content: 1
  
                                  
                 Securities and Exchange Commission
  
                       Washington, DC  20549
  
                              Form 8-K
  
                           Current Report
  
               Pursuant to Section 13 or 15(d) of the
                    Securities Exchange Act 1934
  
  
                    Date of Report March 6, 1998
                 (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
   (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 expressed or implied by  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
  expressed or implied by  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 or implied by  any
  forward-looking statements of the Company made by or on behalf of
  the Company.  The factors included here are not exhaustive.
  Forward looking statements, by their nature, are speculative and
  are based on then current expectations involving a number of
  known and unknown risks and uncertainties that could cause the
  actual results and performance of the Company to differ
  materially from any expected future results or performance,
  expressed or implied, by the forward-looking statements.
  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 expressed or
  implied by   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 acquisition and
  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 energy
  projects (including, without limitation, generation,
  distribution, exploration/production, storage and supply
  projects, and related services), both domestically and
  internationally, the completion of any of which is subject to
  substantial risk.  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 or other
  contracts with other project participants,  receipt of adequate
  security for the obligations of 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  energy projects or
  to refinance projects.  The future growth of the Company is
  dependent, in large part, upon the demand for significant amounts
  of additional  energy (including the generation, distribution,
  exploration/production, storage and supply thereof) and related
  services and its ability to obtain contracts or favorable markets
  to service  portions of this demand .  There can be no assurance
  that development efforts on any particular project, or the
  Company's development 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, a number of projects
  under award outside the United States and a number of operating
  projects doing business outside of the United States.  The
  financing, development and operation of projects conducting
  business 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 or regulation, changes in government
  policy, political instability, civil unrest, contract abrogation
  and expropriation) and other risk/structuring issues that have
  the potential to cause substantial delays in respect of, or
  material impairment of, the value of the project being developed,
  constructed or operated, 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 delayed, suspended or terminated by the applicable
  foreign governments or may be subject to risks of contract
  abrogation or other uncertainties resulting from changes in
  government policy or personnel or changes in general economic
  conditions affecting the country.  (In this regard, the Company
  notes that it recorded a one-time charge of $87 million for the
  fourth quarter of 1997 representing an asset valuation impairment
  under Financial Accounting Standard No. 121 "Accounting for the
  Impairment of Long-Lived Assets" relating to  the Company's
  assets in Indonesia.  The charge was taken as a result of
  uncertainties regarding possible contract abrogations by the
  Government of Indonesia relating to  the Company's Dieng, Patuha
  and Bali projects.)  Furthermore, the central bank of certain
  countries 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 certain international projects, including without limitation,
  Northern Electric plc ("Northern"), where payments are to be made
  in the foreign currency 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 or other applicable foreign
  currency.  Although the Company may 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,
  which 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 other 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 businesses are subject to
  extensive regulation in the United Kingdom.
  
            Pricing Regulation of Distribution.  Revenue from
       Northern's distribution business is controlled by a formula
       (the "Distribution Price Control Formula") which determines
       the maximum average price per unit of electricity (expressed
       in kilowatt ("kW") hours, a "unit") that a regional
       electricity company (a "REC") in the United Kingdom may
       charge.  The Distribution Price Control Formula is expected
       to have a five year duration and is subject to review by the
       Director General of Electricity Supply (the "Regulator")at
       the end of each five-year period and at other times in the
       discretion of the Regulator.  At each review, the Regulator
       can propose adjustments to the Distribution Price Control
       Formula.  In July 1994, a review resulted in a 17% reduction
       in allowed distribution income compared to the original
       formula, before allowing for inflation, effective April 1,
       1995.  In July 1995, a further review of distribution prices
       was concluded by the Regulator for fiscal years 1997 to
       2000.  As a result of this further review, Northern's
       allowed distribution from income was reduced by a further
       11%, before allowing for inflation, effective April 1, 1996.
       There can be no assurance that any future price reviews by
       the Regulator will not have a material adverse effect on the
       Company'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
       electricity to 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 in the fall
       of 1998, when the exclusive right to supply electricity to
       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.  The domestic gas market is
       also being opened to competition in phases and there can be
       no assurance that competition among suppliers of gas 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.
  
            Changes in Government Policy.  In the general election
       held in the United Kingdom on May 1, 1997, the Labour Party
       won a majority of seats in the United Kingdom Parliament.
       On July 31, 1997, the United Kingdom passed the so called
       "windfall tax" assessed on privatized utilities which
       resulted in a third quarter extraordinary item of  $135.85
       million.  There can be no assurance that other possible
       changes in tax or utility regulation by the United Kingdom
       government, by whichever party it is controlled, would not
       cause a material adverse effect on the Company'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.   Exploration, Development and Production of Gas
  Resources.  The exploration development and production of gas
  resources involve resource based and geologic risks similar to
  those for geothermal resources described above, including dry
  holes, uncontrolled releases and uncertainties relating to
  resource production, required capital and operating expenditures,
  and resource quality, quantity, extractability, sustainability
  and extent of reserves.
  
       9.   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.
  
       10.  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.  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 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.
  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.
  
       11.  Present Dependence on Large Customer; Contract Risks.
  The Company currently relies on long-term power purchase
  "Standard Offer No. 4" contracts between  subsidiaries (each, an
  "SO4 Agreement") and  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 subsidiaries' 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 subsidiaries' 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 subsidiaries' facilities operating under
  SO4 Agreements are likely to decline significantly after the
  expiration of the applicable fixed price period.  Moreover, the
  Company's subsidiaries have a number of ongoing contract disputes
  with Edison involving litigation of the SO4 Agreements, which
  create additional litigation uncertainties regarding such
  contracts.
  
       12.  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.  In particular, the state of
  California has adopted a bill to restructure the electric
  industry by providing for a phased-in competitive power
  generation industry, with a power pool and an independent system
  operator, and for direct access to generation for all power
  purchasers outside the power exchange under certain
  circumstances.  Although the bill contemplates that existing
  qualifying facility power sales contracts will be honored, and
  all the Company's California projects are qualifying facilities,
  until the new system is fully implemented, it is impossible to
  predict what impact, if any, it may have on the operations of
  those projects.
  
       13.  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,
  in the case of the Company's cogeneration facilities 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.
  
       Currently, Congress is considering proposed legislation that
  would amend PURPA by eliminating the requirement that utilities
  purchase electricity from qualifying facilities at prices based
  on Avoided Cost of Energy.  The Company does not know whether
  such legislation will be passed or what form it may take.  The
  Company believes that if any such legislation is passed, it would
  apply to new projects only and thus, although potentially
  impacting the Company's ability to develop new domestic projects,
  it would not affect the Company's existing qualifying facilities.
  There can be no assurance, however, that any legislation passed
  would not adversely impact the Company's existing domestic
  projects.
  
       In addition, many states are implementing or considering
  regulatory initiatives designed to increase competition in the
  domestic power generation industry and increase access to
  electric utilities' transmission and distribution systems for
  independent power producers and electricity consumers.  On
  September 1, 1997, the California legislature adopted an industry
  restructuring bill that would provide for a phased-in competitive
  power generation industry with a power pool and independent
  system operator and also would permit direct access to generation
  for all power purchasers outside the power exchange under certain
  circumstances.  Under the bill, consistent with the requirements
  of PURPA, existing qualifying facilities power sales agreements
  would be honored.  The Company cannot predict the final form or
  timing of the proposed industry restructuring or the results of
  its operations.
  
       The structure of such federal and state energy regulations
  have in the past, and may in the future, be the subject of
  various challenges and restructuring proposals by utilities and
  other industry participants.  The implementation of regulatory
  changes in response to such changes or restructuring proposals,
  or otherwise 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.
  
  
                              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 thereunto duly authorized.
  
                                CALENERGY COMPANY, INC.
  
  Dated:  March 6, 1998    By:  /s/  Douglas L. Anderson
                                Douglas L. Anderson
                                Assistant Secretary and
                                Assistant General Counsel
metadata_documents: [{"type": "8-K", "sequence": "1", "secsgml_size_bytes": 32304}]
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": "98559205"}, "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: 1
  
                                  
                 Securities and Exchange Commission
  
                       Washington, DC  20549
  
                              Form 8-K
  
                           Current Report
  
               Pursuant to Section 13 or 15(d) of the
                    Securities Exchange Act 1934
  
                    Date of Report March 6, 1998
                 (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
   (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 expressed or implied by  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
  expressed or implied by  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 or implied by  any
  forward-looking statements of the Company made by or on behalf of
  the Company.  The factors included here are not exhaustive.
  Forward looking statements, by their nature, are speculative and
  are based on then current expectations involving a number of
  known and unknown risks and uncertainties that could cause the
  actual results and performance of the Company to differ
  materially from any expected future results or performance,
  expressed or implied, by the forward-looking statements.
  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 expressed or
  implied by   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 acquisition and
  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 energy
  projects (including, without limitation, generation,
  distribution, exploration/production, storage and supply
  projects, and related services), both domestically and
  internationally, the completion of any of which is subject to
  substantial risk.  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 or other
  contracts with other project participants,  receipt of adequate
  security for the obligations of 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  energy projects or
  to refinance projects.  The future growth of the Company is
  dependent, in large part, upon the demand for significant amounts
  of additional  energy (including the generation, distribution,
  exploration/production, storage and supply thereof) and related
  services and its ability to obtain contracts or favorable markets
  to service  portions of this demand .  There can be no assurance
  that development efforts on any particular project, or the
  Company's development 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, a number of projects
  under award outside the United States and a number of operating
  projects doing business outside of the United States.  The
  financing, development and operation of projects conducting
  business 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 or regulation, changes in government
  policy, political instability, civil unrest, contract abrogation
  and expropriation) and other risk/structuring issues that have
  the potential to cause substantial delays in respect of, or
  material impairment of, the value of the project being developed,
  constructed or operated, 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 delayed, suspended or terminated by the applicable
  foreign governments or may be subject to risks of contract
  abrogation or other uncertainties resulting from changes in
  government policy or personnel or changes in general economic
  conditions affecting the country.  (In this regard, the Company
  notes that it recorded a one-time charge of $87 million for the
  fourth quarter of 1997 representing an asset valuation impairment
  under Financial Accounting Standard No. 121 "Accounting for the
  Impairment of Long-Lived Assets" relating to  the Company's
  assets in Indonesia.  The charge was taken as a result of
  uncertainties regarding possible contract abrogations by the
  Government of Indonesia relating to  the Company's Dieng, Patuha
  and Bali projects.)  Furthermore, the central bank of certain
  countries 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 certain international projects, including without limitation,
  Northern Electric plc ("Northern"), where payments are to be made
  in the foreign currency 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 or other applicable foreign
  currency.  Although the Company may 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,
  which 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 other 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 businesses are subject to
  extensive regulation in the United Kingdom.
  
            Pricing Regulation of Distribution.  Revenue from
       Northern's distribution business is controlled by a formula
       (the "Distribution Price Control Formula") which determines
       the maximum average price per unit of electricity (expressed
       in kilowatt ("kW") hours, a "unit") that a regional
       electricity company (a "REC") in the United Kingdom may
       charge.  The Distribution Price Control Formula is expected
       to have a five year duration and is subject to review by the
       Director General of Electricity Supply (the "Regulator")at
       the end of each five-year period and at other times in the
       discretion of the Regulator.  At each review, the Regulator
       can propose adjustments to the Distribution Price Control
       Formula.  In July 1994, a review resulted in a 17% reduction
       in allowed distribution income compared to the original
       formula, before allowing for inflation, effective April 1,
       1995.  In July 1995, a further review of distribution prices
       was concluded by the Regulator for fiscal years 1997 to
       2000.  As a result of this further review, Northern's
       allowed distribution from income was reduced by a further
       11%, before allowing for inflation, effective April 1, 1996.
       There can be no assurance that any future price reviews by
       the Regulator will not have a material adverse effect on the
       Company'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
       electricity to 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 in the fall
       of 1998, when the exclusive right to supply electricity to
       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.  The domestic gas market is
       also being opened to competition in phases and there can be
       no assurance that competition among suppliers of gas 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.
  
            Changes in Government Policy.  In the general election
       held in the United Kingdom on May 1, 1997, the Labour Party
       won a majority of seats in the United Kingdom Parliament.
       On July 31, 1997, the United Kingdom passed the so called
       "windfall tax" assessed on privatized utilities which
       resulted in a third quarter extraordinary item of  $135.85
       million.  There can be no assurance that other possible
       changes in tax or utility regulation by the United Kingdom
       government, by whichever party it is controlled, would not
       cause a material adverse effect on the Company'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.   Exploration, Development and Production of Gas
  Resources.  The exploration development and production of gas
  resources involve resource based and geologic risks similar to
  those for geothermal resources described above, including dry
  holes, uncontrolled releases and uncertainties relating to
  resource production, required capital and operating expenditures,
  and resource quality, quantity, extractability, sustainability
  and extent of reserves.
  
       9.   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.
  
       10.  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.  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 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.
  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.
  
       11.  Present Dependence on Large Customer; Contract Risks.
  The Company currently relies on long-term power purchase
  "Standard Offer No. 4" contracts between  subsidiaries (each, an
  "SO4 Agreement") and  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 subsidiaries' 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 subsidiaries' 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 subsidiaries' facilities operating under
  SO4 Agreements are likely to decline significantly after the
  expiration of the applicable fixed price period.  Moreover, the
  Company's subsidiaries have a number of ongoing contract disputes
  with Edison involving litigation of the SO4 Agreements, which
  create additional litigation uncertainties regarding such
  contracts.
  
       12.  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.  In particular, the state of
  California has adopted a bill to restructure the electric
  industry by providing for a phased-in competitive power
  generation industry, with a power pool and an independent system
  operator, and for direct access to generation for all power
  purchasers outside the power exchange under certain
  circumstances.  Although the bill contemplates that existing
  qualifying facility power sales contracts will be honored, and
  all the Company's California projects are qualifying facilities,
  until the new system is fully implemented, it is impossible to
  predict what impact, if any, it may have on the operations of
  those projects.
  
       13.  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,
  in the case of the Company's cogeneration facilities 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.
  
       Currently, Congress is considering proposed legislation that
  would amend PURPA by eliminating the requirement that utilities
  purchase electricity from qualifying facilities at prices based
  on Avoided Cost of Energy.  The Company does not know whether
  such legislation will be passed or what form it may take.  The
  Company believes that if any such legislation is passed, it would
  apply to new projects only and thus, although potentially
  impacting the Company's ability to develop new domestic projects,
  it would not affect the Company's existing qualifying facilities.
  There can be no assurance, however, that any legislation passed
  would not adversely impact the Company's existing domestic
  projects.
  
       In addition, many states are implementing or considering
  regulatory initiatives designed to increase competition in the
  domestic power generation industry and increase access to
  electric utilities' transmission and distribution systems for
  independent power producers and electricity consumers.  On
  September 1, 1997, the California legislature adopted an industry
  restructuring bill that would provide for a phased-in competitive
  power generation industry with a power pool and independent
  system operator and also would permit direct access to generation
  for all power purchasers outside the power exchange under certain
  circumstances.  Under the bill, consistent with the requirements
  of PURPA, existing qualifying facilities power sales agreements
  would be honored.  The Company cannot predict the final form or
  timing of the proposed industry restructuring or the results of
  its operations.
  
       The structure of such federal and state energy regulations
  have in the past, and may in the future, be the subject of
  various challenges and restructuring proposals by utilities and
  other industry participants.  The implementation of regulatory
  changes in response to such changes or restructuring proposals,
  or otherwise 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.
  
                              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 thereunto duly authorized.
  
                                CALENERGY COMPANY, INC.
  
  Dated:  March 6, 1998    By:  /s/  Douglas L. Anderson
                                Douglas L. Anderson
                                Assistant Secretary and
                                Assistant General Counsel