Exhibit B 

                             Amendment No.  1 
                                  to the 
                           Amended and Restated 
                          1986 Stock Option Plan 

   This Amendment No.  1 to the Amended and Restated Stock Option Plan of
California Energy Company, Inc.  is made as of May 12, 1994 by deleting
Section 4(a) thereof in its entirety and amending and restating it to read as
follows: 

      "(a) Basic Limitation.  Shares offered under the Plan shall be
   authorized but unissued Shares or treasury Shares.  The aggregate number
   of Shares available for issuance under the Plan shall not exceed 6,147,968
   Shares, subject to adjustment pursuant to Section 9. After May 12, 1994,
   the aggregate amount of stock options available for grant to Employees
   under the Plan shall be 1,025,000 Shares, subject to adjustment pursuant
   to Section 9 and options that lapse after March 31, 1994." 

   Except as modified by this Amendment No.  1, all of the terms and
conditions of the Amended and Restated 1986 Stock Option Plan shall remain
valid and in full force and effect.  

                           California Energy Company, Inc.  

                           By: /s/ Steve A. McArthur
                           Steven A.  McArthur 
                Senior Vice President and General Counsel 






                                      
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