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 September 30, 1996
Commission file Number 0-24240
RIDGEWOOD ELECTRIC POWER TRUST I
(Exact name of registrant as specified in its charter.)
Delaware, U.S.A. 22-3105824
(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>
<TABLE>
PART I. - FINANCIAL INFORMATION
RIDGEWOOD ELECTRIC POWER TRUST I
BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
Assets
Cash $ 39,588 $ 5,643
Investments in power
project partnerships 7,207,846 7,207,846
Due from affiliates 473,127 317,817
Other assets 0 0
Total assets $ 7,720,561 $ 7,531,306
Liabilities and Share-
holders' Equity
Accounts payable and
accrued expenses $ 41,312 $ 44,812
Due to affiliates 939,867 570,057
981,179 614,869
Shareholders' equity
(105.5 shares issued
and outstanding) 6,762,147 6,937,431
Managing shareholder's
accumulated deficit (22,765) (20,994)
Total shareholders' equity 6,739,382 6,916,437
Total liabilities and
shareholders' equity $ 7,720,561 $ 7,531,306
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST I
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
AND SEPTEMBER 30, 1995
(Unaudited)
<CAPTION>
Nine months Quarter ended Nine months
Quarter ended
ended Septem-, September 30, ended Septem-
September 30,
ber 30, 1996 1996 ber 30, 1995
1995
______________ ______________
___________
<S> <C> <C> <C> <C>
Revenue:
Income from project
partnerships $ 489,501 $ 250,000 $ 800,158
499,136
Interest income 306 303 (69,070)
(129,186)
Total revenue 489,807 250,303 731,118
369,950
Expenses:
Trustee fees 7,500 2,500 0
0
Management fee 14,418 0 64,882
21,634
Administrative and
other expenses 45,313 10,634 22,692
22,692
Total expenses 67,231 13,134 90,645
44,326
Net income (loss) $ 422,576 $ 237,169 $ 640,473
$325,624
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST I
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
AND SEPTEMBER 30, 1995
(Unaudited)
<CAPTION>
Nine months Quarter ended Nine months
Quarter ended
ended Septem- September 30, ended Septem-
September 30,
ber 30, 1996 1996 ber 30, 1995
1995
____________ ____________ _____________
______________
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss) $ 422,576 $237,169 $ 670,473
$325,624
Adjustments to
reconcile net income
to cash provided (used)
in operating activities:
Changes in assets &
liabilities:
Decrease (increase) in
interest receivable 0 0 70,000
129,187
Decrease (increase) in
due from affiliates (155,310) 0 0
0
Increase (decrease) in
accounts payable and
accrued expenses (3,500) (10,000) (91,920)
18,567
Increase in due
to affiliates 369,810 0 345,517
227,038
Total adjustments 211,000 10,000 (323,597)
(374,792)
Net cash provided (used)
by operating activities
before investments 633,576 247,169 967,070
700,416
Investments in power
projects and partnerships 0 0 (524,420)
(256,857)
Net cash provided (used)
by operating activities 633,576 247,169 439,650
443,559
Cash provided by (used in)
financing activities:
Cash distributions to
Shareholders (599,631) (208,206) (570,350)
(344,069)
Net cash used in
financing activities (599,631) (208,206) (570,350)
(344,069)
Net increase (decrease) in
cash and cash equivalents 33,945 38,963 (130,700)
109,940
Cash - Beginning of period 625 5,643 240,190
0
Cash - End of period $ 39,588 $ 39,588 $ 109,940
$109,940
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST I
NOTES TO FINANCIAL STATEMENTS
1. Organization and Purpose
Nature of business
Ridgewood Energy Electric Power, L.P. (the "Partnership")
was formed as a Delaware limited partnership on March 6,
1991 by Ridgewood Power Corporation acting as the general
partner. On April 30, 1991, Beale Lynch Power Partners Inc.
was admitted as co-general partner of the Partnership.
The partnership began offering limited partnership units in
the Partnership on May 1, 1991. The Partnership commenced
operations on September 16, 1991 and discontinued its
offering of units on March 31, 1992.
On June 15, 1994, with the approval of the partners, the
Partnership merged all of its assets and liabilities into a
newly formed trust, called Ridgewood Electric Power Trust I
(the "Trust"). Effective July 25, 1994, the Trust elected
to be treated as a "Business Development Company" ("BDC")
under the Investment Company Act of 1940 and registered its
shares under the Securities Act of 1934. In connection with
this transaction, the Trust issued 105.5 shares in exchange
for outstanding Partnership units. Ridgewood Power
Corporation is the sole managing shareholder.
The Trust has been organized to invest in independent power
generation facilities and in the development of these
facilities. These independent power generation facilities
include small power production facilities which produce
electricity from waste oil, landfill gas and water. The
power plants sell electricity to utilities under long-term
contracts.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST I
NOTES TO FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies
Investments in project development and power generation
limited partnerships
The Trust holds partnership interests in power generating
limited partnerships which are stated at fair value. Due to
the illiquidity of the investments, the fair values of the
investments are assumed to equal cost unless current
available information provides a basis for adjusting the
value of the investments.
<TABLE>
<CAPTION>
Fair values as of
9/30/96 12/31/95
<S> <C> <C>
Power generation limited
partnerships:
Stillwater Hydro Partners, L.P. $1,000,000 $1,000,000
RW Power Partners, L.P. 3,527,923 3,527,923
Brea Power Partners, L.P. 2,679,923 3,103,479
</TABLE>
Revenue recognition
Income from investments is recorded when received. Interest
and dividend income are recorded as earned.
Offering costs
Effective January 1, 1995, costs associated with offering
Trust shares (selling commissions, distribution and offering
costs) are reflected as a reduction of the shareholders'
capital contributions. Previously issued financial
statements reflected such offering costs as an expense.
Comparative accounts have been restated to reflect the
change. For the periods presented herein, net income and
total shareholders' equity are unaffected by the
restatement.
Cash and cash equivalents
The Trust considers monies invested in a U.S. Treasury Bills
Fund with daily liquidation privileges to be a cash
equivalent.
Due diligence costs relating to potential power projects
Costs relating to the due diligence performed on potential
power projects are initially deferred, until such time as
the Trust determines whether or not it will make an
investment in the respective project. Those costs relating
to an accepted project are capitalized and those costs
relating to a rejected project are expensed at that time.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST I
NOTES TO FINANCIAL STATEMENTS
Income taxes
No provision is made for income taxes in the accompanying
financial statements as the income or loss of the Trust is
included in the tax returns of the individual shareholders.
Reclassification
Certain items in previously issued financial statements have
been reclassified for comparative purposes.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST I
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 statements here.
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.
Nine months ended September 30, 1996 versus nine months ended
September 30, 1995
Results of Operations
The Trust received $490,000 of distributions from the Olinda
and South Boston Projects in the first nine months of 1996, as
compared to $800,188 of distributions in the corresponding
period of 1995. The 38.8% decrease is in part a consequence
of reduced distributions from the South Boston Project,
where during the first half of 1996 cash flow had been reinvested
in the construction and start-up of a waste oil treatment facility
and was applied in part to completion of repairs to a damaged engine.
Cash flows from that Project remained depressed in the third quarter
because of the start-up process and higher-than-expected fuel costs.
Distributions from the Olinda Project in California were
substantially reduced from the 1995 level because of
seasonal factors. The distributions in 1995 from that
Project were derived in large part from third quarter 1994
cash flow which was received by the Project in early 1995.
In 1995, a larger portion of cash flow
earned in the third quarter of 1995 by that Project was
distributed to the Trust and by the Trust to Investors
in 1995, resulting in a smaller first quarter 1996
distribution. It should be noted that the bulk of this
Project's income is earned during the third quarter because
of summer peak demand for electricity, and is distributed
to the Trust in later periods after billing and collection.
Total Trust expenses decreased 25.8% ($23,000) from the first
nine months of 1995 to the 1996 period. In response to the Trust's
need for cash, beginning in April 1996 the Managing
Shareholder waived its management fee of 2.5% of assets per
year, resulting in a $50,000 saving in the second and third quarters of
1996. The Managing Shareholder is not obligated to continue
this waiver but currently intends to do so. There was
a $19,000 increase in administrative and other expense, from the
1995 period to the 1996 period, reflecting increases in auditing and tax
return preparation expenses.
The Trust does not consolidate its financial statements
with those of the Projects it owns and does not include the
Projects' revenue, expense and other items in its financial
statements. Revenue from Projects is only recognized as it
is received as distributions by the Trust, and thus revenues
may fluctuate as the result of delays or accelerations of
distributions from Projects.
Liquidity and Capital Resources
During 1995, the South Boston Project had significant
requirements for capital as the result of catastrophic
failure of two engines and the concurrent construction
of a waste oil treatment plant for that facility. As a
result, distributions from South Boston to the Trust were
reduced. The Managing Shareholder provided bridge financing
as necessary to the Trust, which is reflected in the "due to
affiliates" items in the financial statements. The Managing
Shareholder provided $155,000 for these purposes during the
first quarter of 1996 and an additional $17,500 in the
second quarter.
The South Boston Project filed property damage and business
interruption insurance claims against its insurer for the
engine failures and has received a total of $384,000 through
June 1996 and a payment of $160,000, representing
substantially all of the amount allowed by the insurer,
through July 1996. The Trust does not anticipate
any additional material recovery on the claim. These
proceeds have been used at the South Boston Project to fund
repairs and to substantially repay bridge financing extended
by the Managing Shareholder to that Project. At this time,
the Managing Shareholder believes that the major demands for
capital at South Boston have ended.
<PAGE>
The Managing Shareholder believes that Trust cash flow for
the remainder of 1996, comprised mainly of distributions
from the Olinda Project and anticipated distributions from
the South Boston Project, together with its own resources,
will be sufficient to meet the Trust's liquidity and capital
needs, along with distributions to Investors at the current
rate, for the remainder of 1996.
Although the completion of the waste oil processing plant at
South Boston removes a number of uncertainties regarding
that plant's operation, the issues identified at Items 1 and
3 of the Trust's Annual Report on Form 10-K for the year
ended December 31, 1995 remain. The Trust is currently
reviewing its investments in light of recent regulatory
developments and the negotiations discussed at Item #1 of
Part II of this Quarterly Report and expects that it will report
to its Investors at the end of 1996.
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. Other states, such as Massachusetts, New Hampshire and
New York, are preparing their own initiatives. 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
California 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.
It must be remembered, however, that legislative and regulatory action is
unpredictable and that 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, that affect the Trust.
<PAGE>
PART II - OTHER INFORMATION
Item #1 Legal Proceedings
Please refer to Item 3 of the Annual Report on Form 10-K for
the year ended December 31, 1995, as to legal proceedings.
As disclosed there, Virginia Electric Power Company ("Vepco") had
improperly terminated the power purchase contract for the South Boston
Project, and the federal district court upheld the Trust's position that
the termination was wrongful. Vepco appealed to the federal Court of Appeals
for the Fourth Circuit. In September 1996, the court of appeals remanded the
case to the district court for factual findings as to whether federal
jurisdiction existed. Subsequent to the remand, Vepco proposed negotiations
to settle the case, which are ongoing. The Trust anticipates that the
negotiations will be completed before the end of 1996 and that the matter
will be resolved favorably to the Trust.
Item #6 Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27. Financial Data Schedule
B. Reports on Form 8-K
No current reports have been filed on Form 8-K
during this quarter.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST I
SIGNATURES
Pursuant to the requirement of the Securities Exchange
Act of 1934, the registrant has duly cause this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
RIDGEWOOD ELECTRIC POWER TRUST I
Registrant
November 13, 1996 By /s/ Thomas R. Brown
Date Thomas R. Brown
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 nine months ended September 30, 1996 and is
qualified in its entirety by reference to those financial
statements.
</LEGEND>
<CIK> 0000924386
<NAME> RIDGEWOOD ELECTRIC POWER TRUST I
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 39,588
<SECURITIES> 7,207,846<F1>
<RECEIVABLES> 473,127
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 512,715
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,720,561
<CURRENT-LIABILITIES> 981,179
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 6,739,382<F2>
<TOTAL-LIABILITY-AND-EQUITY> 7,720,581
<SALES> 0
<TOTAL-REVENUES> 489,807
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 67,231
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 422,576
<INCOME-TAX> 0
<INCOME-CONTINUING> 422,576
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 422,576
<EPS-PRIMARY> 4005.46
<EPS-DILUTED> 4005.46
<FN>
<F1>Investments in power project partnerships.
<F2>Represents Investor Shares of beneficial interest in
Trust with capital accounts of $ 6,762,147 less managing
shareholder's accumulated deficit of $22,765.
</FN>
</TABLE>
