit 3.20 to the Funding
     Corporation II Form S-4).

3.22 General  Partnership  Agreement  of Vulcan  (incorporated  by  reference to
     Exhibit 3.21 to the Funding Corporation II Form S-4).

3.23 Limited  Partnership  Agreement of Leathers  (incorporated  by reference to
     Exhibit 3.22 to the Funding Corporation II Form S-4).

3.24 Amended  and   Restated   Limited   Partnership   Agreement  of  Del  Ranch
     (incorporated  by reference to Exhibit 3.23 to the Funding  Corporation  II
     Form S-4).

3.25 Amended and Restated Limited Partnership  Agreement of Elmore (incorporated
     by reference to Exhibit 3.24 to the Funding Corporation II Form S-4).

4.1(a) Indenture,  dated as of July 21, 1995,  between Chemical Trust Company of
     California  and the  Funding  Corporation  (incorporated  by  reference  to
     Exhibit 4.1(a) to the Funding Corporation Form S-4).

4.1(b) First  Supplemental  Indenture,  dated as of October  18,  1995,  between
     Chemical   Trust  Company  of  California   and  the  Funding   Corporation
     (incorporated  by  reference to Exhibit  4.1(b) to the Funding  Corporation
     Form S-4).

4.1(c)  Second  Supplemental  Indenture,  dated  as of June  20,  1996,  between
     Chemical   Trust  Company  of  California   and  the  Funding   Corporation
     (incorporated by reference to Exhibit 4.1(c) to the Funding  Corporation II
     Form S-4).

4.1(d) Third Supplemental Indenture between Chemical Trust Company of California
     and the Funding Corporation (incorporated by reference to Exhibit 4.1(d) to
     the Funding Corporation II Form S-4).

4.1(e)  Fourth   Supplemental   Indenture  between  Chemical  Trust  Company  of
     California  and the  Funding  Corporation  (incorporated  by  reference  to
     Exhibit 4.1(e) to the Funding  Corporation  Form 10-K/A for the year ending
     December 31, 1998).

4.2  Salton Sea Secured Guarantee,  dated as of July 21, 1995, by SSBP, SSPG and
     Fish Lake in favor of Chemical Trust Company of California (incorporated by
     reference to Exhibit 4.2 to the Funding Corporation Form S-4).

4.3(a) Partnership  Guarantors Secured Limited  Guarantee,  dated as of July 21,
     1995,  by CEOC and VPC in favor of  Chemical  Trust  Company of  California
     (incorporated  by reference to Exhibit 4.3 to the Funding  Corporation Form
     S-4).

4.3(b) Amended and Restated  Partnership  Guarantors  Secured Limited Guarantee,
     dated as of June 20, 1996 by CEOC,  and VPC,  Conejo,  Niguel,  Sal Felipe,
     BNG,  Del Ranch,  Elmore,  Leathers  and Vulcan in favor of Chemical  Trust
     Company of  California  (incorporated  by  reference  to Exhibit 4.3 to the
     Funding Corporation II Form S-4).

4.3(c) Second Amended and Restated Partnership Secured Limited Guarantee,  dated
     as of October 13, 1998 by by CEOC,  and VPC,  Conejo,  Niguel,  Sal Felipe,
     BNG,  Del Ranch,  Elmore,  Leathers  and Vulcan in favor of Chemical  Trust
     Company of California  (incorporated  by reference to Exhibit 4.3(c) to the
     Funding Corporation Form 10-K/A for the year ending December 31, 1998).

4.4  Royalty Guarantor Secured Limited Guarantee,  dated as of July 21, 1995, by
     the Royalty  Guarantor  in favor of Chemical  Trust  Company of  California
     (incorporated  by reference to Exhibit 4.4 to the Funding  Corporation Form
     S-4).

4.5(a) Exchange and Registration  Rights Agreement,  dated July 21, 1995, by and
     among CS First Boston  Corporation,  Lehman  Brothers  Inc. and the Funding
     Corporation  (incorporated  by  reference  to  Exhibit  4.5 to the  Funding
     Corporation Form S-4).

4.5(b) Exchange and Registration  Rights Agreement,  dated June 20, 1996, by and
     between  CS  First   Boston   Corporation   and  the  Funding   Corporation
     (incorporated  by  reference to Exhibit 4.5 to the Funding  Corporation  II
     Form S-4).

4.6(a) Collateral Agency and Intercreditor Agreement, dated as of July 21, 1995,
     by and among Credit  Suisse,  Chemical  Trust  Company of  California,  the
     Funding  Corporation  and the  Guarantors  (incorporated  by  reference  to
     Exhibit 4.6 to the Funding Corporation Form S-4).

4.6(b) First  Amendment to the Collateral  Agency and  Intercreditor  Agreement,
     dated asm of June 20, 1996,  by and among  Credit  Suisse,  Chemical  Trust
     Company  of  California,   the  Funding   Corporation  and  the  Guarantors
     (incorporated by reference to Exhibit 4.6(b) to the Funding  Corporation II
     Form S-4).

4.6(c) Second Amendment to the Collateral  Agency and  Intercreditor  Agreement,
     dated as of October 13, 1998, by and among Credit  Suisse,  Chemical  Trust
     Company  of  California,   the  Funding   Corporation  and  the  Guarantors
     (incorporated  by  reference to Exhibit  4.6(c) to the Funding  Corporation
     Form 10-K/A for the year ending December 31, 1998).

4.7  Stock Pledge  Agreement,  dated as of July 21, 1995, by Magma Power Company
     in favor of Chemical Trust Company of California (incorporated by reference
     to Exhibit 4.7 to the Funding Corporation Form S-4).

4.8(a) Purchase  Agreement,  dated July 18,  1995,  by and among CS First Boston
     Corporation,   Lehman   Brothers  Inc.,  the  Guarantors  and  the  Funding
     Corporation  (incorporated  by  reference  to  Exhibit  4.8 to the  Funding
     Corporation Form S-4).

4.8(b) Purchase  Agreement,  dated June 17,  1996,  by and among CS First Boston
     Corporation,  the Guarantors and the Funding  Corporation  (incorporated by
     reference to Exhibit 4.8 to the Funding Corporation II Form S-4).

4.8(c) Purchase  Agreement,  dated October 13, 1998 by and among CS First Boston
     Corporation,  the Guarantors and the Funding  Corporation  (incorporated by
     reference to Exhibit 4.8(c) to the Funding  Corporation Form 10-K/A for the
     year ending December 31, 1998).

4.9  Support  Letter,  dated as of July  21,  1995,  by and  among  Magma  Power
     Company,  the  Funding  Corporation  and the  Guarantors  (incorporated  by
     reference to Exhibit 4.9 to the Funding Corporation Form S-4).

4.37 Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated as
     of July 21, 1995, by and among the Funding  Corporation,  certain banks and
     Credit Suisse,  as agent  (incorporated by reference to Exhibit 4.10 to the
     Funding Corporation Form S-4).

4.10(a) Amendment to Notes and to Amended Debt Service  Reserve Letter of Credit
     and  Reimbursement  Agreement,  dated  October 13,  1998,  by and among the
     Funding   Corporation,   certain   banks  and  Credit   Suisse,   as  agent
     (incorporated  by reference to Exhibit  4.10(a) to the Funding  Corporation
     Form 10-K/A for the year ending December 31, 1998).

4.11 Revolving Credit Agreement,  dated as of July 21, 1995, by and among Credit
     Suisse and the Funding  Corporation  (incorporated  by reference to Exhibit
     4.11 to the Funding Corporation Form S-4).

4.12 Salton Sea Credit  Agreement,  dated July 21, 1995, by and among SSBP, SSPG
     and Fish Lake  (incorporated  by  reference  to Exhibit 4.12 to the Funding
     Corporation Form S-4).

4.13 Salton Sea Project Note,  dated July 21, 1995, by SSBP,  SSPG and Fish Lake
     in favor of the Funding  Corporation  (incorporated by reference to Exhibit
     4.13 to the Funding Corporation Form S-4).

4.13(a) Salton Sea Project Note (SSI), dated October 13, 1998, by SSBP, SSPG and
     Fish Lake in favor of the Funding Corporation (incorporated by reference to
     Exhibit 4.13(a) to the Funding  Corporation Form 10-K/A for the year ending
     December 31, 1998).

4.13(b) Salton Sea Project Note (SSIII),  dated October 13, 1998, by SSBP,  SSPG
     and Fish Lake in favor of the Funding (incorporated by reference to Exhibit
     4.13(b) to the Funding Corporation Form 10-K/A for the year ending December
     31, 1998).

4.14(a) Deposit and  Disbursement  Agreement,  dated as of July 21, 1995, by and
     among the Funding Corporation, Chemical Trust Company of California and the
     Guarantors  (incorporated  by  reference  to  Exhibit  4.14 to the  Funding
     Corporation Form S-4).

4.14(b) Amendment No. 1 to Deposit and Disbursement Agreement,  dated as of June
     20, 1996, by and among the Funding  Corporation,  Chemical Trust Company of
     California and the Guarantors (incorporated by reference to Exhibit 4.14(b)
     to the Funding Corporation II Form S-4).

4.14(c) Amended and Restated  Deposit and  Disbursement  Agreement,  dated as of
     October 13,  1998,  by and among the Funding  Corporation,  Chemical  Trust
     Company of California and the Guarantors. *

4.15 Partnership Interest Pledge Agreement,  dated as of July 21, 1995, by Magma
     Power  Company  and Salton Sea Power  Company  in favor of  Chemical  Trust
     Company of  California  (incorporated  by  reference to Exhibit 4.15 to the
     Funding Corporation Form S-4).

4.16 Partnership  Interest Pledge Agreement,  dated as of July 21, 1995, by SSBP
     and  Salton  Sea  Power  Company  in favor of  Chemical  Trust  Company  of
     California  (incorporated  by  reference  to  Exhibit  4.16 to the  Funding
     Corporation Form S-4).

4.17 Stock Pledge Agreement (Pledge of Stock of Fish Lake by Magma Power Company
     and the Funding  Corporation),  dated as of July 21,  1995,  by Magma Power
     Company and the Funding  Corporation  in favor of Chemical Trust Company of
     California  (incorporated  by  reference  to  Exhibit  4.17 to the  Funding
     Corporation Form S-4).

4.18 Cost Overrun  Commitment,  dated as of July 21, 1995, between  MidAmerican,
     SSPG, SSBP and Fish Lake  (incorporated by reference to Exhibit 4.18 to the
     Funding Corporation Form S-4).

4.19(a) Partnership  Guarantors  Credit  Agreement,  dated July 21, 1995, by and
     among CEOC, VPC and the Funding  Corporation  (incorporated by reference to
     Exhibit 4.19 to the Funding Corporation Form S-4).

4.19(b) Amended and Restated Partnership Guarantors Credit Agreement, dated June
     20,  1996,  by  and  among  the  Partnership  Guarantors  and  the  Funding
     Corporation  (incorporated  by  reference  to Exhibit  4.19 to the  Funding
     Corporation II Form S-4).

4.19(c) Second Amended and Restated  Partnership  Guarantors  Credit  Agreement,
     dated October 13, 1998,  by and among the  Partnership  Guarantors  and the
     Funding  Corporation  (incorporated  by reference to Exhibit 4.19(c) to the
     Funding Corporation Form 10-K/A for the year ending December 31, 1998).

4.20 Partnership  Guarantors Security Agreement and Assignment of Rights,  dated
     as of July 21, 1995, by CEOC and VPC in favor of Chemical  Trust Company of
     California  (incorporated  by  reference  to  Exhibit  4.20 to the  Funding
     Corporation Form S-4).

4.21 Stock Pledge Agreement  (Pledge of Stock of CEOC by Magma Power Company and
     the Funding Corporation), dated as of July 21, 1995, by Magma Power Company
     and Funding  Corporation  in favor of Chemical  Trust Company of California
     (incorporated by reference to Exhibit 4.21 to the Funding  Corporation Form
     S-4).

4.22 Stock Pledge  Agreement  (Pledge of Stock of VPC by Magma Power Company and
     the Funding Corporation), dated as of July 21, 1995, by Magma Power Company
     and  the  Funding  Corporation  in  favor  of  Chemical  Trust  Company  of
     California  (incorporated  by  reference  to  Exhibit  4.22 to the  Funding
     Corporation Form S-4).

4.23 Royalty  Guarantor Credit  Agreement,  among the Royalty  Guarantor and the
     Funding  Corporation,  dated as of July 21, 1995 (incorporated by reference
     to Exhibit 4.23 to the Funding Corporation Form S-4).

4.24 Royalty Project Note,  dated as of July 21, 1995, by the Royalty  Guarantor
     in favor of the Funding  Corporation  (incorporated by reference to Exhibit
     4.24 to the Funding Corporation Form S-4).

4.25 Royalty Security Agreement and Assignment of Revenues, dated as of July 21,
     1995,  by the  Royalty  Guarantor  in favor of  Chemical  Trust  Company of
     California  (incorporated  by  reference  to  Exhibit  4.25 to the  Funding
     Corporation Form S-4).

4.26 Royalty Deed of Trust,  dated as of July 21, 1995, by the Royalty Guarantor
     to Chicago Title Company for the use and benefit of Chemical  Trust Company
     of  California  (incorporated  by  reference to Exhibit 4.26 to the Funding
     Corporation Form S-4).

4.27 Stock Pledge Agreement (Pledge of Stock of Royalty Guarantor by Magma Power
     Company and the Funding  Corporation),  dated as of July 21, 1995, by Magma
     Power  Company  and the  Funding  Corporation  in favor of  Chemical  Trust
     Company of  California  (incorporated  by  reference to Exhibit 4.27 to the
     Funding Corporation Form S-4).

4.28 Collateral Assignment of the Imperial Irrigation District Agreements, dated
     as of July 21, 1995, by SSBP, SSPG and Fish Lake in favor of Chemical Trust
     Company of  California  (incorporated  by  reference to Exhibit 4.28 to the
     Funding Corporation Form S-4).

4.29 Collateral  Assignments of Certain Salton Sea Agreements,  dated as of July
     21, 1995, by SSBP, SSPG and Fish Lake in favor of Chemical Trust Company of
     California  (incorporated  by  reference  to  Exhibit  4.29 to the  Funding
     Corporation Form S-4).

4.30 Debt Service Reserve Letter of Credit by Credit Suisse in favor of Chemical
     Trust Company of California  (incorporated  by reference to Exhibit 4.30 to
     the Funding Corporation Form S-4).

4.31 Partnership  Project Note, dated July 21, 1995, by VPC and CEOC in favor of
     the Funding Corporation.

4.31(a) Partnership  Project Note (SSI), dated October 13, 1998, by VPC and CEOC
     in favor of the Funding  Corporation  (incorporated by reference to Exhibit
     4.31(a) to the Funding Corporation Form 10-K/A for the year ending December
     31, 1998).

4.31(b) Partnership Project Note (SSII), dated October 13, 1998, by VPC and CEOC
     in favor of the Funding  Corporation  (incorporated by reference to Exhibit
     4.31(b) to the Funding Corporation Form 10-K/A for the year ending December
     31, 1998).

4.31(c)  Partnership  Project Note  (SSIII),  dated October 13, 1998, by VPC and
     CEOC in favor of the Funding  Corporation  (incorporated  by  reference  to
     Exhibit 4.31(c) to the Funding  Corporation Form 10-K/A for the year ending
     December 31, 1998).

4.32 Collateral Assignment of the Imperial Irrigation District Agreements, dated
     as of June 20,  1996,  by Vulcan,  Elmore,  Leathers,  VPC and Del Ranch in
     favor of Chemical Trust Company of California (incorporated by reference to
     Exhibit 4.29 to the Funding Corporation II Form S-4).

4.33 Collateral Assignments of Certain Partnership Agreements,  dated as of June
     20,  1996,  by Vulcan  Elmore,  Leathers and Del Ranch in favor of Chemical
     Trust Company of California  (incorporated  by reference to Exhibit 4.31 to
     the Funding Corporation II Form S-4).

4.34 Debt Service Reserve Letter of Credit by Credit Suisse in favor of Chemical
     Trust Company of California  (incorporated  by reference to Exhibit 4.32 to
     the Funding Corporation II Form S-4).

4.35 Partnership   Project  Note,  dated  June  20,  1996,  by  the  Partnership
     Guarantors in favor of the Funding  Corporation in the principal  amount of
     $54,956,000  (incorporated  by  reference  to Exhibit  4.33 to the  Funding
     Corporation II Form S-4).

4.36 Partnership   Project  Note,  dated  June  20,  1996,  by  the  Partnership
     Guarantors in favor of the Funding  Corporation in the principal  amount of
     $135,000,000  (incorporated  by  reference  to Exhibit  4.34 to the Funding
     Corporation II Form S-4).

4.37 Deed of  Trust,  dated as of June 20,  1996,  by Vulcan  to  Chicago  Title
     Company  for the use and benefit of Chemical  Trust  Company of  California
     (incorporated  by reference to Exhibit 4.35 to the Funding  Corporation  II
     Form S-4).

4.37(a) First  Amendment to Deed of Trust,  dated  October 13, 1998 by Vulcan to
     Chicago Title Company for the use and benefit of Chemical  Trust Company of
     California  (incorporated  by reference  to Exhibit  4.37(a) to the Funding
     Corporation Form 10-K/A for the year ending December 31, 1998).

4.38 Deed of  Trust,  dated as of June 20,  1996,  by Elmore  to  Chicago  Title
     Company  for the use and benefit of Chemical  Trust  Company of  California
     (incorporated  by reference to Exhibit 4.36 to the Funding  Corporation  II
     Form S-4).

4.38(a) First  Amendment to Deed of Trust,  dated October 13, 1998, by Elmore to
     Chicago Title Company for the use and benefit of Chemical  Trust Company of
     California  (incorporated  by reference  to Exhibit  4.38(a) to the Funding
     Corporation Form 10-K/A for the year ending December 31, 1998).

4.39 Deed of Trust,  dated as of June 20,  1996,  by Leathers  to Chicago  Title
     Company  for the use and benefit of Chemical  Trust  Company of  California
     (incorporated  by reference to Exhibit 4.37 to the Funding  Corporation  II
     Form S-4).

4.39(a) First Amendment to Deed of Trust, dated October 13, 1998, by Leathers to
     Chicago Title Company for the use and benefit of Chemical  Trust Company of
     California  (incorporated  by reference  to Exhibit  4.39(a) to the Funding
     Corporation Form 10-K/A for the year ending December 31, 1998).

4.40 Deed of Trust,  dated as of June 20,  1996,  by Del Ranch to Chicago  Title
     Company  for the use and benefit of Chemical  Trust  Company of  California
     (incorporated  by reference to Exhibit 4.38 to the Funding  Corporation  II
     Form S-4).

4.40(a) First  Amendment to Deed of Trust,  dated October 13, 1998, by Del Ranch
     to Chicago Title Company for the use and benefit of Chemical  Trust Company
     of California  (incorporated by reference to Exhibit 4.40(a) to the Funding
     Corporation Form 10-K/A for the year ending December 31, 1998).

4.41 Stock Pledge  Agreement,  Dated as of June 20, 1996, by CEOC,  pledging the
     stock of Conejo,  Niguel and San Felipe in favor of Chemical  Trust Company
     of  California  for the  benefit of the  Secured  Parties  and the  Funding
     Corporation  (incorporated  by  reference  to Exhibit  4.39 to the  Funding
     Corporation II Form S-4).

4.42 Stock Pledge  Agreement,  dated as of June 20, 1996,  by VPC,  pledging the
     stock of BNG in favor of  Chemical  Trust  Company  of  California  for the
     benefit of the Secured Parties and the Funding Corporation (incorporated by
     reference to Exhibit 4.40 to the Funding Corporation II Form S-4).

4.43 Partnership  Interest Pledge  Agreement,  dated as of June 20, 1996, by VPC
     and BNG, pledging the partnership  interests in Vulcan in favor of Chemical
     Trust Company of California for the benefit of the Secured  Parties and the
     Funding  Corporation  (incorporated  by  reference  to Exhibit  4.41 to the
     Funding Corporation II Form S-4).

4.44 Partnership Interest Pledge Agreement, dated as of June 20, 1996, by Magma,
     CEOC and each of Conejo,  Niguel,  San Felipe,  respectively,  pledging the
     partnership interests in Del Ranch, Elmore and Leathers,  respectively,  in
     favor of  Chemical  Trust  Company  of  California  for the  benefit of the
     Secured Parties and the Funding  Corporation  (incorporated by reference to
     Exhibit 4.42 to the Funding Corporation II Form S-4).

4.45 Agreement regarding Security  Documents,  dated as of June 20, 1996, by and
     among the Initial  Guarantors,  Magma,  SSPC, the Funding  Corporation  and
     Chemical Trust Company of California  (incorporated by reference to Exhibit
     4.43 to the Funding Corporation II Form S-4).

10.1(a) Salton Sea Deed of Trust,  Assignment of Rents,  Security  Agreement and
     Fixture  Filing,  dated as of July 21, 1995, by SSBP, SSPG and Fish Lake to
     Chicago Title Company for the use and benefit of Chemical  Trust Company of
     California  (incorporated  by  reference  to  Exhibit  10.1 to the  Funding
     Corporation Form S-4) .

10.1(b) First  Amendment  to  Salton  Sea Deed of  Trust,  Assignment  of Rents,
     Security  Agreement and Fixed  Filing,  dated as of June 20, 1996, by SSBP,
     SSPG and Fish Lake to  Chicago  Title  Company  for the use and  benefit of
     Chemical Trust Company of California  (incorporated by reference to Exhibit
     10.2 to the Funding Corporation II Form S-4).

10.1(c) Second  Amendment  to Salton  Sea Deed of  Trust,  Assignment  of Rents,
     Security Agreement and Fixed Filing, dated as of October 13, 1998, by SSBP,
     SSPG and Fish Lake to  Chicago  Title  Company  for the use and  benefit of
     Chemical Trust Company of California  (incorporated by reference to Exhibit
     10.1(c) to the Funding Corporation Form 10-K/A for the year ending December
     31, 1998).

10.2 Collateral  Assignment of Southern  California  Edison Company  Agreements,
     dated as of July 21, 1995, by SSPG and Fish Lake in favor of Chemical Trust
     Company of  California  (incorporated  by  reference to Exhibit 10.2 to the
     Funding Corporation Form S-4).

10.3 Contract for the  Purchase  and Sale of Electric  Power from the Salton Sea
     Geothermal  Facility,  dated  May 9,  1987  (the  "Unit  1  Power  Purchase
     Agreement"),  between Southern  California Edison Company and Earth Energy,
     Inc.  (incorporated by reference to Exhibit 10.3 to the Funding Corporation
     Form S-4).

10.4 Amendment No. 1 to the Unit 1 Power Purchase  Agreement,  dated as of March
     30, 1993, between Southern California Edison Company and Earth Energy, Inc.
     (incorporated by reference to Exhibit 10.4 to the Funding  Corporation Form
     S-4).

10.5 Amendment  No. 2 to Unit 1 Power  Purchase  Agreement,  dated  November 29,
     1994, between Southern  California Edison Company and SSPG (incorporated by
     reference to Exhibit 10.5 to the Funding Corporation Form S-4).

10.6 Contract for the Purchase and Sale of Electric Power,  dated April 16, 1985
     (the "Unit 2 Power Purchase Agreement"), between Southern California Edison
     Company and Westmoreland  Geothermal Associates  (incorporated by reference
     to Exhibit 10.6 to the Funding Corporation Form S-4).

10.7 Amendment No. 1 to Unit 2 Power  Purchase  Agreement,  dated as of December
     18, 1987, between Southern California Edison Company and Earth Energy, Inc.
     (incorporated by reference to Exhibit 10.7 to the Funding  Corporation Form
     S-4).

10.8 Power Purchase  Contract,  dated April 16, 1985 (the "Unit 3 Power Purchase
     Agreement"),  between  Southern  California  Edison  Company  and Union Oil
     Company of  California  (incorporated  by  reference to Exhibit 10.8 to the
     Funding Corporation Form S-4).

10.9 Power  Purchase  Contract (the "Unit 4 Power  Purchase  Agreement"),  dated
     November 29, 1994,  between Southern  California  Edison Company,  SSPG and
     Fish  Lake  (incorporated  by  reference  to  Exhibit  10.9 to the  Funding
     Corporation Form S-4).

10.10Plant  Connection  Agreement  (Unit 2), dated October 3, 1989,  between the
     Imperial  Irrigation  District  and Earth  Energy,  Inc.  (incorporated  by
     reference to Exhibit 10.10 to the Funding Corporation Form S-4).

10.11Plant  Connection  Agreement,  dated  August 2, 1988 (Unit 3),  between the
     Imperial  Irrigation  District and Desert Power  Company  (incorporated  by
     reference to Exhibit 10.11 to the Funding Corporation Form S-4).

10.12Imperial  Irrigation  District  Funding  and  Construction   Agreements  as
     amended  (Units 2 and 3),  dated as of June 29,  1987,  among the  Imperial
     Irrigation  District,  Earth Energy,  Inc.,  Chevron  Geothermal Company of
     California,  Geo East Mesa No. 3, Inc.,  Magma Power Company,  Desert Power
     Company,  Geo East Mesa No.  2,  Inc.,  Heber  Geothermal  Company,  Ormesa
     Geothermal, Ormesa Geothermal II, Vulcan/BN Geothermal Power Company, Union
     Oil Company of California,  Del Ranch L.P., Elmore L.P., Leathers L.P., Geo
     East Mesa Limited  Partnership and Imperial Resource  Recovery  Associates,
     L.P. (incorporated by reference to Exhibit 10.12 to the Funding Corporation
     Form S-4).

10.13Transmission  Service  Agreement,  dated as of  October  3, 1989  (Unit 2),
     between  the  Imperial   Irrigation   District  and  Earth   Energy,   Inc.
     (incorporated by reference to Exhibit 10.13 to the Funding Corporation Form
     S-4).

10.14Transmission  Service  Agreement,  dated as of  August  2,  1988  (Unit 3),
     between  the  Imperial   Irrigation   District  and  Desert  Power  Company
     (incorporated by reference to Exhibit 10.14 to the Funding Corporation Form
     S-4).

10.15Plant  Connection  Agreement  (Unit 4), dated as of July 14,  1995,  by and
     between the Imperial Irrigation District,  SSPG and Fish Lake (incorporated
     by reference to Exhibit 10.15 to the Funding Corporation Form S-4).

10.16Letter Agreement,  dated February 2, 1995,  between Magma Power Company and
     the  Imperial  Irrigation  District  (incorporated  by reference to Exhibit
     10.16 to the Funding Corporation Form S-4).

10.17Transmission  Service Agreement (Unit 4), dated as of July 14, 1995, by and
     between the Imperial Irrigation District,  SSPG and Fish Lake (incorporated
     by reference to Exhibit 10.17 to the Funding Corporation Form S-4).

10.18Transmission  Line  Construction  Agreement  (Unit 4), dated July 14, 1995,
     between the Imperial Irrigation District,  SSPG and Fish Lake (incorporated
     by reference to Exhibit 10.18 to the Funding Corporation Form S-4).

10.19Funding  Agreement,   dated  June  15,  1988  (Unit  2),  between  Southern
     California Edison Company and Earth Energy, Inc. (incorporated by reference
     to Exhibit 10.19 to the Funding Corporation Form S-4).

10.20Second  Amended and  Restated  Administrative  Services  Agreement,  by and
     among  CEOC,  SSBP,  SSPG  and  Fish  Lake,  dated  as  of  July  15,  1995
     (incorporated by reference to Exhibit 10.20 to the Funding Corporation Form
     S-4).

10.21Second Amended and Restated Operating and Maintenance  Agreement,  dated as
     of July 15, 1995,  by and among Magma Power  Company,  SSBP,  SSPG and Fish
     Lake (incorporated by reference to Exhibit 10.21 to the Funding Corporation
     Form S-4).

10.22 Intentionally Omitted.

10.23Collateral  Assignment of Southern  California  Edison Company  Agreements,
     dated as of June 20,  1996,  by Vulcan,  Elmore,  Leathers and Del Ranch in
     favor of Chemical Trust Company of California (incorporated by reference to
     Exhibit 10.23 to the Funding Corporation II Form S-4).

10.24Administrative Services Agreement,  dated as of June 17, 1996, between CEOC
     and Vulcan  (incorporated  by  reference  to Exhibit  10.24 to the  Funding
     Corporation II Form S-4).

10.25Amended and Restated  Construction,  Operating  and  Accounting  Agreement,
     dated  as of June  17,  1996,  between  VPC  and  Vulcan  (incorporated  by
     reference to Exhibit 10.25 to the Funding Corporation II Form S-4).

10.26Long Term  Power  Purchase  Contract,  dated  March 1,  1984,  as  amended,
     between  SCE  and  Vulcan,   as   successor  to  Magma   Electric   Company
     (incorporated  by reference to Exhibit 10.26 to the Funding  Corporation II
     Form S-4).

10.27Transmission  Service  Agreement,  dated December 1, 1988,  between VPC and
     IID (incorporated by reference to Exhibit 10.27 to the Funding  Corporation
     II Form S-4).

10.28Plant Connection  Agreement,  dated as of December 1, 1988, between VPC and
     IID (incorporated by reference to Exhibit 10.28 to the Funding  Corporation
     II Form S-4).

10.29Amended and Restated  Administrative  Services Agreement,  dated as of June
     17, 1996  between  CEOC and Elmore  (incorporated  by  reference to Exhibit
     10.29 to the Funding Corporation II Form S-4).

10.29Amended and Restated Operating and Maintenance Agreement,  dated as of June
     17,  1996,  between CEOC and Elmore  (incorporated  by reference to Exhibit
     10.30 to the Funding Corporation II Form S-4).

10.31Long Term  Power  Purchase  Contract,  dated  June 15,  1984,  as  amended,
     between  SCE  and  Elmore,   as   successor  to  Magma   Electric   Company
     (incorporated  by reference to Exhibit 10.31 to the Funding  Corporation II
     Form S-4).

10.32Transmission  Service  Agreement,  dated as of August 2, 1988,  as amended,
     between Elmore and IID  (incorporated  by reference to Exhibit 10.32 to the
     Funding Corporation II Form S-4).

10.33Plant Connection Agreement,  dated as of August 2, 1988, between Elmore and
     IID (incorporated by reference to Exhibit 10.33 to the Funding  Corporation
     II Form S-4).

10.34Amended and Restated  Administrative  Services Agreement,  dated as of June
     17, 1996,  between CEOC and Leathers  (incorporated by reference to Exhibit
     10.34 to the Funding Corporation II Form S-4).

10.35Amended and Restated Operating and Maintenance Agreement,  dated as of June
     17, 1996,  between CEOC and Leathers  (incorporated by reference to Exhibit
     10.35 to the Funding Corporation II Form S-4).

10.36Long Term Power  Purchase  Contract,  dated  August 16,  1985,  as amended,
     between SCE and  Leathers,  as  successor  to Imperial  Energy  Corporation
     (incorporated  by reference to Exhibit 10.36 to the Funding  Corporation II
     Form S-4).

10.37Transmission  Service  Agreement,  dated as of October 3, 1989, as amended,
     between Leathers and IID (incorporated by reference to Exhibit 10.37 to the
     Funding Corporation II Form S-4).

10.38Plant Connection  Agreement,  dated as of October 3, 1989, between Leathers
     and  IID  (incorporated  by  reference  to  Exhibit  10.38  to the  Funding
     Corporation II Form S-4).

10.39Amended and Restated  Administrative  Services Agreement,  dated as of June
     17, 1996, between CEOC and Del Ranch  (incorporated by reference to Exhibit
     10.39 to the Funding Corporation II Form S-4).

10.40Amended and Restated Operating and Maintenance Agreement,  dated as of June
     17, 1996, between CEOC and Del Ranch  (incorporated by reference to Exhibit
     10.40 to the Funding Corporation II Form S-4).

10.41Long Term Power  Purchase  Contract,  dated  February 22, 1984, as amended,
     between SCE and Del Ranch, as successor to Magma (incorporated by reference
     to Exhibit 10.41 to the Funding Corporation II Form S-4).

10.42Transmission  Service  Agreement,  dated as of August 2, 1988,  as amended,
     between Del Ranch and IID  (incorporated  by reference to Exhibit  10.42 to
     the Funding Corporation II Form S-4).

10.43Plant Connection  Agreement,  dated as of August 2, 1988, between Del Ranch
     and  IID  (incorporated  by  reference  to  Exhibit  10.43  to the  Funding
     Corporation II Form S-4).

10.44Funding  Agreement,   dated  May  18,  1990,  between  SCE  and  Del  Ranch
     (incorporated  by reference to Exhibit 10.44 to the Funding  Corporation II
     Form S-4).

10.45Funding   Agreement,   dated  May  18,   1990,   between   SCE  and  Elmore
     (incorporated  by reference to Exhibit 10.45 to the Funding  Corporation II
     Form S-4).

10.46Funding   Agreement,   dated  June  15,  1990,  between  SCE  and  Leathers
     (incorporated  by reference to Exhibit 10.46 to the Funding  Corporation II
     Form S-4).

10.47Funding   Agreement,   dated  May  18,  1990,   between  SCE  and  Leathers
     (incorporated  by reference to Exhibit 10.47 to the Funding  Corporation II
     Form S-4).

10.48Funding   Agreement,   dated  May  18,   1990,   between   SCE  and  Vulcan
     (incorporated  by reference to Exhibit 10.48 to the Funding  Corporation II
     Form S-4).

24.  Power of Attorney

27.  Financial Data Schedule.


                                                                     Exhibit 24

                                POWER OF ATTORNEY

         The  undersigned,  members of the Board of  Directors  and  Officers of
SALTON SEA FUNDING CORPORATION,  a Delaware corporation (the "Company"), and the
following companies:

         Salton Sea Brine Processing L.P.       Salton Sea Power Generation L.P.
         Fish Lake Power LLC                    Vulcan Power Company
         CalEnergy Operating Corporation        Salton Sea Royalty LLC
         VPC Geothermal LLC                     San Felipe Energy Company
         Conejo Energy Company                  Niguel Energy Company
         Vulcan/BN Geothermal Power Company     Leathers, L.P.
         Del Ranch, L.P.                        Elmore, L.P.
         Salton Sea Power L.L.C.                CE Turbo LLC
         CE Salton Sea Inc.

hereby  constitute  and appoint  Steven A.  McArthur and Douglas L. Anderson and
each of them, as his/her true and lawful  attorney-in-fact  and agent, with full
power of substitution and  resubstitution,  for and in his stead, in any and all
capacities,  to sign on his behalf the Company's Form 10-K Annual Report for the
fiscal year ending  December 31, 1999 and to execute any amendments  thereto and
to file  the  same,  with all  exhibits  thereto,  and all  other  documents  in
connection therewith, with the Securities and Exchange Commission and applicable
stock  exchanges,  with the full power and  authority to do and perform each and
every act and thing  necessary  or  advisable  to all intents and purposes as he
might or could do in  person,  hereby  ratifying  and  confirming  all that said
attorney-in-fact and agent or his substitute or substitutes,  may lawfully do or
cause to be done by virtue hereof.

Dated as of March 29, 2000.

/s/ Robert S. Silberman                         /s/ Larry Kellerman
ROBERT S. SILBERMAN                             LARRY KELLERMAN

/s/ Patrick J. Goodman                          /s/ John Harrison
PATRICK J. GOODMAN                              JOHN HARRISON

/s/ Joseph M. Lillo
JOSEPH M. LILLO



<PAGE>


                                                                    Exhibit 24

                                POWER OF ATTORNEY

         The  undersigned,  members of the Board of  Directors  and  Officers of
SALTON SEA FUNDING CORPORATION,  a Delaware corporation (the "Company"), and the
following companies:

         CalEnergy Minerals LLC
         Salton Sea Minerals Corp.


hereby  constitute  and appoint  Steven A.  McArthur and Douglas L. Anderson and
each of them, as his/her true and lawful  attorney-in-fact  and agent, with full
power of substitution and  resubstitution,  for and in his stead, in any and all
capacities,  to sign on his behalf the Company's Form 10-K Annual Report for the
fiscal year ending  December 31, 1999 and to execute any amendments  thereto and
to file  the  same,  with all  exhibits  thereto,  and all  other  documents  in
connection therewith, with the Securities and Exchange Commission and applicable
stock  exchanges,  with the full power and  authority to do and perform each and
every act and thing  necessary  or  advisable  to all intents and purposes as he
might or could do in  person,  hereby  ratifying  and  confirming  all that said
attorney-in-fact and agent or his substitute or substitutes,  may lawfully do or
cause to be done by virtue hereof.

Dated as of March 29, 2000.

/s/ Gregory E. Abel                             /s/ Joseph M. Lillo
GREGORY E. ABEL                                 JOSEPH M. LILLO

/s/ Patrick J. Goodman                          /s/ Robert S. Silberman
PATRICK J. GOODMAN                              ROBERT S. SILBERMAN


WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

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<S>                             <C>
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<FISCAL-YEAR-END>                              Dec-31-1999
<PERIOD-START>                                 Jan-1-1999
<PERIOD-END>                                   Dec-31-1999
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