content: Securities and Exchange Commission
  
                       Washington, DC  20549
  
                              Form 8-K
  
  
                           Current Report
  
               Pursuant to Section 13 to 15(d) of the
                    Securities Exchange Act 1934
  
  
                  Date of Report: August 21, 1996
                 (Date of earliest event reported)
  
  
  
                      CalEnergy Company, Inc.
       (Exact name of registrant as specified in its charter)
  
  
  
  Delaware                      1-9874            94-2213782
  (State of other          (Commission File    (IRS Employer
   jurisdiction of          Number)             Identification No.)
   incorporation)
  
  
  
  302 South 36th Street, Suite 400,       Omaha, NE        68131
  (Address of principal executive offices)               Zip Code
  
  
  
  
  Registrant's Telephone Number, including area code:(402) 341-4500
  
  
  
                                  N/A
  
  
  
  Item 5.  Other Events
  
       In connection with the "safe harbor" provisions of the
  Private Securities Litigation Reform Act of 1995 (the "Reform
  Act"), CalEnergy Company, Inc. (the "Company") is hereby filing
  cautionary statements identifying important factors that could
  cause the Company's actual results to differ materially from
  those projected in forward-looking statements of the Company made
  by or on behalf of the Company, whether oral or written.  The
  Company wishes to ensure that any forward-looking statements are
  accompanied by meaningful cautionary statements in order to
  maximize to the fullest extent possible the protections of the
  safe harbor established in the Reform Act.  Accordingly, any such
  statements are qualified in their entirety by reference to, and
  are accompanied by, the following important factors, among
  others, that could cause the Company's actual results to differ
  materially from those projected in forward-looking statements of
  the Company made by or on behalf of the Company.
  
       The Company cautions that the following important factors,
  among others (including but not limited to factors mentioned from
  time to time in the Company's reports filed with the Securities
  and Exchange Commission), could affect the Company's actual
  results and could cause the Company's actual consolidated results
  to differ materially from those expressed in any forward-looking
  statements of the Company made by or on behalf of the Company.
  The factors included here are not exhaustive.  Further, any
  forward-looking statement speaks only as of the date on which
  such statement is made, and the Company undertakes no obligation
  to update any forward-looking statement or statements to reflect
  events or circumstances after the date on which such statement is
  made or to reflect the occurrence of unanticipated events.  New
  factors emerge from time to time and it is not possible for
  management to predict all of such factors, nor can it assess the
  impact of each such factor on the business or the extent to which
  any factor, or combination of factors, may cause actual results
  to differ materially from those contained in any forward-looking
  statements.  Therefore, forward-looking statements should not be
  relied upon as a prediction of actual future results.
  
       1.   Development Uncertainty.  The Company is actively
  seeking to develop, construct, own and operate new power projects
  utilizing geothermal and other technologies, both domestically
  and internationally, the completion of any of which is subject to
  substantial risk.  The Company has in development or under
  construction projects representing several times the generating
  capacity of those currently in operation.  Development can
  require the Company to expend significant sums for preliminary
  engineering, permitting, fuel supply, resource exploration, legal
  and other expenses in preparation for competitive bids which the
  Company may not win or before it can be determined whether a
  project is feasible, economically attractive or capable of being
  financed.  Successful development and construction is contingent
  upon, among other things, negotiation on terms satisfactory to
  the Company of engineering, construction, fuel supply and power
  sales contracts with other project participants, receipt of
  required governmental permits and consents and timely
  implementation of construction.  Further, there can be no
  assurance that the Company, which is substantially leveraged,
  will obtain access to the substantial debt and equity capital
  required to continue to develop and construct electric power
  projects or to refinance projects.  The future growth of the
  Company is dependent, in large part, upon the demand for
  significant amounts of additional electrical generating capacity
  and its ability to obtain contracts to supply portions of this
  capacity.  There can be no assurance that development efforts on
  any particular project, or the Company's efforts generally, will
  be successful.
  
       2.   Development Uncertainty Outside the United States.  The
  Company has various projects under construction outside the
  United States and a number of projects under award outside the
  United States.  The financing and development of projects outside
  the United States entail significant political and financial
  risks (including without limitation uncertainties associated with
  privatization efforts in the countries involved, currency
  exchange rate fluctuations, currency repatriation restrictions,
  changes in law, political instability, civil unrest and
  expropriation) and other structuring issues that have the
  potential to cause substantial delays in respect of or material
  impairment of the value of the project being developed, which the
  Company may not be capable of fully insuring against.  The
  uncertainty of the legal environment in certain foreign countries
  in which the Company is developing and may develop or acquire
  projects could make it more difficult for the Company to enforce
  its rights under agreements relating to such projects.  In
  addition, the laws and regulations of certain countries may limit
  the ability of the Company to hold a majority interest in some of
  the projects that it may develop or acquire.  The Company's
  international projects may, in certain cases, be terminated by
  the applicable foreign governments.
  
       3.   Exploration, Development and Operation Uncertainties of
  Geothermal Resources.  Geothermal exploration, development and
  operations are subject to uncertainties 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, geothermal power production poses unusual risks of
  seismic activity.  Accordingly, there can be no assurance that
  earthquake, property damage or business interruption insurance
  will be adequate to cover all potential losses sustained in the
  event of serious seismic disturbances or that such insurance will
  be available on commercially reasonable terms.  The success of a
  geothermal project depends on the quality of the geothermal
  resource and operational factors relating to the extraction of
  the geothermal fluids involved in such project.  The quality of a
  geothermal resource is affected by a number of factors, including
  the size of the reservoir, the temperature and pressure of the
  geothermal fluids in such reservoir, the depth and capacity of
  the production and injection wells, the amount of dissolved
  solids and noncondensible gases contained in such geothermal
  fluids, and the permeability of the subsurface rock formations
  containing such geothermal resource, including the presence,
  extent and location of fractures in such rocks.  The quality of a
  geothermal resource may decline as a result of a number of
  factors, including the intrusion of lower-temperature fluid into
  the producing zone.  An incorrect estimate by the Company of the
  quality of a geothermal resource, or a decline in such quality,
  could have a material adverse effect on the Company's results of
  operations.  In addition, both the cost of operations and the
  operating performance of geothermal power plants may be adversely
  affected by a variety of resource operating factors.  Production
  and injection wells can require frequent maintenance or
  replacement.  Corrosion caused by high-temperature and high-
  salinity geothermal fluids may compel the replacement or repair
  of certain equipment, vessels or pipelines.  New production and
  injection wells may be required for the maintenance of operating
  levels, thereby requiring substantial capital expenditures.
  
       4.   General Operating Risks.  The operation of a power
  plant involves many risks, including the breakdown or failure of
  power generation equipment, pipelines, transmission lines or
  other equipment or processes, fuel interruption, and performance
  below expected levels of output or efficiency.  Each Facility may
  depend on a single or limited number of entities to purchase
  electricity or thermal energy, to supply water, to supply gas, to
  transport gas, to dispose of wastes or to wheel electricity.  The
  failure of any such purchasing utility, steam host, water or gas
  supplier, gas transporter, wheeling utility or other relevant
  project participant to fulfill its contractual obligations could
  have material adverse impact on the Company.
  
       5.   Present Dependence on Large Customer.  The Company
  currently relies on long-term power purchase "Interim Standard
  Offer No. 4" contracts (each, an "SO4 Agreement") with a large
  customer, Southern California Edison Company ("Edison") to
  generate a substantial portion of its operating revenues.  Any
  material failure by Edison to fulfill its contractual obligations
  under any of such contracts is likely to have a material adverse
  effect on the Company's results of operations.  Each of the
  Company's SO4 Agreements provides for both capacity payments and
  energy payments for a term of between 20 and 30 years.  During
  the first ten years of the term of each SO4 Agreement, energy
  payments are based on a pre-set schedule.  Thereafter, while the
  basis for the capacity payment remains the same, the required
  energy payment is Edison's then-current published avoided cost of
  energy ("Avoided Cost of Energy"), as determined by the
  California Public Utility Commission ("CPUC").
  
            Estimates of Edison's future Avoided Cost of Energy
  vary substantially in any given year.  The Company cannot predict
  the likely level of Avoided Cost of Energy prices under its SO4
  Agreements with Edison at the expiration of the fixed-price
  periods.  Edison's Avoided Cost of Energy as determined by the
  CPUC is currently substantially below the current scheduled
  energy prices under the Company's respective SO4 Agreements and
  is currently expected to remain so.  Thus, the revenues generated
  by each of the Company's facilities operating under SO4
  Agreements are likely to decline significantly after the
  expiration of the applicable fixed price period.
  
       6.   Competition and Domestic Deregulation.  The
  international power production market is characterized by
  numerous strong and capable competitors, many of which have more
  extensive and more diversified developmental or operating
  experience (including international experience) and greater
  financial resources than the Company.  Many of these competitors
  also compete in the domestic market.  Further, in recent years,
  the domestic power production industry has been characterized by
  strong and increasing competition with respect to the industry's
  efforts to obtain new power sales agreements, which has
  contributed to a reduction in prices offered by utilities.  In
  that regard, many utilities often engage in "competitive bid"
  solicitations to satisfy new capacity demands.  In the domestic
  market, competition is expected to increase as the electric
  utility industry becomes deregulated.  In addition, deregulation
  activity may cause certain utilities or other project
  participants to attempt to renegotiate contracts or otherwise
  fail to perform their contractual obligations, which in turn
  could adversely affect the Company's results of operations.
  
       7.   Natural Gas Supply/Minimum Take Risks.  The primary
  fuel source for certain of the Company's projects is natural gas
  and a substantial portion of the operating expenses of such
  facilities consists of the costs of obtaining natural gas through
  gas supply agreements and transporting that gas to the projects
  under gas transportation agreements.  The Company believes it has
  contracted for natural gas supplies and transportation covering
  sufficient volumes to satisfy the long term fuel requirements of
  the applicable projects.  The obligations of gas suppliers are
  corporate undertakings that are not supported by dedicated
  reserves in all cases.  Unless the gas projects were able to
  obtain substitute volumes of natural gas, including the requisite
  transportation services for such volumes at a price not
  materially higher than the sum of the contract price under the
  existing gas supply agreements and any damages paid by the
  supplier for failure to deliver, the sustained failure of a
  supplier to comply with its obligation to deliver natural gas in
  accordance with its gas supply agreement, including as a result
  of its failure to maintain the necessary federal, state and
  provincial permits, could have a material adverse effect on the
  cash flows to the Company.
  
            Under certain gas supply agreements, if a project fails
  to purchase a minimum annual quality of natural gas, the project
  is obligated to pay an amount equal to the product of the
  deficiency amount and the applicable contract price.  In certain
  circumstances, utilities may curtail or schedule the projects for
  dispatch off-line.  Curtailment or low dispatch levels in
  combination with other events could result in the project's
  inability to satisfy minimum take provisions through the
  projects' fuel requirements.  The Company intends to manage its
  requirements for contract volumes under the gas supply agreements
  so as to meet the minimum take requirements through a combination
  of utilization of nominated volumes in operations and resales of
  the remainder of the volumes to third-party customers, if
  necessary.
  
            The transportation arrangements, including pipeline
  facilities and the rates charged for transportation services, are
  subject to various Federal, provincial, state and local
  authorities and, in the case of the Company's Saranac project,
  the Natural Energy Board of Canada.  In exercising such
  jurisdiction, these regulatory authorities maintain or may
  maintain authority to modify aspects of the rates, terms and
  conditions that govern the transportation services provided.  It
  is possible that such a modification could materially increase
  the fuel transportation costs of the projects.  In addition,
  certain of the natural gas transportation agreements, and the
  approved tariffs of the transporters, contain provisions that
  allow the transporter to terminate, or suspend performance under,
  or reduce the amount of gas transported for the projects under
  the agreement upon certain conditions, such as the taking of an
  adverse action by a regulatory authority or if the transporter,
  in its judgment, deems it necessary to make modifications or
  repairs to its pipeline facilities or upon the occurrence of an
  event of force majeure.  The sustained failure of any transporter
  to provide gas transportation services under its natural gas
  transportation agreement could have a material adverse effect on
  a power plant's operations.
  
       8.   Impact of Environmental and Other Regulations.  The
  Company is subject to a number of environmental and other laws
  and regulations affecting many aspects of its present and future
  operations, including the disposal of various forms of waste, the
  construction or permitting of new facilities, and the drilling
  and operation of new and existing wells.  Such laws and
  regulations generally require the Company to obtain and comply
  with a wide variety of licenses, permits and other approvals.
  The Company also remains subject to a number of complex and
  stringent laws and 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
  Company which could have an adverse impact on its operations.
  The implementation of regulatory changes imposing more
  comprehensive or stringent requirements on the Company, which
  would result in increased compliance costs, could have a material
  adverse effect on the Company's results of operations.  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 Public Utility Regulatory Policies Act of 1978, as
  amended ("PURPA") and the Public Utility Holding Company Act of
  1935, as amended ("PUHCA") are two of the laws (including the
  regulations thereunder) which affect the Company's operations.
  PURPA provides to qualifying facilities ("QFs") certain
  exemptions from federal and state laws and regulations, including
  organizational, rate and financial regulation.  PUHCA regulates
  public utility holding companies and their subsidiaries.  The
  Company is not and will not be subject to regulation as a holding
  company under PUHCA as long as the power plants it owns are QFs
  under PURPA.  QF status is conditioned on meeting certain
  criteria, and would be jeopardized, for example, by the loss of a
  steam customer or reduction of steam purchases below the amount
  required by PURPA.  The Company's four cogeneration facilities
  have steam sales agreements with existing industrial hosts which
  agreements must be maintained in effect in order to maintain QF
  status.  In the event the Company were unable to avoid the loss
  of such status for one of its facilities, such an event could
  result in termination of a given project's power sales agreement
  and a default under the project subsidiary's project financing
  agreements.
  
       9.   Leverage.  The Company is substantially leveraged.  The
  Company's substantial level of debt presents the risk that the
  Company may not generate sufficient cash to service the Company's
  indebtedness or that its leveraged capital structure could limit
  its ability to finance the acquisition and development of
  additional projects, to compete effectively or to operate
  successfully under adverse economic conditions.
  
       10.  Holding Company Structure.  The Company is a holding
  company which derives substantially all of its operating income
  from its subsidiaries' and joint ventures' ownership interests in
  the projects owned and operated by such entities.  The Company
  expects that its future development efforts will be similarly
  structured to involve operating subsidiaries, joint ventures and
  partnerships.  The Company must rely upon dividends and  other
  payments from its subsidiaries, partnerships and joint ventures
  to generate the funds necessary to meet its obligations,
  including the payment of principal, interest and premium, if any,
  on its debt securities.  Distributions from such entities are
  restricted under various covenants and conditions contained in
  the financing documents by which they are bound and pursuant to
  which the shares of stock or assets which are owned by the
  Company in such entities is directly or indirectly pledged to
  secure such financings.  The availability of distributions from
  the Company's projects are also subject to the satisfaction of
  various covenants and conditions contained in the applicable
  project documents and applicable shareholder, joint ventures,
  operating and partnership agreements relating to certain
  projects.  Furthermore, the Company is currently structuring
  project documents and project financing arrangements containing,
  and anticipates that future project level financings will
  contain, certain conditions and similar restrictions on the
  distribution of cash flow to the Company.  Any right of the
  Company to receive any assets of any of its subsidiaries or other
  affiliates upon any liquidation or reorganization of the Company
  will be effectively subordinated to the claims of any such
  subsidiary's or other affiliates' creditors (including trade
  creditors and holders of debt issued by such subsidiary or other
  affiliate).
  
                             SIGNATURE
  
  
       Pursuant to the requirements of the Securities Exchange Act
  of 1934, the Registrant has duly caused this report to be signed
  on its behalf by the undersigned hereunto duly authorized.
  
                                CalEnergy Company, Inc.
  
  
  
  
  By: \s\ Douglas L. Anderson
  Douglas L. Anderson
                                        Assistant Secretary
  
  
  
  Dated: August 21, 1996
metadata_documents: [{"type": "8-K", "sequence": "1", "secsgml_size_bytes": 21444}]
metadata_filer: {"company-data": {"conformed-name": "CALENERGY CO INC", "cik": "0000720556", "assigned-sic": "4991", "irs-number": "942213782", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-09874", "film-number": "96618693"}, "business-address": {"street1": "302 S 36TH ST", "street2": "STE 400", "city": "OMAHA", "state": "NE", "zip": "68131", "phone": "4023414500"}, "mail-address": {"street1": "302 SOUTH 36TH STREET", "street2": "SUITE 400-A", "city": "OMAHA", "state": "NE", "zip": "68131"}, "former-company": {"former-conformed-name": "CALIFORNIA ENERGY CO INC", "date-changed": "19920703"}}
text: Securities and Exchange Commission
  
                       Washington, DC  20549
  
                              Form 8-K
  
                           Current Report
  
               Pursuant to Section 13 to 15(d) of the
                    Securities Exchange Act 1934
  
                  Date of Report: August 21, 1996
                 (Date of earliest event reported)
  
                      CalEnergy Company, Inc.
       (Exact name of registrant as specified in its charter)
  
  Delaware                      1-9874            94-2213782
  (State of other          (Commission File    (IRS Employer
   jurisdiction of          Number)             Identification No.)
   incorporation)
  
  302 South 36th Street, Suite 400,       Omaha, NE        68131
  (Address of principal executive offices)               Zip Code
  
  Registrant's Telephone Number, including area code:(402) 341-4500
  
                                  N/A
  
  Item 5.  Other Events
  
       In connection with the "safe harbor" provisions of the
  Private Securities Litigation Reform Act of 1995 (the "Reform
  Act"), CalEnergy Company, Inc. (the "Company") is hereby filing
  cautionary statements identifying important factors that could
  cause the Company's actual results to differ materially from
  those projected in forward-looking statements of the Company made
  by or on behalf of the Company, whether oral or written.  The
  Company wishes to ensure that any forward-looking statements are
  accompanied by meaningful cautionary statements in order to
  maximize to the fullest extent possible the protections of the
  safe harbor established in the Reform Act.  Accordingly, any such
  statements are qualified in their entirety by reference to, and
  are accompanied by, the following important factors, among
  others, that could cause the Company's actual results to differ
  materially from those projected in forward-looking statements of
  the Company made by or on behalf of the Company.
  
       The Company cautions that the following important factors,
  among others (including but not limited to factors mentioned from
  time to time in the Company's reports filed with the Securities
  and Exchange Commission), could affect the Company's actual
  results and could cause the Company's actual consolidated results
  to differ materially from those expressed in any forward-looking
  statements of the Company made by or on behalf of the Company.
  The factors included here are not exhaustive.  Further, any
  forward-looking statement speaks only as of the date on which
  such statement is made, and the Company undertakes no obligation
  to update any forward-looking statement or statements to reflect
  events or circumstances after the date on which such statement is
  made or to reflect the occurrence of unanticipated events.  New
  factors emerge from time to time and it is not possible for
  management to predict all of such factors, nor can it assess the
  impact of each such factor on the business or the extent to which
  any factor, or combination of factors, may cause actual results
  to differ materially from those contained in any forward-looking
  statements.  Therefore, forward-looking statements should not be
  relied upon as a prediction of actual future results.
  
       1.   Development Uncertainty.  The Company is actively
  seeking to develop, construct, own and operate new power projects
  utilizing geothermal and other technologies, both domestically
  and internationally, the completion of any of which is subject to
  substantial risk.  The Company has in development or under
  construction projects representing several times the generating
  capacity of those currently in operation.  Development can
  require the Company to expend significant sums for preliminary
  engineering, permitting, fuel supply, resource exploration, legal
  and other expenses in preparation for competitive bids which the
  Company may not win or before it can be determined whether a
  project is feasible, economically attractive or capable of being
  financed.  Successful development and construction is contingent
  upon, among other things, negotiation on terms satisfactory to
  the Company of engineering, construction, fuel supply and power
  sales contracts with other project participants, receipt of
  required governmental permits and consents and timely
  implementation of construction.  Further, there can be no
  assurance that the Company, which is substantially leveraged,
  will obtain access to the substantial debt and equity capital
  required to continue to develop and construct electric power
  projects or to refinance projects.  The future growth of the
  Company is dependent, in large part, upon the demand for
  significant amounts of additional electrical generating capacity
  and its ability to obtain contracts to supply portions of this
  capacity.  There can be no assurance that development efforts on
  any particular project, or the Company's efforts generally, will
  be successful.
  
       2.   Development Uncertainty Outside the United States.  The
  Company has various projects under construction outside the
  United States and a number of projects under award outside the
  United States.  The financing and development of projects outside
  the United States entail significant political and financial
  risks (including without limitation uncertainties associated with
  privatization efforts in the countries involved, currency
  exchange rate fluctuations, currency repatriation restrictions,
  changes in law, political instability, civil unrest and
  expropriation) and other structuring issues that have the
  potential to cause substantial delays in respect of or material
  impairment of the value of the project being developed, which the
  Company may not be capable of fully insuring against.  The
  uncertainty of the legal environment in certain foreign countries
  in which the Company is developing and may develop or acquire
  projects could make it more difficult for the Company to enforce
  its rights under agreements relating to such projects.  In
  addition, the laws and regulations of certain countries may limit
  the ability of the Company to hold a majority interest in some of
  the projects that it may develop or acquire.  The Company's
  international projects may, in certain cases, be terminated by
  the applicable foreign governments.
  
       3.   Exploration, Development and Operation Uncertainties of
  Geothermal Resources.  Geothermal exploration, development and
  operations are subject to uncertainties 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, geothermal power production poses unusual risks of
  seismic activity.  Accordingly, there can be no assurance that
  earthquake, property damage or business interruption insurance
  will be adequate to cover all potential losses sustained in the
  event of serious seismic disturbances or that such insurance will
  be available on commercially reasonable terms.  The success of a
  geothermal project depends on the quality of the geothermal
  resource and operational factors relating to the extraction of
  the geothermal fluids involved in such project.  The quality of a
  geothermal resource is affected by a number of factors, including
  the size of the reservoir, the temperature and pressure of the
  geothermal fluids in such reservoir, the depth and capacity of
  the production and injection wells, the amount of dissolved
  solids and noncondensible gases contained in such geothermal
  fluids, and the permeability of the subsurface rock formations
  containing such geothermal resource, including the presence,
  extent and location of fractures in such rocks.  The quality of a
  geothermal resource may decline as a result of a number of
  factors, including the intrusion of lower-temperature fluid into
  the producing zone.  An incorrect estimate by the Company of the
  quality of a geothermal resource, or a decline in such quality,
  could have a material adverse effect on the Company's results of
  operations.  In addition, both the cost of operations and the
  operating performance of geothermal power plants may be adversely
  affected by a variety of resource operating factors.  Production
  and injection wells can require frequent maintenance or
  replacement.  Corrosion caused by high-temperature and high-
  salinity geothermal fluids may compel the replacement or repair
  of certain equipment, vessels or pipelines.  New production and
  injection wells may be required for the maintenance of operating
  levels, thereby requiring substantial capital expenditures.
  
       4.   General Operating Risks.  The operation of a power
  plant involves many risks, including the breakdown or failure of
  power generation equipment, pipelines, transmission lines or
  other equipment or processes, fuel interruption, and performance
  below expected levels of output or efficiency.  Each Facility may
  depend on a single or limited number of entities to purchase
  electricity or thermal energy, to supply water, to supply gas, to
  transport gas, to dispose of wastes or to wheel electricity.  The
  failure of any such purchasing utility, steam host, water or gas
  supplier, gas transporter, wheeling utility or other relevant
  project participant to fulfill its contractual obligations could
  have material adverse impact on the Company.
  
       5.   Present Dependence on Large Customer.  The Company
  currently relies on long-term power purchase "Interim Standard
  Offer No. 4" contracts (each, an "SO4 Agreement") with a large
  customer, Southern California Edison Company ("Edison") to
  generate a substantial portion of its operating revenues.  Any
  material failure by Edison to fulfill its contractual obligations
  under any of such contracts is likely to have a material adverse
  effect on the Company's results of operations.  Each of the
  Company's SO4 Agreements provides for both capacity payments and
  energy payments for a term of between 20 and 30 years.  During
  the first ten years of the term of each SO4 Agreement, energy
  payments are based on a pre-set schedule.  Thereafter, while the
  basis for the capacity payment remains the same, the required
  energy payment is Edison's then-current published avoided cost of
  energy ("Avoided Cost of Energy"), as determined by the
  California Public Utility Commission ("CPUC").
  
            Estimates of Edison's future Avoided Cost of Energy
  vary substantially in any given year.  The Company cannot predict
  the likely level of Avoided Cost of Energy prices under its SO4
  Agreements with Edison at the expiration of the fixed-price
  periods.  Edison's Avoided Cost of Energy as determined by the
  CPUC is currently substantially below the current scheduled
  energy prices under the Company's respective SO4 Agreements and
  is currently expected to remain so.  Thus, the revenues generated
  by each of the Company's facilities operating under SO4
  Agreements are likely to decline significantly after the
  expiration of the applicable fixed price period.
  
       6.   Competition and Domestic Deregulation.  The
  international power production market is characterized by
  numerous strong and capable competitors, many of which have more
  extensive and more diversified developmental or operating
  experience (including international experience) and greater
  financial resources than the Company.  Many of these competitors
  also compete in the domestic market.  Further, in recent years,
  the domestic power production industry has been characterized by
  strong and increasing competition with respect to the industry's
  efforts to obtain new power sales agreements, which has
  contributed to a reduction in prices offered by utilities.  In
  that regard, many utilities often engage in "competitive bid"
  solicitations to satisfy new capacity demands.  In the domestic
  market, competition is expected to increase as the electric
  utility industry becomes deregulated.  In addition, deregulation
  activity may cause certain utilities or other project
  participants to attempt to renegotiate contracts or otherwise
  fail to perform their contractual obligations, which in turn
  could adversely affect the Company's results of operations.
  
       7.   Natural Gas Supply/Minimum Take Risks.  The primary
  fuel source for certain of the Company's projects is natural gas
  and a substantial portion of the operating expenses of such
  facilities consists of the costs of obtaining natural gas through
  gas supply agreements and transporting that gas to the projects
  under gas transportation agreements.  The Company believes it has
  contracted for natural gas supplies and transportation covering
  sufficient volumes to satisfy the long term fuel requirements of
  the applicable projects.  The obligations of gas suppliers are
  corporate undertakings that are not supported by dedicated
  reserves in all cases.  Unless the gas projects were able to
  obtain substitute volumes of natural gas, including the requisite
  transportation services for such volumes at a price not
  materially higher than the sum of the contract price under the
  existing gas supply agreements and any damages paid by the
  supplier for failure to deliver, the sustained failure of a
  supplier to comply with its obligation to deliver natural gas in
  accordance with its gas supply agreement, including as a result
  of its failure to maintain the necessary federal, state and
  provincial permits, could have a material adverse effect on the
  cash flows to the Company.
  
            Under certain gas supply agreements, if a project fails
  to purchase a minimum annual quality of natural gas, the project
  is obligated to pay an amount equal to the product of the
  deficiency amount and the applicable contract price.  In certain
  circumstances, utilities may curtail or schedule the projects for
  dispatch off-line.  Curtailment or low dispatch levels in
  combination with other events could result in the project's
  inability to satisfy minimum take provisions through the
  projects' fuel requirements.  The Company intends to manage its
  requirements for contract volumes under the gas supply agreements
  so as to meet the minimum take requirements through a combination
  of utilization of nominated volumes in operations and resales of
  the remainder of the volumes to third-party customers, if
  necessary.
  
            The transportation arrangements, including pipeline
  facilities and the rates charged for transportation services, are
  subject to various Federal, provincial, state and local
  authorities and, in the case of the Company's Saranac project,
  the Natural Energy Board of Canada.  In exercising such
  jurisdiction, these regulatory authorities maintain or may
  maintain authority to modify aspects of the rates, terms and
  conditions that govern the transportation services provided.  It
  is possible that such a modification could materially increase
  the fuel transportation costs of the projects.  In addition,
  certain of the natural gas transportation agreements, and the
  approved tariffs of the transporters, contain provisions that
  allow the transporter to terminate, or suspend performance under,
  or reduce the amount of gas transported for the projects under
  the agreement upon certain conditions, such as the taking of an
  adverse action by a regulatory authority or if the transporter,
  in its judgment, deems it necessary to make modifications or
  repairs to its pipeline facilities or upon the occurrence of an
  event of force majeure.  The sustained failure of any transporter
  to provide gas transportation services under its natural gas
  transportation agreement could have a material adverse effect on
  a power plant's operations.
  
       8.   Impact of Environmental and Other Regulations.  The
  Company is subject to a number of environmental and other laws
  and regulations affecting many aspects of its present and future
  operations, including the disposal of various forms of waste, the
  construction or permitting of new facilities, and the drilling
  and operation of new and existing wells.  Such laws and
  regulations generally require the Company to obtain and comply
  with a wide variety of licenses, permits and other approvals.
  The Company also remains subject to a number of complex and
  stringent laws and 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
  Company which could have an adverse impact on its operations.
  The implementation of regulatory changes imposing more
  comprehensive or stringent requirements on the Company, which
  would result in increased compliance costs, could have a material
  adverse effect on the Company's results of operations.  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 Public Utility Regulatory Policies Act of 1978, as
  amended ("PURPA") and the Public Utility Holding Company Act of
  1935, as amended ("PUHCA") are two of the laws (including the
  regulations thereunder) which affect the Company's operations.
  PURPA provides to qualifying facilities ("QFs") certain
  exemptions from federal and state laws and regulations, including
  organizational, rate and financial regulation.  PUHCA regulates
  public utility holding companies and their subsidiaries.  The
  Company is not and will not be subject to regulation as a holding
  company under PUHCA as long as the power plants it owns are QFs
  under PURPA.  QF status is conditioned on meeting certain
  criteria, and would be jeopardized, for example, by the loss of a
  steam customer or reduction of steam purchases below the amount
  required by PURPA.  The Company's four cogeneration facilities
  have steam sales agreements with existing industrial hosts which
  agreements must be maintained in effect in order to maintain QF
  status.  In the event the Company were unable to avoid the loss
  of such status for one of its facilities, such an event could
  result in termination of a given project's power sales agreement
  and a default under the project subsidiary's project financing
  agreements.
  
       9.   Leverage.  The Company is substantially leveraged.  The
  Company's substantial level of debt presents the risk that the
  Company may not generate sufficient cash to service the Company's
  indebtedness or that its leveraged capital structure could limit
  its ability to finance the acquisition and development of
  additional projects, to compete effectively or to operate
  successfully under adverse economic conditions.
  
       10.  Holding Company Structure.  The Company is a holding
  company which derives substantially all of its operating income
  from its subsidiaries' and joint ventures' ownership interests in
  the projects owned and operated by such entities.  The Company
  expects that its future development efforts will be similarly
  structured to involve operating subsidiaries, joint ventures and
  partnerships.  The Company must rely upon dividends and  other
  payments from its subsidiaries, partnerships and joint ventures
  to generate the funds necessary to meet its obligations,
  including the payment of principal, interest and premium, if any,
  on its debt securities.  Distributions from such entities are
  restricted under various covenants and conditions contained in
  the financing documents by which they are bound and pursuant to
  which the shares of stock or assets which are owned by the
  Company in such entities is directly or indirectly pledged to
  secure such financings.  The availability of distributions from
  the Company's projects are also subject to the satisfaction of
  various covenants and conditions contained in the applicable
  project documents and applicable shareholder, joint ventures,
  operating and partnership agreements relating to certain
  projects.  Furthermore, the Company is currently structuring
  project documents and project financing arrangements containing,
  and anticipates that future project level financings will
  contain, certain conditions and similar restrictions on the
  distribution of cash flow to the Company.  Any right of the
  Company to receive any assets of any of its subsidiaries or other
  affiliates upon any liquidation or reorganization of the Company
  will be effectively subordinated to the claims of any such
  subsidiary's or other affiliates' creditors (including trade
  creditors and holders of debt issued by such subsidiary or other
  affiliate).
  
                             SIGNATURE
  
       Pursuant to the requirements of the Securities Exchange Act
  of 1934, the Registrant has duly caused this report to be signed
  on its behalf by the undersigned hereunto duly authorized.
  
                                CalEnergy Company, Inc.
  
  By: \s\ Douglas L. Anderson
  Douglas L. Anderson
                                        Assistant Secretary
  
  Dated: August 21, 1996