UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1997
Commission File Number 0-21304
RIDGEWOOD ELECTRIC POWER TRUST II
(Exact name of registrant as specified in its charter.)
Delaware, U.S.A. 22-3206429
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(201) 447-9000
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days.
YES [X] NO [ ]
<PAGE>
PART I. - FINANCIAL INFORMATION
RIDGEWOOD ELECTRIC POWER TRUST II
BALANCE SHEETS
(Unaudited)
[CAPTION]
June 30, December 31,
1997 1996
[S] [C] [C]
Assets
Investments in project
development and power
generation projects $12,609,151 $16,116,582
Cash and cash equivalents 3,189,092 0
Equipment power equipment 54,125 331,018
Short-term portion of
notes receivable 365,228 0
Long-term portion of
notes receivable 2,334,772 0
Other assets 4,384 18,641
Total assets $18,556,752 $ 16,466,241
Liabilities and Share-
holders' Equity
Accounts payable and
accrued expenses $ 18,602 $ 112,482
Due to affiliates 58,456 0
77,058 112,482
Shareholders' equity:
Shareholders' equity
(235.3775 shares issued
and outstanding) 18,496,140 16,391,464
Managing shareholder's
accumulated deficit (16,446) (37,705)
Total shareholders'
equity 18,479,694 16,353,759
Total liabilities and
shareholders' equity $ 18,556,752 $ 16,466,241
[FN]
See Accompanying Notes to Financial Statements
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST II
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS AND QUARTERS
ENDED JUNE 30, 1997 AND JUNE 30, 1996
(Unaudited)
<CAPTION>
Six months Quarter Six months Quarter
ended June 30, ended ended June 30, ended June 30,
1997 June 30, 1996 1996
1997
<S> <C> <C> <C> <C>
Revenue:
Income from power
generating projects $ 983,500 $ 454,231 $ 1,217,261 $ 535,270
Gain on sale of RSD
Power Partners, L.P. 2,594,316 2,594,316 0 0
Interest and dividend
income 6,700 4,704 201 60
Total revenues 3,584,516 3,053,251 1,217,462 535,330
Expenses:
Project due diligence costs 5,046 2,375 0 0
Management fee 170,363 170,363 201,457 77,911
Accounting and legal fees 17,380 8,283 16,500 9,000
Insurance 1,670 1,331 19,143 2,992
Writedown of electric power
equipment 281,018 0 0 0
Miscellaneous 10,875 7,009 7,563 4,923
486,352 189,361 244,663 94,826
Net income $ 3,098,164 $ 2,863,890 $ 972,799 $ 440,504
Allocation to:
Shareholders $ 3,067,183 $ 2,835,251 $ 963,071 $ 436,099
Managing shareholder 30,981 28,639 9,728 4,405
$ 3,098,164 $ 2,863,890 $ 972,799 $ 440,504
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST II
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS AND QUARTER
ENDED JUNE 30, 1997 AND JUNE 30, 1996
(Unaudited)
[CAPTION]
Six months Six months
ended June 30, ended June 30,
1997 1996
[S] [C] [C]
Cash flows from operating
activities:
Net income (loss) $3,098,164 $ 972,799
Adjustments to
reconcile net income
(loss) to cash provided
by (used in) in
operating activities:
Sale of investment in
RSD Power Partners, L.P. 3,507,275 0
Writedown of electric
power equipment 276,893 0
Purchase of investments in
electric power projects 0 (60,431)
Changes in assets &
liabilities:
(Increase) decrease in
other assets (4,384) 31,200
(Decrease) increase in
accounts payable and
accrued expenses (20,458) (2,008)
Increase in due to affiliates 3,831 0
(Increase) in notes receivable (2,700,000) 0
Total adjustments 1,063,157 (31,239)
Net cash provided by (used in)
operating activities 4,161,321 941,560
Cash used in
financing activities:
Cash distributions to
shareholders (972,229) (1,054,140)
Net cash provided by (used
in) financing activities (972,229) (1,054,140)
Net increase (decrease) in
cash and cash equivalents 3,189,092 (112,580)
Cash and cash equivalents
beginning of year 0 101,975
Cash and cash equivalents
end of period $3,189,092 $ (10,605)
[FN]
See Accompanying Notes to Financial Statements
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST II
NOTES TO FINANCIAL STATEMENTS
1. Organization and Purpose
Nature of business
Ridgewood Electric Power Trust II (the "Trust") was formed as a
Delaware business trust on November 20, 1992, by Ridgewood Energy
Holding Corporation acting as the Corporate Trustee. The managing
shareholder of the Trust is Ridgewood Power Corporation. The
Trust began offering shares on January 4, 1993. The Trust
commenced operations on April 29, 1993 and discontinued its
offering of Trust shares on January 31, 1994.
The Trust was organized to invest in independent power generation
facilities and in the development of these facilities. These
independent power generation facilities include cogeneration
facilities which produce electricity, thermal energy and other
power plants that use various fuel sources (except nuclear). The
power plants sell electricity and thermal energy to utilities and
industrial users under long-term contracts.
"Business Development Company" election
Effective April 29, 1993, the Trust elected to be treated as a
"Business Development Company" under the Investment Company Act of
1940 and registered its shares under the Securities Exchange Act
of 1934.
2. Summary of Significant Accounting Policies
Interim Financials
The financial statements for the periods ended June
30, 1997 and 1996 included herein have been prepared by the Trust
without audit pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, these statements
reflect all adjustments (consisting only of normal recurring
entries) which are, in the opinion of management, necessary for a
fair statement of the financial results for the interim periods.
Certain information and notes normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
such rules and regulations, although the Trust believes that the
disclosures are adequate to make the information presented not
misleading. These financial statements should be read in
conjunction with the financial statements and the notes thereto
included in the Trust's Annual Report on Form 10-K for the year
ended December 31, 1996 (Form 10-K).
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from the estimates.
Investments in project development and power generation limited
projects
The Trust holds investments in power generation projects, which
are stated at fair value. Due to the non-liquid nature of the
investments, the fair values of the investments are assumed to
equal cost unless current available information provides a basis
for adjusting the carrying value of the investments.
Revenue recognition
Income from investments is recorded when received. Interest and
dividend income are recorded as earned.
<PAGE>
Ridgewood Electric Power Trust II
Notes to Financial
Statements
Offering costs
Costs associated with offering Trust shares (selling commissions,
distribution and offering costs) are recorded as a reduction of
the shareholders' capital contributions.
Cash and cash equivalents
The Trust considers all highly liquid investments with maturities
when purchased of three months or less as cash and cash
equivalents.
Due diligence costs relating to potential power project
investments
Costs relating to the due diligence performed on potential power
project investments are initially deferred, until such time the
Trust determines whether or not it will make an investment in the
respective project. Costs relating to completed projects are
capitalized and costs relating to rejected projects are expensed
at the time of rejection.
Income taxes
No provision is made for income taxes in the accompanying
financial statements as the income or losses of the Trust are
passed through and included in the tax returns of the individual
shareholders of the Trusts.
Reclassification
Certain items in previously issued financial statements have been
reclassified for comparative purposes.
3. Electric Power Equipment
The Trust purchased various used electric power generation
equipment to be used in potential power generation projects. In
January 1995, power generating equipment with a fair value of
$1,300,000 was transferred to the Sunnyside (Monterey) project as
part of its purchase price. In October 1995, the Trust sold to a
related party power generating equipment with a cost of $438,855
for $455,182. The remaining equipment is held in storage and
depreciation is not recorded. As of December 31, 1996, the cost
of the remaining equipment was $331,018. In March 1997, the Trust
wrote-down the remaining equipment to its estimated net realizable
value of $50,000.
4. Investments in Project Development and Power Generation
Projects
The following investments in power generation and waste transfer
projects are stated at fair value:
June 30, December 31,
1997 1996
Power generation and
waste transfer projects:
Pittsfield Investors
Limited Partnership $ 2,347,321 $2,347,330
RSD Power
Partners, L.P. 0 3,507,275
B-3 Limited
Partnership 4,001,696 4,001,843
Sunnyside
Cogeneration Partners, L.P. 5,308,467 5,308,467
California Pumping
Project 951,667 951,667
$ 12,609,151 $16,116,582
<PAGE> Ridgewood Electric Power Trust II
Notes to Financial
Statements
Investments in power generation limited partnerships
Pittsfield Investors Limited Partnership (known as the Berkshire
project)
On January 4, 1994, the Trust made a limited partnership
investment in this partnership, which was formed to acquire an
operating facility, located in Pittsfield, Massachusetts. The
facility, which has been operating since 1981, burns municipal
solid waste supplied by the City of Pittsfield and surrounding
communities. The facility has a long-term supply
agreement with the City of Pittsfield, which expires in November
2004, under which the City makes payments to the facility for
receiving the waste. The facility generates additional revenue by
selling steam produced from the waste burning process to a nearby
paper mill under a long-term contract, which expires in November
2004.
In exchange for its investment, the Trust is entitled to receive
annually a preferred distribution from available cash from the
facility equal to 15% of its investment. In the event that in any
given year available net cash flow from the project does not cover
the amount of the preferred minimum return, the amount of such
shortfall is payable on a priority basis out of any available net
cash flow in subsequent years. The Trust may be entitled to
receive additional distributions from any additional net cash
flow. The aggregate cost of the Trust's investment in the
partnership was $2,347,330. The Trust received distributions of
$183,769, $351,451, and $446,888 from the project for the periods
ended June 30, 1997, December 31, 1996 and December 31, 1995,
respectively.
RSD Power Partners, L.P. (known as the San Diego project)
On March 21, 1994, the Trust made a limited partnership investment
in the partnership, which was formed to acquire an operating
facility, located in San Diego, California. The facility, which
has been operating since 1972, sells chilled water used in the
central air conditioning of 13 commercial, retail and government
office buildings connected by a closed underground pipeline loop
owned and used exclusively by the San Diego project.
In exchange for its investment, the Trust was entitled to receive
annually the greater of either 80% of net profits from the project
or a preferred minimum return of 25% on its total investment. The aggregate
cost of the Trust's investment in the partnership was $3,507,275. The Trust
received distributions of $50,000 and $618,080 from the project
for the periods ended June 30, 1997 and December 31, 1996.
On June 25, 1997, the Trust sold its entire partnership interest in RSD Power
Partners, L.P. to subsidiaries of NRG Energy, Inc. of Minneapolis, Minnesota
for $6,150,000. The Trust received $3,450,000 in cash and $2,700,000 in the
form of an 8% promissory note payable monthly over six years. The sale
resulted in a gain of $2,594,316.
B-3 Limited Partnership (known as the Columbia project)
On August 31, 1994, the Trust made a limited partnership
investment in this partnership, which was formed to construct and
operate a municipal waste transfer station, located in Columbia
County, New York. The project commenced operations in January
1995.
In exchange for its investment, the Trust is entitled to receive
annually a preferred distribution of available net cash flow from
the facility equal to 18% of its investment. In the event in any
given year available net cash flow from the project does not cover
the amount of the preferred minimum return, the amount of such
shortfall is payable on a priority basis out of any available net
cash flow in subsequent years. The Trust may be entitled to
receive additional distributions from any additional net cash
flow. The aggregate cost of the Trust's investment in the
partnership was $4,001,843. The Trust received distributions of
$217,000,
<PAGE>
Ridgewood Electric Power Trust II
Notes to Financial
Statements
$515,000 and $510,000 from the project for the periods ended June
30, 1997, December 31, 1996 and December 31, 1995, respectively.
Sunnyside Cogeneration Partners, L.P. (known as the Monterey
project)
On January 9, 1995, the Trust acquired 100% of the existing
partnership interests of Sunnyside Cogeneration Partners, L.P.,
which owns and operates a 5.5 megawatt electric cogeneration
facility, located in Monterey County, California. The initial
cost of the investment was $5,308,467, which consisted of
$3,782,000 of cash, $226,467 of due diligence
and other costs, and electric power equipment valued at
$1,300,000. The original cost of the equipment contributed by the
Trust was $1,599,940. In 1994, the Trust wrote down the value of
the equipment by $299,940. The Trust received distributions of
$407,375, $757,498 and $606,536 from the project for the periods
ended June 30, 1997, December 31, 1996 and December 31, 1995,
respectively.
California Pumping Project
On June 30, 1995, the Trust acquired a package of natural gas
fueled diesel engines which drive deep irrigation well pumps in
Ventura County, California. The engines' shaft horsepower-hours
are sold to the operator at a discount from the equivalent
kilowatt hours of electricity. The Trust receives a distribution
of $0.02 per equivalent kilowatt up to 3,000 running hours per
year and $0.01 per equivalent kilowatt for each additional running
hour per year. Total investment at December 31, 1996 and 1995,
was $951,667 for an equivalent of 299.8 kilowatts of power. The
operator pays for fuel, maintenance, repair and replacement. The
Trust received distributions of $52,601, $129,179 and $105,742 from
the project for the periods ended June 30, 1997, December 31,
1996 and December 31, 1995 respectively.
Investments in project development limited partnerships
The Trust made investments in several limited partnerships with
other major participants in the power industry to provide access
to investments in larger projects in which these participants
would take the leading role in the acquisition or development of
such projects. In 1994, the Trust wrote off its investment in
these limited partnerships of $1,065,798.
In 1997 the ABB Funding Partners, L.P. refunded the Trust $73,294
of its original capital investment of $101,850. The refund has
been recorded as income for the period ended June 30, 1997.
RE Power Partners, L.P. (known as the Blue Ridge project)
In 1993, the Trust entered into a limited partnership agreement to
provide construction funding of a 3 megawatt natural gas-fueled
cogeneration project. During 1994, after further review of the
project the Trust decided not to proceed with the construction
funding. Total costs, excluding equipment written down separately
and transferred to the Sunnyside Cogeneration Partners, L.P.,
incurred by the Trust and subsequently written off in 1994 totaled
$331,552.
5. Transactions With Managing Shareholder And Affiliates
The Trust also pays to the managing shareholder a distribution and
offering fee in an amount up to 5% of each capital contribution
made to the Trust. This fee is intended to cover legal,
accounting, consulting, filing, printing, distribution, selling
and closing costs for the offering of the Trust. These fees were
recorded as a reduction in shareholders' capital contributions.
<PAGE>Ridgewood Electric Power Trust II
Notes to Financial
Statements
The Trust pays to the managing shareholder an investment fee of 2%
of each capital contribution made to the Trust. The fee is
payable to the managing shareholder for its services in
investigating and evaluating investment opportunities and
effecting transactions for investing the capital of the Trust.
The Trust entered into a management agreement with the managing
shareholder, under which the managing shareholder renders certain
management, administrative and advisory services and provides
office space and other facilities to the Trust. As compensation
to the managing shareholder, the Trust pays the managing
shareholder an annual management fee equal to 2.5% of the net
asset value of the Trust payable monthly upon the closing of the
Trust. For the periods ended June 30, 1997, December 31, 1996
and December 31, 1995, the Trust paid management fees to the
managing shareholder of $170,363, $328,952, and $494,023,
respectively.
Under the Declaration of Trust, the managing shareholder is
entitled to receive each year 1% of all distributions made by the
Trust (other than those derived from the disposition of Trust
property) until the shareholders have been distributed in respect
of the year an amount equal to 15% of their equity contribution.
Thereafter, the managing shareholder is entitled to receive 20% of
the distributions for the remainder of the year. The managing
shareholder is entitled to receive 1% of the proceeds from
dispositions of Trust properties until the shareholders have
received cumulative distributions equal to their original
investment ("Payout"). In all cases, after Payout the managing
shareholder is entitled to receive 20% of all remaining
distributions of the Trust.
Where permitted, in the event the managing shareholder or an
affiliate performs brokering services in respect of an investment
acquisition or disposition opportunity for the Trust, the managing
shareholder or such affiliate may charge the Trust a brokerage
fee. Such fee may not exceed 2% of the gross proceeds of any such
acquisition or disposition. No such fees were paid through
December 31, 1996.
The managing shareholder purchased 1.45 shares of the Trust for
$121,800. Through the closing of the Trust's offering on January
3, 1994, commissions and placement fees of $248,807 were earned by
Ridgewood Securities Corporation, an affiliate of the managing
shareholder.
On February 28, 1997 Michael Cutbirth, an individual, sued the Managing
Shareholder in the Superior Court of California, Kern County, claiming
unspecified damages (which may include a claim for an equity interest)
for breach of an alleged confidentiality agreement relating to the
acquisition of the Monterey Project. The Managing Shareholder has
successfully removed the lawsuit to the United States District Court for
the Eastern District of California. Discovery has begun. The
Managing Shareholder believes that it has ample defenses to Mr.
Cutbirth's claims and that it will defend the action vigorously.
In 1996, under an Operating Agreement with the Trust, Ridgewood
Power Management Corporation ("Ridgewood Management"), an entity
related to the managing shareholder through common ownership,
provides management, purchasing, engineering, planning and
administrative services to the power generation project operated
by the Trust. Ridgewood Management charges the project at its
cost for these services and for the allocable amount of certain
overhead items. Allocations of costs are on the basis of
identifiable direct costs, time records or in proportion to amount
invested in projects managed by Ridgewood Management.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST II
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q, like some other statements made by
the Trust from time to time, has forward-looking statements. These
statements discuss business trends and other matters relating to the
Trust's future results and the business climate. In order to make these
statements, the Trust has had to make assumptions as to the future.
It has also had to make estimates in some cases about events that have
already happened, and to rely on data that may be found to be inaccurate
at a later time. Because these forward-looking statements are based on
assumptions, estimates and changeable data, and because any attempt to
predict the future is subject to other errors, what happens to the Trust
in the future may be materially different from the Trust's forward-
looking statements.
The Trust therefore warns readers of this document that they should not
rely on these forward-looking statements without considering all of the
things that could make them inaccurate. The Trust's other filings with
the Securities and Exchange Commission and its Confidential Memorandum
discuss many (but not all) of the risks and uncertainties that might
affect these forward-looking statements.
Some of these are changes in political and economic conditions, federal
or state regulatory structures, government taxation, spending and
budgetary policies, government mandates, demand for electricity and
thermal energy, the ability of customers to pay for energy received,
supplies of fuel and prices of fuels, operational status of plant,
mechanical breakdowns, availability of labor and the willingness of
electric utilities to perform existing power purchase agreements in
good faith.
By making these statements now, the Trust is not making any commitment
to revise these forward-looking statements to reflect events that happen
after the date of this document or to reflect unanticipated future
events.
Dollar amounts in this discussion are generally rounded to the nearest
$1,000.
Six months ended June 30, 1997 versus six months ended June 30, 1996
Results of operations
The Trust carries its investment in the Projects it owns at fair value and
does not consolidate its financial statements with the financial statements of
the Projects. Revenue is recorded by the Trust as cash distributions are
received from the Projects. Trust revenues may fluctuate from period to
period depending on the operating cash flow generated by the Projects and the
amount of cash retained to fund capital expenditures. In addition, income and
cash flow earned by the Projects located in California is seasonal, peaking in
the third quarter of the year as summer heat increases demand for electricity
and water for irrigation. Electricity prices are at peak levels and fall in
the fourth and first quarters, when prices for electricity are at lower off-
peak levels and equipment maintenance is performed.
For the six months ended June 30, 1997, the Trust's net income increased by
$2,125,000 (218.5%) from the same period in 1996. The increase reflects a
gain of $2,594,000 on the sale of its entire partnership interest in RSD Power
Partners, L.P., a $233,000 (19.2%) decrease in income received from other
Projects in which the Trust has invested, an increase of $6,000 in interest
income and an increase of $242,000 in Trust expenses. Income from the
Columbia Project was lower by $143,000, the San Diego Project by $254,000 and
the Monterey Project by $27,000. Income from the Pump Services Project was
higher by $22,000 and from the Berkshire Project by $96,000. In addition, the
Trust received a $73,000 distribution from a project development limited
partnership for which the Trust had previously written off its investment.
Interest income increased because cash was consolidated at the Trust level
during the first half of 1997 and invested in higher yielding investment
accounts.
For the six months ended June 30, 1997, the Trust's expenses increased by
$242,000 from the same period in 1996. Expense increased by $281,000,
reflecting the write-down of electric power generation equipment to its net
realizable value of $50,000, and the management fee payable to the Managing
Shareholder decreased by $31,000. There were no material changes in the other
expense categories.
Liquidity and Capital Resources
For the six months ended June 30, 1997, the Trust's cash and cash equivalents
increased by $3,189,000, reflecting $3,450,000 of cash received from the sale
of its entire partnership interest in RSD Power Partners, L.P., $990,000 of
income from other power generating projects and interest income, net of
$205,000 of Trust cash operating expenses and $972,000 of cash distributions
to shareholders. A special distribution of $2,942,000 was made to
shareholders in July 1997 from the proceeds of the sale of the San Diego
Project.
The Trust is in the process of obtaining a $750,000 line of credit, which it
plans to have in place in the third quarter of 1997. The line of credit is
being obtained in order to allow the Trust to operate using a minimum amount
of cash, maximize the amount invested in Projects and maximize cash
distributions to shareholders.
Other than investments of available cash in power generation Projects,
obligations of the Trust are generally limited to payment of the management
fee to the Managing Shareholder, payments for certain accounting and legal
services to third persons and distributions to shareholders of available
operating cash flow generated by the Trust's investments. The Trust's policy
is to distribute as much cash as is prudent to shareholders. Accordingly, the
Trust has not found it necessary to retain a material amount of working
capital. The amount of working capital retained will be further reduced by
obtaining a line of credit.
Other than investments of available cash in power generation Projects,
obligations of the Trust are generally limited to payment of the
management fee to the Managing Shareholder, payments for certain
accounting and legal services to third persons and distributions to
shareholders of available operating cash flow generated by the Trust's
investments. The Trust's policy is to distribute as much cash as is
prudent to shareholders. Accordingly, the Trust has not found it
necessary to retain a material amount of working capital. The amount of
working capital retained will be further reduced by obtaining a line of
credit.
Certain Industry Trends
The industry trend toward deregulation of the electric power generating
and transmission industries has accelerated after the adoption of Order
888 by the Federal Energy Regulatory Commission ("FERC") on April 24,
1996.
A number of major states, including California, have adopted proposals
to allow "retail wheeling," which would allow any qualified generator to
use utility transmission and distribution networks to sell electricity
directly to utility customers. As a result, profound changes
in the industry are occurring, marked by consolidations of utilities,
large scale spin-offs or sales of generating capacity, reorganizations
of power pools and transmission entities, and attempts by electric
utilities to recover stranded costs and alter power purchase contracts
with independent power producers such as the Trust.
It is too early to predict the effects of these trends and others on the
Trust's business. A critical issue for the Trust, however, is whether
any action will be taken to modify its existing power purchase contracts
or to shift costs to independent power producers. To date, neither FERC
nor the state authorities have adopted measures that would impair power
purchase contracts and the Trust is not aware of any other such action
by regulatory authorities in other states where it does business.
Legislative and regulatory action is unpredictable and at any time
federal or state legislatures or regulators could adopt measures that
would be materially adverse to the Trust's business. Further, volatile
market conditions could adversely affect the Trust's operations and the
actions of other industry participants, such as electric utilities,
which in turn could affect the Trust.
Natural gas prices, which peaked in early 1997, fell somewhat toward the
end of the first quarter of 1997. However, prices remain elevated and
have not moderated to the extent seen in prior late spring periods. If
the Trust is unable to obtain long-term supplies of gas at favorable
prices, it runs the risk of having to purchase gas at elevated prices
later in 1997. In that event, the profitability of Projects fueled by
natural gas could be significantly impaired.
PART II - OTHER INFORMATION
Item #1 Legal Proceedings
On February 28, 1997 Michael Cutbirth, an individual, sued the Managing
Shareholder in the Superior Court of California, Kern County, claiming
unspecified damages (which may include a claim for an equity interest)
for breach of an alleged confidentiality agreement relating to the
acquisition of the Monterey Project. The Managing Shareholder has
successfully removed the lawsuit to the United States District Court for
the Eastern District of California. Discovery has begun. The
Managing Shareholder believes that it has ample defenses to Mr.
Cutbirth's claims and that it will defend the action vigorously.
Item #6 Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27. Financial Data Schedule
B. Reports on Form 8-K
A current report on Form 8-K was filed on July 9, 1997
reporting the divestiture of the San Diego Project.
RIDGEWOOD ELECTRIC POWER TRUST II
SIGNATURES
Pursuant to the requirement 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.
RIDGEWOOD ELECTRIC POWER TRUST II Registrant
August 14, 1997 By /s/ Martin V. Quinn
Date Martin V. Quinn
Senior Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as principal
financial officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from the Registrant's unaudited interim financial
statements for the quarter ended June 30, 1997 and is
qualified in its entirety by reference to those financial
statements.
</LEGEND>
<CIK> 0000895993
<NAME> RIDGEWOOD ELECTRIC POWER TRUST II
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,189,092
<SECURITIES> 14,943,823<F1>
<RECEIVABLES> 365,228
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,554,310
<PP&E> 54,125<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 18,556,752
<CURRENT-LIABILITIES> 77,058
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 18,479,694<F3>
<TOTAL-LIABILITY-AND-EQUITY> 18,556,752
<SALES> 0
<TOTAL-REVENUES> 3,584,516
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 486,352
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,098,164
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,098,164
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,098,164
<EPS-PRIMARY> 13,162.53
<EPS-DILUTED> 13,162.53
<FN>
<F1>Investments in power project partnerships and note receivable from
sale of San Deigo Project.
<F2>Equipment in storage.
<F3>Represents Investor Shares of beneficial interest in
Trust with capital accounts of $18,496,140 less managing
shareholder's accumulated deficit of $16,446.
</FN>
</TABLE>
