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      Salton Sea Funding Corp Letter

      June
        30,
        2005

      VIA
        EDGAR
        AND FACSIMILE

      Mr.
        William Choi

      Accounting
        Branch Chief

      Division
        of Corporation Finance

      Securities
        and Exchange Commission

      450
        Fifth
        Street, N.W.

      Mail
        Stop
        0308

      Washington,
        D.C. 20549

      RE:  Salton
        Sea Funding Corporation

          Form
        10-K for
        the Year Ended December 31, 2004

          File
        No.
        33-95538

      Dear
        Mr.
        Choi:

      This
        correspondence is being filed to complete our response to comments with respect
        to Salton Sea Funding Corporation (“Funding Corporation” or the “Company”) and
        its Form 10-K for the year ended December 31, 2004 (the “Form 10-K”) received
        from the staff of the Securities and Exchange Commission (the “Commission”) by
        letter dated May 13, 2005 (the “Comments”). The numbering below corresponds to
        the numbering of the Comments, which we have incorporated into this response
        letter in italics.

      Item
        8. Financial Statements and Supplementary Data

      General

                15.

                Every
                  issuer of a registered security that is guaranteed and every guarantor
                  of
                  a registered security must file the financial statements required
                  by Rule
                  3-10 of Regulation S-X. We have the following comments regarding
                  the form
                  and content of the financial statements included in your Annual
                  Report.

              a.

                Please
                  tell us your basis for filing combined financial statements for
                  the Salton
                  Sea and Partnership Guarantors. If you have relied on one of the
                  exceptions of the general rule of paragraph (a)(1) of Rule 3-10
                  of
                  Regulation S-X, please tell us the exception you relied upon and
                  explain
                  to us in detail why you comply with the conditions in the
                  exception.

      Response:
        The
        Company is not seeking to directly rely on one of the specific prescribed
        exceptions to the general rule of paragraph (a)(1) of Rule 3-10 of Regulation
        S-X as the basis for filing combined financial statements for the Salton
        Sea
        Guarantors and Partnership Guarantors.1
        Rather,
        the Company is relying on Article 3A of Regulation S-X, pursuant to which
        the
        Company has determined that the most meaningful financial presentation is
        combined financial statements for the Salton Sea Guarantors as a group, the
        Partnership Guarantors as a group and separate financial statements for the
        Royalty Guarantor. In adopting Rule 3-10 of Regulation S-X, the Commission
        recognized that there are circumstances “where full Securities Act and Exchange
        Act disclosure by both the issuer and the guarantors may not be useful to
        an
        investment decision and, therefore, may not be necessary.” Securities Act
        Release 33-7878. Rule 3-10 largely codified prior Commission interpretations
        and
        was intended in part “to eliminate substantially the need for staff ‘no-action’
        letters in this area.”Id.
        While
        Rule 3-10 did create greater certainty, even around the time of effectiveness
        of
        Rule 3-10, the Commission recognized that it may still need to consider requests
        for reporting relief for related issuers and guarantors in cases involving
        “novel facts or legal issues.” See Sterling
        Chemicals,
        Inc.
        no-action letter, dated December 13, 2000.

        Background:

      The
        following is an overview of Funding Corporation and each of the
        Guarantors.

              §

                Funding
                  Corporation, a wholly owned direct subsidiary of Magma Power Company
                  (“Magma”), was organized in 1995 for the sole purpose of acting as issuer
                  of senior secured notes and bonds (the “Securities”). The Securities are
                  payable from the proceeds of payments made of principal and interest
                  on
                  senior secured notes by the Partnership Guarantors, Salton Sea
                  Guarantors
                  and Royalty Guarantor except for Salton Sea Minerals Corporation
                  and
                  CalEnergy Minerals LLC, its wholly owned direct subsidiary, (collectively,
                  the “Guarantors”) to Funding Corporation. Funding Corporation has no more
                  than a 1%, direct or indirect, ownership interest in
                  the Guarantors, excluding Salton Sea Minerals Corporation and CalEnergy
                  Minerals LLC. The remainder of the ownership interests in the Guarantors,
                  with the exception of Salton Sea Minerals Corporation and CalEnergy
                  Minerals LLC, is owned by Magma. Salton Sea Minerals Corporation
                  is a
                  wholly owned direct subsidiary of MidAmerican Energy Holdings Company,
                  an
                  indirect owner of 50% of the common stock on Magma. Please note
                  that the
                  operations of CalEnergy Minerals LLC were ceased in September 2004
                  and
                  presented as discontinued operations in the Company’s 2004 financial
                  statements based on the application of guidance in FASB Statement
                  No. 144.
                  There is no other activity within Salton Sea Minerals
                  Corporation.

        1 The
          closest applicable specific exception stated in Rule 3-10 based on our
          facts is
          Rule 3-10(f), which provides as follows:

          (f)
            Multiple subsidiary guarantors of securities issued by the parent
            company of
            those subsidiaries. When a parent company issues securities and more than
            one of its subsidiaries guarantee those securities, the registration
            statement,
            parent company annual report, or parent company quarterly report need
            not
            include financial statements of the subsidiary guarantors if:

                  (1)

                    Each
                      of the subsidiary guarantors is 100% owned by the parent company
                      issuer;

                  (2)

                    The
                      guarantees are full and
                      unconditional;

                  (3)

                    The
                      guarantees are joint and several;
                      and

                  (4)

                    The
                      parent company’s financial statements are filed for the periods specified
                      by 210.3-01 and 210.3-02 and include, in a footnote, condensed
                      consolidating financial information for the same periods with
                      a separate
                      column for: (i) the parent company; (ii) the subsidiary guarantors
                      on a
                      combined basis; (iii) any other subsidiaries of the parent
                      company on a
                      combined basis; (iv) consolidating adjustments; and (v) the
                      total
                      consolidated amounts.

        As
          the
          Company, itself, does not own 100% of each of the Guarantors, the Company
          does
          not technically meet one of the four conditions of this exception to the
          general
          rule, however, the Company believes its reporting is the most meaningful
          presentation as discussed within this response letter.

        2

              §

                The
                  Partnership Guarantors’ primary assets are the direct and indirect
                  ownership of five geothermal power facilities and a zinc recovery
                  project,
                  which ceased operations in September 2004.

              §

                The
                  Salton Sea Guarantors’ primary assets are the direct and indirect
                  ownership of five geothermal power facilities, which are under
                  common
                  control, management and ownership.

              §

                The
                  Royalty Guarantor is a single purpose entity which was established
                  to
                  receive a royalty cash flow from the sale of power generated by
                  facilities
                  owned by other Guarantors.

      For
        further clarification of the ownership of and interests in the legal entities
        comprising the Salton Sea Guarantors and the Partnership Guarantors please
        see
        Exhibit A to this letter.2

      At
        the
        time Funding Corporation filed its initial registration statement with the
        Commission in 1995 to the present, the Company has believed
        that
        its
        situation involves novel facts and legal issues and the Company’s management has
        determined that the most meaningful financial presentation is combined financial
        statements for the Salton Sea Guarantors as a group, the Partnership Guarantors
        as a group and separate financial statements for the Royalty Guarantor rather
        than nineteen separate financial statements of each of the nineteen individual
        Guarantors, based on analysis of the following factors: (1) financial unity,
        (2)
        common control, common management, common operations and common domicile,
        (3)
        joint and several nature of the respective guarantees of the Company’s debt
        securities and the respective secured project notes and (4) meaningfulness
        of
        disclosure.

          2
            Please note that Exhibit A is an organizational chart substantially
            similar to the chart provided with our letter dated June 10, 2005; provided,
            however, that such chart has been corrected by removing “Salton Sea Power
            Company” from “Salton Sea Guarantors” portion of the diagram. As correctly
            indicated in the text of the chart, Salton Sea Power Company is not a
            Salton Sea
            Guarantor, although it was inadvertently included in “Salton Sea Guarantors”
            portion of the diagram.

          3

              ·

                Financial
                  Unity

      As
        explained below, we believe the various contractual arrangements among the
        Company and the Guarantors in effect provide the economic equivalent of 100%
        equity ownership of the Guarantors by the Company. This financial unity is
        an
        important consideration in providing meaningful information to investors
        for
        evaluation of the creditworthiness of the Company and the
        Guarantors.

      Although
        directly or indirectly the Company owns no more than 1% of any of the
        Guarantors, the documents entered into in connection with the issuance by
        the
        Company of its debt securities require all of the Guarantors to deposit all
        of
        their respective revenues into a restricted revenue fund held by a collateral
        agent on behalf of the Company for the benefit of the holders of the Company’s
        debt securities. The restricted revenue fund is recorded as cash on the
        Company's balance sheet. The moneys in the restricted revenue fund are combined
        and used to pay the operating and maintenance expenses of all of the Guarantors
        and certain administrative expenses of the Company associated with, as well
        as
        principal, interest and reserve requirements related to, all of its debt
        securities. Only after such prior payments are made and certain combined
        debt
        service coverage ratio tests are satisfied are remaining funds available
        to make
        distributions as directed by the Guarantors. None of the financing documents
        associated with the Company’s debt securities differentiate among the Guarantors
        with respect to such deposits and payments. The Guarantors are effectively
        treated as equal undivided parts of a unified entity.

      These
        same financing documents also provide for: (1) other restrictive covenants
        imposed upon the operations and management of the Guarantors, including
        restrictions on the Guarantors making distributions from moneys in the revenue
        fund except as described above,3
        (2)
        loans from the Company to each of the Salton Sea Guarantors, the Partnership
        Guarantors and the Royalty Guarantor, the installments of principal and interest
        of which match, and are utilized to pay principal of and interest on the
        Company’s debt securities, (3) pledges of substantially all of the assets and
        cash flows from the Guarantors to secure such loans, and (4) guarantees of
        the
        Salton Sea Guarantors, the Partnership Guarantors and the Royalty Guarantor
        to
        repay all series of the Company’s outstanding debt securities, regardless of
        which series of such securities were utilized to fund the particular loans
        made
        by the Company to the Guarantors.

      We
        believe these facts and circumstances, together with those described below,
        effectively create financial unity among the respective Guarantors that makes
        the inclusion of the combined financial statements for each of the Salton
        Sea
        Guarantors and the Partnership Guarantors more meaningful to investors. In
        addition, we believe that presentation of nineteen separate sets of financial
        statements covering the nineteen individual Guarantors is not meaningful
        to
        investors and that
        level of detail could be confusing to investors and prevent them from gaining
        a
        true measure of the Salton Sea Guaratantors’ and the Partnership Guarantors’
        financial performance.

        3
          In particular, these documents contain customary covenants, subject to
          important
          qualifications and limitations, that restrict the Company’s and the Guarantors’
          ability, among other things, to pay dividends and make other restricted
          payments, incur additional debt, create or permit certain liens, merge,
          consolidate or transfer assets or enter into transactions with
          affiliates.

          4

              ·

                Common
                  Control, Common
                  Management,
                  Common
                  Operations
                  and Common
                  Domicile

      As
        discussed above, pursuant to the financing documents between Funding Corporation
        and the Guarantors, Funding Corporation has the ability to exercise significant
        influence and control over the operation and financial policies of each of
        the
        Guarantors.

      All
        of
        the Salton Sea Guarantors and the Partnership Guarantors, excluding Salton
        Sea
        Minerals Corporation and CalEnergy Minerals LLC (whose operations were ceased
        in
        September 2004 and presented as discontinued operations in the Partnership
        Guarantors’