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  s:\legal\february97\8ksec97.doc
                                  
                              FORM 8-K
                                  
                 SECURITIES AND EXCHANGE COMMISSION
  
                       Washington, D.C. 20549
                                  
                           CURRENT REPORT
                                  
                  Pursuant to Section 13 or 15 (d)
               of the Securities Exchange Act of 1934
                                  
   Date of Report (Date of earliest event reported):  February 25
                                1997
                                  
                       CalEnergy Company, Inc.
       (Exact name of registrant as specified in its charter)
                                  
                              Delaware
           (State of other jurisdiction of incorporation)
                                  
                 1-9874                   94-2213782
  (Commission File Number)     (I.R.S. Employer Identification No.)
                                  
            302 South 36th Street, Omaha, Nebraska 68131
              (Address of principal executive offices)
                                  
   Registrant's telephone number, including area code:  (402) 341-
                                4500
                                  
                           Not Applicable
   (Former name or former address, if changed since last report.)
                                  
                                  
  Item 5.   Other Events.
  
       (a)  Cautionary Statements.  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.   Acquisitions.  The Company's recent growth has been
  achieved, in part, through strategic acquisitions in the energy
  industry which complement and diversify the Company's existing
  business.  The Company intends to continue to pursue an
  aggressive acquisition strategy for the foreseeable future.  The
  Company's ability to pursue acquisition opportunities
  successfully will depend on many factors, including, among
  others, the Company's ability to (i) identify suitable
  acquisition opportunities, (ii) consummate the acquisition,
  including obtaining any necessary financing, and (iii)
  successfully integrate acquired businesses.  The integration of
  acquired businesses entails numerous risks, including, among
  others, the risk of diverting management's attention from the day-
  to-day operations of the Company, the risk that the acquired
  businesses will require substantial capital and financial
  investments and the risk that the investments will fail to
  perform in accordance with expectations.  There can be no
  assurance that future acquisition opportunities, if any, can be
  consummated on favorable terms or that the Company's integration
  efforts will be successful.
  
       2.   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 an aggregate generating
  capacity in excess of 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.
  
       3.   Uncertainties Related to Doing Business 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.
  Furthermore, the central bank of any such country may have the
  authority in certain circumstances to suspend, restrict or
  otherwise impose conditions on foreign exchange transactions or
  to approve distributions to foreign investors.  Although the
  Company may structure certain power purchase agreements and other
  project revenue agreements to provide for payments to be made in,
  or indexed to, United States dollars or a currency freely
  convertible into United States dollars, there can be no assurance
  that the Company will be able to achieve this structure in all
  cases or that a power purchaser or other customer will be able to
  obtain sufficient dollars or other hard currency or that
  available dollars will be allocated to pay such obligations.  In
  addition, the Company's investment in Northern Electric plc
  ("Northern") and any dividends or distributions of earnings in
  respect of such investment, may be significantly affected by
  fluctuations in the exchange rate between the United States
  dollar and the British pound.  Although the Company expects to
  enter into certain transactions to hedge risks associated with
  exchange rate fluctuations, there can be no assurance that such
  transactions will be successful in reducing such risks.
  
       4.   Leverage.  The Company is substantially leveraged.  The
  Company's substantial level of debt presents the risk that the
  Company might not generate sufficient cash to service the
  Company's indebtedness or that its leveraged capital structure
  could limit its ability to finance future acquisitions, develop
  additional projects, compete effectively and operate successfully
  under adverse economic conditions.
  
       5.   Holding Company Structure.  The Company is a holding
  company which derives substantially all of its operating income
  from its subsidiaries and joint ventures.  The Company expects
  that its future development efforts will be similarly structured
  to involve operating subsidiaries and joint ventures.  The
  Company is dependent on the earnings and cash flows of, and
  dividends from, its subsidiaries and joint ventures to generate
  the funds necessary to meet its obligations.  The availability of
  distributions from such entities is subject to the satisfaction
  of various covenants and conditions contained in the applicable
  subsidiaries' and joint ventures' financing documents and to
  certain utility regulatory restrictions.  Furthermore, the
  Company is structuring Philippine and Indonesia project financing
  arrangements containing, and anticipates that future project
  level financing will contain, certain conditions and similar
  restrictions on the distribution of cash 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).
  
  
       6.   Northern's Regulatory Environment.  Northern's
  electricity distribution and supply are subject to extensive
  regulation in the United Kingdom.
  
            Pricing Regulation of Distribution.  Revenue from
       Northern's distribution business is controlled by a
       "Distribution Price Control Formula."  The Distribution
       Price Control Formula determines the maximum average price
       per unit of electricity that a regional electricity company
       in the United Kingdom may charge.  The Distribution Price
       Control Formula is subject to review by the Director General
       of Electricity Supply (the "Regulator").  At each review the
       Regulator can propose adjustments to the Distribution Price
       Control Formula.  There can be no assurance that any future
       price reviews by the Regulator will not have a material
       adverse effect on Northern's results of operations.
  
            Competition in Supply.  Northern's supply business is
       also subject to price control and is being progressively
       opened to competition.  Northern currently has an exclusive
       right, subject to price cap regulation, to supply customers
       in its authorized area with a maximum demand of not more
       than 100 kW ("Franchise Supply Customers").  The market for
       customers with a maximum demand above 1 MW has been open to
       competition for suppliers of electricity since privatization
       while the market for customers with a maximum demand above
       100 kW ("Non-Franchise Supply Customers") became competitive
       in April 1994.  The final stage of this process is expected
       to occur on March 31, 1998, when the exclusive right to
       supply Franchise Supply Customers is scheduled to end.
       There can be no assurance that competition among suppliers
       of electricity will not have a material adverse effect on
       the Company's results of operations.
  
            Pool Purchase Price Volatility.  Northern's supply
       business to Non-Franchise Supply Customers generally
       involves entering into fixed price contracts to supply
       electricity to its customers.  Northern obtains the
       electricity to satisfy its obligations under such contracts
       primarily by purchases from the wholesale trading market for
       electricity in England and Wales (the "Pool").  Because the
       price of electricity purchased from the Pool can be
       volatile, to the extent that Northern purchases electricity
       from the Pool, Northern is exposed to risk arising from
       differences between the fixed price at which it sells and
       the fluctuating prices at which it purchases electricity,
       unless it can effectively hedge such exposure.  Northern's
       ability to manage such risk at acceptable levels will
       depend, in part, on the specifics of the supply contracts
       that Northern enters into, Northern's ability to implement
       and manage an appropriate hedging strategy and the
       development of an adequate market for hedging instruments.
       There can be no assurance that this risk will be effectively
       mitigated.
  
            Change in Government Policy.  The Conservative Party
       has held power in the United Kingdom since 1979 and
       currently has a one-seat majority over all parties.  The
       next general election in the United Kingdom must be held no
       later than May 1997, and may be called at approximately
       three weeks' notice at any time before then.  Certain senior
       members of the Labour Party, which is the main opposition
       party, have recently made statements regarding policies
       which a Labour government might introduce, including a
       windfall assessment proposed to be levied on privatized
       utilities and referring the whole electricity industry to
       the competition authorities.  There can be no assurance that
       the policies of the United Kingdom government, by whichever
       party it is controlled, would not cause a material adverse
       effect on Northern's results of operations.
  
  
       7.   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, and 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 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.
  
       8.   General Operating Uncertainties.  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 a material adverse impact on the Company.
  
       9.   Fuel Supply Operations.  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.  Although the Company believes that it
  has contracted for natural gas supply and transportation in
  sufficient quantities to satisfy the needs of its projects, the
  gas suppliers are not required in all cases to provide dedicated
  reserves in support of their contractual obligations.  If a
  supplier were not able to obtain substitute volumes of natural
  gas and the transportation services necessary to deliver them at
  a price acceptable to it, the failure of that supplier to deliver
  natural gas in accordance with its contract could have a material
  adverse effect on the cash flows to the Company.  In addition,
  under certain gas supply contracts the Company is obligated to
  pay for a certain minimum quantity of natural gas even if it
  cannot utilize it, as could occur as a result of curtailment of
  electricity deliveries by a utility purchaser.  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.  Finally, the state, federal and
  foreign regulatory authorities that have jurisdiction over
  natural gas transportation have the right to modify aspects of
  the rates, terms and conditions of those contracts.  It is
  possible that such a modification could materially increase the
  fuel transportation costs of the projects or give the transporter
  a right to terminate or suspend or decrease its performance under
  its contract.
  
       10.  Present Dependence on Large Customer; Contract Risks.
  The Company currently relies on long-term power purchase
  "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 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 after achieving firm operation, energy payments under
  each SO4 Agreement 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.
  
       11.  Competition and Domestic Deregulation; Industry
  Restructuring.  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 to
  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,
  recent deregulation and industry restructuring activity may cause
  certain utilities or other contract parties 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.
  
       12.  Impact of Environmental, Energy 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) that 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 domestic power plants it owns
  are QFs under PURPA or are exempted as exempt wholesale
  generators ("EWGs"), and so long as its foreign utility
  operations are exempted as EWGs or foreign utility companies or
  are otherwise exempted under PUHCA.  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 or
  replaced 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.
  
  
  
       (b)  Casecnan. In November 1995, the Company closed the
  financing and commenced construction of the Casecnan Project, a
  combined irrigation and 150 net MW hydroelectric power generation
  project (the "Casecnan Project") located in the central part of
  the island of Luzon in the Republic of the Philippines.  The
  Casecnan Project will consist generally of diversion structures
  in the Casecnan and Denip Rivers that will divert water into a
  tunnel of approximately 23 kilometers.  The tunnel will transfer
  the water from the Casecnan and Denip Rivers in the Pantabangan
  Reservoir for irrigation and hydroelectric use in the Central
  Luzon area.  An underground powerhouse located at the end of the
  water tunnel and before the Pantabangan Reservoir will house a
  power plant consisting of approximately 150 MW of newly installed
  rated electrical capacity.  A tailrace tunnel of approximately
  three kilometers will deliver water from the water tunnel and the
  new powerhouse to the Pantabangan Reservoir, providing additional
  water for irrigation and increasing the potential electrical
  generation at two downstream existing hydroelectric facilities of
  the National Power Corporation of the Philippines ("NPC").
  
       CE Casecnan Water and Energy Company, Inc., a Philippine
  corporation ("CE Casecnan") which is presently indirectly owned
  as to approximately 35% of its equity by the Company and
  approximately 35% indirectly owned by Peter Kiewit Sons' Inc., is
  developing the Casecnan Project under the terms of the Project
  Agreement between CE Casecnan and the National Irrigation
  Administration ("NIA").  Under the Project Agreement, CE Casecnan
  will develop, finance and construct the Casecnan Project over an
  estimated four-year construction period, and thereafter own and
  operate the Casecnan Project for 20 years (the "Cooperation
  Period").  During the Cooperation Period, NIA is obligated to
  accept all deliveries of water and energy, and so long as the
  Casecnan Project is physically capable of operating and
  delivering in accordance with agreed levels set forth in the
  Project Agreement, NIA will pay CE Casecnan a guaranteed fee for
  the delivery of water and a guaranteed fee for the delivery of
  electricity, regardless of the amount of water or electricity
  actually delivered.  In addition, NIA will pay a fee for all
  electricity delivered in excess of a threshold amount up to a
  specified amount.  NIA will sell the electric energy it purchases
  to NPC, although NIA's obligations to CE Casecnan under the
  Project Agreement are not dependent on NPC's purchase of the
  electricity from NIA.  All fees to be paid by NIA to CE Casecnan
  are payable in U.S. dollars.  The guaranteed fees for the
  delivery of water and energy are expected to provide
  approximately 70% of CE Casecnan's revenues.
  
       The Project Agreement provides for additional compensation
  to the CE Casecnan upon the occurrence of certain events,
  including increases in Philippine taxes and adverse changes in
  Philippine law.  Upon the occurrence and during the continuance
  of certain force majeure events, including those associated with
  Philippines political action, NIA may be obligated to buy the
  Casecnan Project from CE Casecnan at a buy out price expected to
  be in excess of the aggregate principal amount of the outstanding
  CE Casecnan debt securities, together with accrued but unpaid
  interest.  At the end of the Cooperation Period, the Casecnan
  Project will be transferred to NIA and NPC for no additional
  consideration on an "as is" basis.
  
       The Republic of the Philippines has provided a Performance
  Undertaking under which NIA's obligations under the Project
  Agreement are guaranteed by the full faith and credit of the
  Republic of the Philippines.  The Project Agreement and the
  Performance Undertaking provide for the resolution of disputes by
  binding arbitration in Singapore under international arbitration
  rules.
  
       The Casecnan Project is being constructed on a joint and
  several basis by Hanbo Corporation and Hanbo Engineering &
  Construction Co. Ltd. (formerly known as You One Engineering &
  Construction Co., Ltd., and herein referred to as "HECC"), both
  of which are South Korean corporations, pursuant to a fixed-
  price, date-certain, turnkey construction contract (the "Turnkey
  Construction Contract").  Hanbo Corporation and HECC (sometimes
  collectively referred to as the "Contractor") are under common
  ownership control.  Hanbo Corporation is an international
  construction company.  HECC, which recently emerged from a court-
  administered receivership, is a contractor with over 25 years
  experience in tunnel construction, using both the drill-and-blast
  and tunnel boring machine ("TBM") methods.
  
       The Contractor's obligations under the Turnkey Construction
  Contract are guaranteed by Hanbo Iron & Steel Company, Ltd.
  ("Hanbo Steel"), a large South Korean steel company.  In
  addition, the Contractor's obligations under the Turnkey
  Construction Contract are secured by an unconditional,
  irrevocable standby letter of credit issued by Korea First Bank
  ("KFB") in the approximate amount of $118 million.  The total
  cost of the Casecnan Project, including development,
  construction, testing and startup, is estimated to be
  approximately $495 million.
  
       The Company was recently advised that Hanbo Corporation and
  Hanbo Steel had each filed to seek court receivership protection
  in Korea.  At the present time, all of the construction work on
  the Casecnan Project is being performed by the second contractor
  which is party to the Turnkey Construction Contract, HECC.
  Although HECC, Hanbo Corporation and Hanbo Steel are under common
  ownership control, HECC has not filed for receivership protection
  and is believed to be solvent.  However, no assurances can be
  given that HECC will not file for receivership due to the
  foregoing developments or that it will remain solvent and able to
  perform fully its obligations under the Turnkey Construction
  Contract.
  
       The work on the Casecnan Project, which commenced in 1995,
  is presently continuing on schedule and within the budget.  CE
  Casecnan is presently reviewing its rights, obligations and
  potential remedies in respect of the recent developments
  regarding the co-Contractor and the guarantor and is presently
  unable to speculate as to the ultimate effect of such
  developments on CE Casecnan.  However, CE Casecnan has recently
  received confirmation from HECC that it intends to fully perform
  its obligations under the Turnkey Construction Contract and
  complete the Casecnan Project on schedule and within the budget.
  Additionally, it has been reported that the South Korean
  government has informed the Philippine government that the South
  Korean government will take appropriate actions to support HECC's
  completion of the Casecnan Project.
  
       KFB has recently reconfirmed to CE Casecnan that it will
  honor its obligations under the Casecnan Project letter of credit
  and also has stated its support for the successful completion of
  the Casecnan Project.  However, Moody's Investors Service has
  recently issued a warning for a possible ratings downgrade for
  Korea First Bank because of the possible impact of the Hanbo
  Steel receivership on the substantial loans KFB previously made
  to Hanbo Steel.  In a related development, the South Korean
  government has recently announced that it would provide some
  funding to assist Hanbo Steel's creditor banks (including Korea
  First Bank) and its subcontractors.
  
       CE Casecnan financed a portion of the costs of the Casecnan
  Project through the issuance of $125,000,000 of its 11.45% Senior
  Secured Series A Notes due 2005 and $171,500,000 of its 11.95%
  Senior Secured Series B Notes due 2010 pursuant to an indenture
  dated November 27, 1995, as amended to date (the "Casecnan
  Indenture").  Although no default has occurred under the Casecnan
  Indenture as a result of the announced receivership of Hanbo
  Corporation, CE Casecnan will continue to closely monitor the
  Hanbo group and KFB developments and project construction status
  and develop appropriate contingency plans.
  
       If HECC were to materially fail to perform its obligations
  under the Turnkey Construction Contract and if KFB were to fail
  to honor its obligations under the Casecnan letter of credit,
  such actions could have a material adverse effect on the Casecnan
  Project and CE Casecnan.  However, based on the information
  presently available to it, CE Casecnan does not presently expect
  that either such event will occur.
  
  
                             SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act
  of 1934, the registrant has duly caused this report to be signed
  on its behalf by the undersigned thereunto duly authorized.
  
                                CALENERGY COMPANY, INC.
  
  Dated:  February 25 1997           By:  /s/  Steven A. McArthur
                                     Steven A. McArthur
                                     Senior Vice President
                                     and General Counsel
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text: 1
  s:\legal\february97\8ksec97.doc
                                  
                              FORM 8-K
                                  
                 SECURITIES AND EXCHANGE COMMISSION
  
                       Washington, D.C. 20549
                                  
                           CURRENT REPORT
                                  
                  Pursuant to Section 13 or 15 (d)
               of the Securities Exchange Act of 1934
                                  
   Date of Report (Date of earliest event reported):  February 25
                                1997
                                  
                       CalEnergy Company, Inc.
       (Exact name of registrant as specified in its charter)
                                  
                              Delaware
           (State of other jurisdiction of incorporation)
                                  
                 1-9874                   94-2213782
  (Commission File Number)     (I.R.S. Employer Identification No.)
                                  
            302 South 36th Street, Omaha, Nebraska 68131
              (Address of principal executive offices)
                                  
   Registrant's telephone number, including area code:  (402) 341-
                                4500
                                  
                           Not Applicable
   (Former name or former address, if changed since last report.)
                                  
                                  
  Item 5.   Other Events.
  
       (a)  Cautionary Statements.  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.   Acquisitions.  The Company's recent growth has been
  achieved, in part, through strategic acquisitions in the energy
  industry which complement and diversify the Company's existing
  business.  The Company intends to continue to pursue an
  aggressive acquisition strategy for the foreseeable future.  The
  Company's ability to pursue acquisition opportunities
  successfully will depend on many factors, including, among
  others, the Company's ability to (i) identify suitable
  acquisition opportunities, (ii) consummate the acquisition,
  including obtaining any necessary financing, and (iii)
  successfully integrate acquired businesses.  The integration of
  acquired businesses entails numerous risks, including, among
  others, the risk of diverting management's attention from the day-
  to-day operations of the Company, the risk that the acquired
  businesses will require substantial capital and financial
  investments and the risk that the investments will fail to
  perform in accordance with expectations.  There can be no
  assurance that future acquisition opportunities, if any, can be
  consummated on favorable terms or that the Company's integration
  efforts will be successful.
  
       2.   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 an aggregate generating
  capacity in excess of 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.
  
       3.   Uncertainties Related to Doing Business 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.
  Furthermore, the central bank of any such country may have the
  authority in certain circumstances to suspend, restrict or
  otherwise impose conditions on foreign exchange transactions or
  to approve distributions to foreign investors.  Although the
  Company may structure certain power purchase agreements and other
  project revenue agreements to provide for payments to be made in,
  or indexed to, United States dollars or a currency freely
  convertible into United States dollars, there can be no assurance
  that the Company will be able to achieve this structure in all
  cases or that a power purchaser or other customer will be able to
  obtain sufficient dollars or other hard currency or that
  available dollars will be allocated to pay such obligations.  In
  addition, the Company's investment in Northern Electric plc
  ("Northern") and any dividends or distributions of earnings in
  respect of such investment, may be significantly affected by
  fluctuations in the exchange rate between the United States
  dollar and the British pound.  Although the Company expects to
  enter into certain transactions to hedge risks associated with
  exchange rate fluctuations, there can be no assurance that such
  transactions will be successful in reducing such risks.
  
       4.   Leverage.  The Company is substantially leveraged.  The
  Company's substantial level of debt presents the risk that the
  Company might not generate sufficient cash to service the
  Company's indebtedness or that its leveraged capital structure
  could limit its ability to finance future acquisitions, develop
  additional projects, compete effectively and operate successfully
  under adverse economic conditions.
  
       5.   Holding Company Structure.  The Company is a holding
  company which derives substantially all of its operating income
  from its subsidiaries and joint ventures.  The Company expects
  that its future development efforts will be similarly structured
  to involve operating subsidiaries and joint ventures.  The
  Company is dependent on the earnings and cash flows of, and
  dividends from, its subsidiaries and joint ventures to generate
  the funds necessary to meet its obligations.  The availability of
  distributions from such entities is subject to the satisfaction
  of various covenants and conditions contained in the applicable
  subsidiaries' and joint ventures' financing documents and to
  certain utility regulatory restrictions.  Furthermore, the
  Company is structuring Philippine and Indonesia project financing
  arrangements containing, and anticipates that future project
  level financing will contain, certain conditions and similar
  restrictions on the distribution of cash 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).
  
       6.   Northern's Regulatory Environment.  Northern's
  electricity distribution and supply are subject to extensive
  regulation in the United Kingdom.
  
            Pricing Regulation of Distribution.  Revenue from
       Northern's distribution business is controlled by a
       "Distribution Price Control Formula."  The Distribution
       Price Control Formula determines the maximum average price
       per unit of electricity that a regional electricity company
       in the United Kingdom may charge.  The Distribution Price
       Control Formula is subject to review by the Director General
       of Electricity Supply (the "Regulator").  At each review the
       Regulator can propose adjustments to the Distribution Price
       Control Formula.  There can be no assurance that any future
       price reviews by the Regulator will not have a material
       adverse effect on Northern's results of operations.
  
            Competition in Supply.  Northern's supply business is
       also subject to price control and is being progressively
       opened to competition.  Northern currently has an exclusive
       right, subject to price cap regulation, to supply customers
       in its authorized area with a maximum demand of not more
       than 100 kW ("Franchise Supply Customers").  The market for
       customers with a maximum demand above 1 MW has been open to
       competition for suppliers of electricity since privatization
       while the market for customers with a maximum demand above
       100 kW ("Non-Franchise Supply Customers") became competitive
       in April 1994.  The final stage of this process is expected
       to occur on March 31, 1998, when the exclusive right to
       supply Franchise Supply Customers is scheduled to end.
       There can be no assurance that competition among suppliers
       of electricity will not have a material adverse effect on
       the Company's results of operations.
  
            Pool Purchase Price Volatility.  Northern's supply
       business to Non-Franchise Supply Customers generally
       involves entering into fixed price contracts to supply
       electricity to its customers.  Northern obtains the
       electricity to satisfy its obligations under such contracts
       primarily by purchases from the wholesale trading market for
       electricity in England and Wales (the "Pool").  Because the
       price of electricity purchased from the Pool can be
       volatile, to the extent that Northern purchases electricity
       from the Pool, Northern is exposed to risk arising from
       differences between the fixed price at which it sells and
       the fluctuating prices at which it purchases electricity,
       unless it can effectively hedge such exposure.  Northern's
       ability to manage such risk at acceptable levels will
       depend, in part, on the specifics of the supply contracts
       that Northern enters into, Northern's ability to implement
       and manage an appropriate hedging strategy and the
       development of an adequate market for hedging instruments.
       There can be no assurance that this risk will be effectively
       mitigated.
  
            Change in Government Policy.  The Conservative Party
       has held power in the United Kingdom since 1979 and
       currently has a one-seat majority over all parties.  The
       next general election in the United Kingdom must be held no
       later than May 1997, and may be called at approximately
       three weeks' notice at any time before then.  Certain senior
       members of the Labour Party, which is the main opposition
       party, have recently made statements regarding policies
       which a Labour government might introduce, including a
       windfall assessment proposed to be levied on privatized
       utilities and referring the whole electricity industry to
       the competition authorities.  There can be no assurance that
       the policies of the United Kingdom government, by whichever
       party it is controlled, would not cause a material adverse
       effect on Northern's results of operations.
  
       7.   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, and 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 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.
  
       8.   General Operating Uncertainties.  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 a material adverse impact on the Company.
  
       9.   Fuel Supply Operations.  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.  Although the Company believes that it
  has contracted for natural gas supply and transportation in
  sufficient quantities to satisfy the needs of its projects, the
  gas suppliers are not required in all cases to provide dedicated
  reserves in support of their contractual obligations.  If a
  supplier were not able to obtain substitute volumes of natural
  gas and the transportation services necessary to deliver them at
  a price acceptable to it, the failure of that supplier to deliver
  natural gas in accordance with its contract could have a material
  adverse effect on the cash flows to the Company.  In addition,
  under certain gas supply contracts the Company is obligated to
  pay for a certain minimum quantity of natural gas even if it
  cannot utilize it, as could occur as a result of curtailment of
  electricity deliveries by a utility purchaser.  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.  Finally, the state, federal and
  foreign regulatory authorities that have jurisdiction over
  natural gas transportation have the right to modify aspects of
  the rates, terms and conditions of those contracts.  It is
  possible that such a modification could materially increase the
  fuel transportation costs of the projects or give the transporter
  a right to terminate or suspend or decrease its performance under
  its contract.
  
       10.  Present Dependence on Large Customer; Contract Risks.
  The Company currently relies on long-term power purchase
  "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 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 after achieving firm operation, energy payments under
  each SO4 Agreement 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.
  
       11.  Competition and Domestic Deregulation; Industry
  Restructuring.  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 to
  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,
  recent deregulation and industry restructuring activity may cause
  certain utilities or other contract parties 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.
  
       12.  Impact of Environmental, Energy 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) that 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 domestic power plants it owns
  are QFs under PURPA or are exempted as exempt wholesale
  generators ("EWGs"), and so long as its foreign utility
  operations are exempted as EWGs or foreign utility companies or
  are otherwise exempted under PUHCA.  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 or
  replaced 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.
  
       (b)  Casecnan. In November 1995, the Company closed the
  financing and commenced construction of the Casecnan Project, a
  combined irrigation and 150 net MW hydroelectric power generation
  project (the "Casecnan Project") located in the central part of
  the island of Luzon in the Republic of the Philippines.  The
  Casecnan Project will consist generally of diversion structures
  in the Casecnan and Denip Rivers that will divert water into a
  tunnel of approximately 23 kilometers.  The tunnel will transfer
  the water from the Casecnan and Denip Rivers in the Pantabangan
  Reservoir for irrigation and hydroelectric use in the Central
  Luzon area.  An underground powerhouse located at the end of the
  water tunnel and before the Pantabangan Reservoir will house a
  power plant consisting of approximately 150 MW of newly installed
  rated electrical capacity.  A tailrace tunnel of approximately
  three kilometers will deliver water from the water tunnel and the
  new powerhouse to the Pantabangan Reservoir, providing additional
  water for irrigation and increasing the potential electrical
  generation at two downstream existing hydroelectric facilities of
  the National Power Corporation of the Philippines ("NPC").
  
       CE Casecnan Water and Energy Company, Inc., a Philippine
  corporation ("CE Casecnan") which is presently indirectly owned
  as to approximately 35% of its equity by the Company and
  approximately 35% indirectly owned by Peter Kiewit Sons' Inc., is
  developing the Casecnan Project under the terms of the Project
  Agreement between CE Casecnan and the National Irrigation
  Administration ("NIA").  Under the Project Agreement, CE Casecnan
  will develop, finance and construct the Casecnan Project over an
  estimated four-year construction period, and thereafter own and
  operate the Casecnan Project for 20 years (the "Cooperation
  Period").  During the Cooperation Period, NIA is obligated to
  accept all deliveries of water and energy, and so long as the
  Casecnan Project is physically capable of operating and
  delivering in accordance with agreed levels set forth in the
  Project Agreement, NIA will pay CE Casecnan a guaranteed fee for
  the delivery of water and a guaranteed fee for the delivery of
  electricity, regardless of the amount of water or electricity
  actually delivered.  In addition, NIA will pay a fee for all
  electricity delivered in excess of a threshold amount up to a
  specified amount.  NIA will sell the electric energy it purchases
  to NPC, although NIA's obligations to CE Casecnan under the
  Project Agreement are not dependent on NPC's purchase of the
  electricity from NIA.  All fees to be paid by NIA to CE Casecnan
  are payable in U.S. dollars.  The guaranteed fees for the
  delivery of water and energy are expected to provide
  approximately 70% of CE Casecnan's revenues.
  
       The Project Agreement provides for additional compensation
  to the CE Casecnan upon the occurrence of certain events,
  including increases in Philippine taxes and adverse changes in
  Philippine law.  Upon the occurrence and during the continuance
  of certain force majeure events, including those associated with
  Philippines political action, NIA may be obligated to buy the
  Casecnan Project from CE Casecnan at a buy out price expected to
  be in excess of the aggregate principal amount of the outstanding
  CE Casecnan debt securities, together with accrued but unpaid
  interest.  At the end of the Cooperation Period, the Casecnan
  Project will be transferred to NIA and NPC for no additional
  consideration on an "as is" basis.
  
       The Republic of the Philippines has provided a Performance
  Undertaking under which NIA's obligations under the Project
  Agreement are guaranteed by the full faith and credit of the
  Republic of the Philippines.  The Project Agreement and the
  Performance Undertaking provide for the resolution of disputes by
  binding arbitration in Singapore under international arbitration
  rules.
  
       The Casecnan Project is being constructed on a joint and
  several basis by Hanbo Corporation and Hanbo Engineering &
  Construction Co. Ltd. (formerly known as You One Engineering &
  Construction Co., Ltd., and herein referred to as "HECC"), both
  of which are South Korean corporations, pursuant to a fixed-
  price, date-certain, turnkey construction contract (the "Turnkey
  Construction Contract").  Hanbo Corporation and HECC (sometimes
  collectively referred to as the "Contractor") are under common
  ownership control.  Hanbo Corporation is an international
  construction company.  HECC, which recently emerged from a court-
  administered receivership, is a contractor with over 25 years
  experience in tunnel construction, using both the drill-and-blast
  and tunnel boring machine ("TBM") methods.
  
       The Contractor's obligations under the Turnkey Construction
  Contract are guaranteed by Hanbo Iron & Steel Company, Ltd.
  ("Hanbo Steel"), a large South Korean steel company.  In
  addition, the Contractor's obligations under the Turnkey
  Construction Contract are secured by an unconditional,
  irrevocable standby letter of credit issued by Korea First Bank
  ("KFB") in the approximate amount of $118 million.  The total
  cost of the Casecnan Project, including development,
  construction, testing and startup, is estimated to be
  approximately $495 million.
  
       The Company was recently advised that Hanbo Corporation and
  Hanbo Steel had each filed to seek court receivership protection
  in Korea.  At the present time, all of the construction work on
  the Casecnan Project is being performed by the second contractor
  which is party to the Turnkey Construction Contract, HECC.
  Although HECC, Hanbo Corporation and Hanbo Steel are under common
  ownership control, HECC has not filed for receivership protection
  and is believed to be solvent.  However, no assurances can be
  given that HECC will not file for receivership due to the
  foregoing developments or that it will remain solvent and able to
  perform fully its obligations under the Turnkey Construction
  Contract.
  
       The work on the Casecnan Project, which commenced in 1995,
  is presently continuing on schedule and within the budget.  CE
  Casecnan is presently reviewing its rights, obligations and
  potential remedies in respect of the recent developments
  regarding the co-Contractor and the guarantor and is presently
  unable to speculate as to the ultimate effect of such
  developments on CE Casecnan.  However, CE Casecnan has recently
  received confirmation from HECC that it intends to fully perform
  its obligations under the Turnkey Construction Contract and
  complete the Casecnan Project on schedule and within the budget.
  Additionally, it has been reported that the South Korean
  government has informed the Philippine government that the South
  Korean government will take appropriate actions to support HECC's
  completion of the Casecnan Project.
  
       KFB has recently reconfirmed to CE Casecnan that it will
  honor its obligations under the Casecnan Project letter of credit
  and also has stated its support for the successful completion of
  the Casecnan Project.  However, Moody's Investors Service has
  recently issued a warning for a possible ratings downgrade for
  Korea First Bank because of the possible impact of the Hanbo
  Steel receivership on the substantial loans KFB previously made
  to Hanbo Steel.  In a related development, the South Korean
  government has recently announced that it would provide some
  funding to assist Hanbo Steel's creditor banks (including Korea
  First Bank) and its subcontractors.
  
       CE Casecnan financed a portion of the costs of the Casecnan
  Project through the issuance of $125,000,000 of its 11.45% Senior
  Secured Series A Notes due 2005 and $171,500,000 of its 11.95%
  Senior Secured Series B Notes due 2010 pursuant to an indenture
  dated November 27, 1995, as amended to date (the "Casecnan
  Indenture").  Although no default has occurred under the Casecnan
  Indenture as a result of the announced receivership of Hanbo
  Corporation, CE Casecnan will continue to closely monitor the
  Hanbo group and KFB developments and project construction status
  and develop appropriate contingency plans.
  
       If HECC were to materially fail to perform its obligations
  under the Turnkey Construction Contract and if KFB were to fail
  to honor its obligations under the Casecnan letter of credit,
  such actions could have a material adverse effect on the Casecnan
  Project and CE Casecnan.  However, based on the information
  presently available to it, CE Casecnan does not presently expect
  that either such event will occur.
  
                             SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act
  of 1934, the registrant has duly caused this report to be signed
  on its behalf by the undersigned thereunto duly authorized.
  
                                CALENERGY COMPANY, INC.
  
  Dated:  February 25 1997           By:  /s/  Steven A. McArthur
                                     Steven A. McArthur
                                     Senior Vice President
                                     and General Counsel