EXHIBIT 8.1

                   [Letterhead of Willkie Farr & Gallagher]



August 29, 1996



CalEnergy Capital Trust
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska  68131

Re:      CalEnergy Company, Inc.;
         CalEnergy Capital Trust;
         Registration Statement on Form S-3

Ladies and Gentlemen:

We have acted as special counsel to CalEnergy Company, Inc., a Delaware
corporation (the "Company"), and CalEnergy Capital Trust, a statutory business
trust formed under the laws of the State of Delaware (the "Trust"), in
connection with the preparation of a Registration Statement on Form S-3 (File
No. 333-08315), as filed by the Company and the Trust with the Securities and
Exchange Commission (the "Commission") on July 17, 1996 under the Securities
Act of 1933, as amended (the "Act") and Amendment No. 1 thereto, as filed on
the date hereof (such Registration Statement, as so amended, being hereinafter
referred to as the "Registration Statement"), relating to the registration
under the Act of (i) 2,078,600 6 1/4% Convertible Preferred Securities Term
Income Deferrable Equity Securities (TIDES)SM or TIDES SM (liquidation
preference $50 per each of the TIDES) (the "TIDES") representing undivided
beneficial ownership interests in the assets of the Trust; (ii) 6 1/4%
Convertible Junior Subordinated Debentures Due 2016 (the "Convertible Junior
Subordinated Debentures") of the Company, which may be distributed under
certain circumstances to the holders of the TIDES; (iii) the shares of common
stock, par value $0.0675 per share (the "Common Stock"), of the Company
issuable upon conversion of the TIDES and the Convertible Junior Subordinated
Debentures; and (iv) the Preferred Securities Guarantee of the Company (as
defined in the Registration Statement).

We hereby confirm that, although the discussion set forth in the above
captioned registration statement under the heading "UNITED STATES TAXATION"
does not purport to





     





CalEnergy Capital Trust
August 29, 1996
page 2

discuss all possible United States federal income tax consequences of the
purchase, ownership and disposition of the TIDES, in our opinion such
discussion constitutes, in all material respects, a fair and accurate summary
of the United States federal income tax consequences of the purchase,
ownership and disposition of the TIDES under current law. It is possible
that contrary positions may be taken by the Internal Revenue Service and
that a court may agree with such contrary positions.

This opinion is furnished to you solely for your benefit in connection with
the filing of the Registration Statement and, except as set forth in the next
sentence, is not to be used, circulated, quoted or otherwise referred to for
any other purpose or relied upon by any other person for any purpose without
our prior written consent. We also consent to the use of our name under the
heading "Legal Matters" in the Registration Statement and in the related
Prospectus. We hereby consent to the filing of this opinion with the
Commission as Exhibit 5 to the Registration Statement. In giving this consent,
we do not thereby admit that we are within the category of persons whose
consent is required under Section 7 of the Act or the rules and regulations of
the Commission promulgated thereunder. This opinion is expressed as of the
date hereof unless otherwise expressly stated and we disclaim any undertaking
to advise you of any subsequent changes of the facts stated or assumed herein
or any subsequent changes in applicable law.



Very truly yours,

/s/ Willkie Farr & Gallagher