UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549



                                    FORM 8-K

                             Current Report Pursuant
                          to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

        Date of report (Date of earliest event reported): December 15, 1997



                              KENETECH CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)


                                    Delaware
        (State or Other Jurisdiction of Incorporation or Organization)


            33-53132                                       94-3009803
      (Commission File Number)                           (I.R.S.Employer
                                                      Identification Number)


       500 Sansome Street, Suite 300
          San Francisco, California                             94111
    (Address of Principal Executive Offices)                  (Zip Code)


                                (415) 398-3825
             (Registrant's Telephone Number, Including Area Code)





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ITEM 5.  OTHER EVENTS.

     Annexed  hereto as Exhibit 99.1 and  incorporated  herein by reference is a
press release  jointly issued on December 15, 1997 by KENETECH  Energy  Systems,
Inc.,  a  wholly-owned   subsidiary  of  the  Registrant   ("KES"),   and  Enron
International,   a  wholly-owned  subsidiary  of  Enron  Corporation  ("Enron"),
announcing   that  financial  close  has  been  achieved  on  the  $670  million
EcoElectrica  Liquefied  Natural Gas  Terminal  and  Cogeneration  Project  (the
"Project") to be located in the  Penuelas/Guayanilla  area on the south coast of
Puerto Rico. KES and Enron,  either  directly or through  subsidiaries,  jointly
developed and each owns 50% of the Project.  It is the intent of the  Registrant
to sell KES' interest in the Project during 1998.

     Notwithstanding the above events, the liquidity of KENETECH Corporation and
its  consolidated  subsidiaries  (the  "Company")  will  continue to be severely
constrained.  The Company expects to generate operating losses prior to the sale
of the Project due to administrative  expenses with no corresponding revenue and
interest  expense on debt.  These  factors  raise  substantial  doubt  about the
Company's  ability to  continue  as a going  concern  in its  current  form.  In
addition,  there can be no  assurance  that the Company  will be  successful  in
implementing  the  sale  of the  Project,  that  substantial  proceeds  will  be
received,  or that the  Company  will  continue as a going  concern.  Management
believes  that such sale,  even if  consummated,  will not  generate  sufficient
proceeds to ultimately  provide any return of invested capital to the holders of
the Company's stock.  The Company  believes that any proceeds  received from the
sale of the Project will be paid to creditors. Consequently, after, or as a part
of a sale of the Company's interest in the Project, the Company believes that it
is likely that it, or certain of its  subsidiaries,  will seek protection  under
the Federal Bankruptcy Code.

ITEM 7.  EXHIBITS.

Exhibit
Number            Description

99.1              Press Release, dated December 15, 1997

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      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 hereunto duly authorized.


                                    KENETECH Corporation
                                  (registrant)


Date: December 17, 1997                By:/s/ Mark D. Lerdal
                                          Mark D. Lerdal
                                          President and Chief Executive Officer




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      EXHIBIT INDEX

      The following  Exhibits are hereby filed as a part of this Current  Report
on Form 8-K:

Exhibit                                                     Page
Number            Description                               Number

99.1              Press Release, dated December 15, 1997       5






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                                EXHIBIT 99.1
                     PRESS RELEASE, DATED DECEMBER 15, 1997

Enron Corp.
P. O. Box 1188
Houston, TX 77251-1188

News Release

Margarita Bernal
(713) 853-7161

ENRON/KENETECH CONSORTIUM COMPLETES FINANCING OF PUERTO RICO POWER PROJECT

FOR IMMEDIATE RELEASE:  Monday, December 15, 1997

HOUSTON  - Enron  International,  a  wholly-owned  subsidiary  of  Enron  Corp.,
(Enron),  and KENETECH  Energy  Systems,  Inc.,  a  wholly-owned  subsidiary  of
KENETECH  Corporation,  (KENETECH) announced today that financial close has been
achieved on the $670 million EcoElectrica LNG Terminal and Cogeneration Project.
Enron and  KENETECH  jointly  developed  and each own 50 percent of the project,
which  will be  located in the  Penuelas/Guayanilla  area on the south  coast of
Puerto Rico.

The power plant portion of the project,  an approximately  500 megawatt combined
cycle power facility,  will be fueled primarily by liquefied  natural gas (LNG).
The LNG will be imported from Trinidad under a long term contract with Cabot LNG
and delivered at the project's receiving terminal which includes a pier, docking
and  unloading  facilities,  and a one  million  barrel LNG storage  tank.  When
completed, the project will be the first in the world to combine a private power
plant and an LNG terminal as part of the same project financing. It will also be
the first  opportunity for natural gas -- the cleanest of all fossil fuels -- to
be used to generate electricity in Puerto Rico, which presently uses oil for 98%
of its power generation.  Construction  activities will begin immediately,  with
commercial operations slated for the 4th quarter of 1999.

Power  produced by the facility  will be sold solely to the Puerto Rico Electric
Power  Authority  (PREPA) under a 22 year power  purchase  agreement.  Miguel A.
Cordero,  executive  director  of  PREPA,  considers  the  culmination  of  this
financial process to be a solid step towards the  diversification of sources of
electricity, a principal goal of the authority.

"The  construction of the EcoElectrica  Project will not only provide our system
with additional highly reliable capacity to meet the increasing  demands for the
next  century,  but  will  mark a  historic  moment  in the  development  of our
electrical system, which frees us of the dependency on oil," Cordero stated.

In addition to the power plant and the LNG facility,  the  EcoElectrica  Project
includes  a  desalination   plant  that  will  utilize  waste  heat  to  produce
approximately  two  million  gallons of clean water per day for use in the power
plant and to supplement  the public water supplies in the area. The project will
generate   over  500  jobs  during  the   construction   phase  and   contribute
significantly to the local economy.

"We are very pleased we are getting an opportunity to contribute to the island's
fuel diversification and to the revitalization of the Penuelas/Guayanilla area,"
said Mark Lerdal, CEO and president of KENETECH Corp.

"We are also very pleased to see this project  brought to financial  closure and
construction  underway,"  said  Rebecca  P.  Mark,  chairman  and  CEO of  Enron
International.  "It will provide a clean,  reliable and economically  attractive
power  source for Puerto Rico and  significantly  reduce  greenhouse  gases and
other pollutants on the island."

The project will be  constructed  on a turnkey basis by an Enron  affiliate.  As
part of the financial closing, KENETECH's CNF Industries subsidiary sold its 50%
interest in the  construction  contract to Enron for $15  million  plus  accrued
expenses.  Approximately $600 million of non-recourse construction and permanent
financing for the project is being provided on a fully underwritten basis by ABN
AMRO Bank and Bank Paribas.




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Enron Corp., one of the world's largest  integrated  natural gas and electricity
companies with approximately $23 billion in assets,  operates one of the largest
natural  gas  transmission  systems in the world;  is the  largest  marketer  of
natural  gas and  electricity  in North  America;  is a leading  participant  in
liberalized  energy  markets in the  United  Kingdom  and the Nordic  Countries;
markets  natural  gas  liquids  worldwide;  manages  the  largest  portfolio  of
fixed-price  natural gas risk  management  contracts in the world;  is among the
leading entities  arranging new capital to the energy industry;  owns a majority
interest  in  Enron  Oil  &  Gas  Company,   one  of  the  largest   independent
(non-integrated) exploration and production companies in the United States; owns
and manages  operating power plants and natural gas pipelines  around the world;
is one of the largest independent developers and producers of electricity in the
world;  and is a major  supplier  of solar and wind  energy  worldwide.  Enron's
internet  address  is  www.enron.com  and its common  stock is traded  under the
ticker symbol, "ENE."


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