TRIGEN ENERGY CORP
10-Q, 1999-08-13
STEAM & AIR-CONDITIONING SUPPLY
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               SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C.  20549

                    -----------------------------

                           FORM 10-Q

[  X  ]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

              For the quarterly period ended June 30, 1999

                               OR

[      ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

     For the transition period from            to
                                    ---------      ---------

                  Commission File No. 1-13264

                   TRIGEN ENERGY CORPORATION
     (Exact name of Registrant as specified in its charter)

       Delaware                                  13-3378939
(State or other jurisdiction of              (I.R.S. Employer
incorporation or organization)           Identification Number)

       One Water Street
      White Plains, New York                 10601-1009
(Address of principal executive offices)      (Zip Code)

                         (914) 286-6600
      (Registrant's telephone number, including area code)

                    ------------------------

     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
                       -------        ------
There  were  12,357,183  shares of the Registrant's  Common  Stock
outstanding as of August 11, 1999.


<PAGE>
          TRIGEN ENERGY CORPORATION AND SUBSIDIARIES

                       INDEX TO FORM 10-Q

                  Quarter Ended June 30, 1999

                                                                Page
Part I - Financial Information:

     Item 1.   Financial Statements

     Consolidated Statements of Operations for the Three
          Months and Six Months Ended June 30, 1999 and
          1998 (Unaudited)                                       3

     Consolidated Balance Sheets as of June 30, 1999
          (Unaudited) and December 31, 1998                      4

     Consolidated Statements of Cash Flows for the Six Months
          Ended June 30, 1999 and 1998 (Unaudited)               5

     Notes to Consolidated Financial Statements (Unaudited)      6

     Item 2. Management's Discussion and Analysis of
          Financial Condition and Results of Operations          9

     Item 3.Quantitative and Qualitative Disclosures
          About Market Risk                                     13


Part II - Other Information:                                    14

Signatures:                                                     15

     Disclosure Regarding Forward-Looking Statements

     THIS REPORT INCLUDES HISTORICAL INFORMATION AS WELL AS
STATEMENTS REGARDING OUR FUTURE EXPECTATIONS.  THE STATEMENTS
REGARDING THE FUTURE (REFERRED TO AS "FORWARD-LOOKING STATEMENTS")
INCLUDE AMONG OTHER THINGS STATEMENTS ABOUT ENERGY MARKETS IN
1999, COST REDUCTION TARGETS, RETURN ON CAPITAL GOALS,
DEVELOPMENT, PRODUCTION AND ACCEPTANCE OF NEW PRODUCTS AND PROCESS
TECHNOLOGIES, ONGOING AND PLANNED CAPACITY ADDITIONS AND
EXPANSIONS AND JOINT VENTURES.  IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DISCUSSED IN SUCH
FORWARD-LOOKING STATEMENTS INCLUDE: SUPPLY/DEMAND FOR OUR
PRODUCTS, COMPETITIVE PRICING PRESSURES, WEATHER PATTERNS, CHANGES
IN INDUSTRY LAWS AND REGULATIONS, COMPETITIVE TECHNOLOGY, FAILURE
TO ACHIEVE OUR COST REDUCTION TARGETS OR COMPLETE CONSTRUCTION
PROJECTS ON SCHEDULE AND YEAR 2000 COMPUTER RELATED DIFFICULTIES.
WE BELIEVE IN GOOD FAITH THAT THE FORWARD-LOOKING STATEMENTS IN
THIS REPORT HAVE A REASONABLE BASIS, INCLUDING WITHOUT LIMITATION,
MANAGEMENT'S EXAMINATION OF HISTORICAL OPERATING TRENDS, DATA
CONTAINED IN OUR RECORDS AND OTHER DATA AVAILABLE FROM THIRD
PARTIES, BUT SUCH FORWARD LOOKING STATEMENTS ARE NOT GUARANTEES OF
FUTURE PERFORMANCE AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
ANY RESULTS EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING
STATEMENTS.

 <PAGE>

<TABLE>
<CAPTION>
Part I -  Financial Information
Item 1.  Financial Statements

           TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Six Months Ended June 30, 1999 and 1998
                           Unaudited
             (In thousands, except per share data)

                                                 Three Months           Six Months
                                            --------------------    --------------------
                                             1999          1998       1999        1998
                                             ----          -----      ------------------
<S>                                          <C>          <C>          <C>        <C>
Revenues
  Thermal energy                             $ 42,291     $ 37,068      $112,976  $97,278
  Electric energy                              10,846        8,880        21,639   20,209
  Equity in earnings of non-consolidated
        partnerships                            3,878        1,323         4,024    2,026
  Fees  earned  and  other revenues             3,871        3,523         7,676    6,193
                                              ----------   ----------   ----------- ------
     Total  revenues                           60,886       50,794       146,315  125,706
                                              ----------   ----------   ----------- ------
Operating expenses
  Fuel and consumables                        23,290        20,296        61,581   52,697
  Production and operating costs              13,773        11,714        27,307   24,050
  Depreciation and amortization                6,359         5,912        12,449   11,562
  General and administrative                   9,836        10,600        20,465   19,319
                                              ----------    ---------    -------- --------
  Total operating expenses                    53,258        48,522       121,802  107,628
                                              ----------   ----------    -------- --------
Operating  income                              7,628         2,272        24,513   18,078
Other income (expense)
   Interest expense                          ( 6,126)       (5,826)      (12,406) (11,567)
                                             -----------    ---------    -------- --------
   Other income, net                          14,989         4,313        15,347    4,599
                                             -----------    ---------    -------- --------
Earnings before minority interests, income
  taxes, extraordinary item, and
  cumulative effect of a change in an
   accounting  principle                      16,491           759        27,454   11,110
Minority interests in earnings of
   subsidiaries                                  536           782         1,040    1,575
                                             ----------     ----------   --------  ------
Earnings before income taxes, extraordinary
  item and cumulative effect of a change
   in  an  accounting principle               15,955           (23)       26,414    9,535
Income  taxes                                  6,605           (10)       10,935    4,100
                                             ----------     ----------    -------  -------
Earnings before extraordinary item and
  cumulative effect of a change
   in  an  accounting principle                9,350           (13)       15,479    5,435
Extraordinary loss from extinguishment of
  debt, net of tax benefit                       - -            - -          - -     (299)
Cumulative effect of change in an
   accounting principle, net of tax benefit      - -            -  -      (4,903)     - -
                                             ----------     ----------    -------- -------
Net  earnings  (Losses)                       $9,350         $ (13)       $10,576  $ 5,136
                                             ==========     ==========    =======  =======
Basic earnings per common share
  Before extraordinary item and cumulative
  effect of a change in an accounting
   principle                                  $  .78           - -        $  1.29  $   .45
   Extraordinary loss                            - -           - -            - -    ( .03)
  Cumulative effect of change in an
   accounting principle                          - -           - -           (.41)     - -
                                             ----------     ----------     --------  ------
Net  earnings                                 $  .78        $  - -        $   .88   $  .42
                                             ==========     ==========    ========  =======
Diluted earnings per common share
  Before extraordinary item and cumulative
  effect of a change in an accounting
   principle                                  $  .78        $  - -        $  1.29   $  .45
   Extraordinary loss                            - -           - -            - -   (  .03)
  Cumulative effect of change in an
   accounting principle                          - -           - -          ( .41)    - -
                                             ----------      ----------   --------- -------
Net  earnings                                 $  .78         $ - -        $   .88    $ .42
                                             ==========      ==========   =========  ======
Average shares outstanding - basic            12,051           12,031       12,027    12,017
                                             ----------      ----------   ---------  -------
Average shares outstanding - diluted          12,073           12,031       12,037    12,019
                                             ----------      ----------   ---------  -------

    See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
             TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                             Unaudited
                 (In thousands, except share data)
                                                June  30,      December 31,
                                                   1999           1998
                                                ------------  -----------
- -
<S>                                             <C>           <C>
Current assets
  Cash and cash equivalents                     $ 14,130     $  10,074
  Accounts receivable
     Trade (less allowance for doubtful accounts
         of $1,141 in 1999 and $1,202 in 1998)    34,739        35,236
     Other                                         6,645         5,686
                                                --------        -------
     Total accounts receivable                    41,384        40,922
  Inventories                                      7,299         7,074
  Prepaid expenses and other current assets        6,393         8,016
                                                --------      ---------
     Total current assets                         69,206        66,086
Restricted cash and cash equivalents               4,576         4,623
Property, plant and equipment, net               472,872       442,755
Investment in non-consolidated partnerships       44,880        30,319
Intangible assets, net                            47,435        49,968
Deferred costs and other assets, net              23,678        24,405
                                               -----------   ----------
     Total assets                               $662,647      $618,156
                                               =========      ========

Liabilities and Stockholders' Equity
Current liabilities
  Short-term debt                               $  - -        $ 15,000
  Current portion of long-term debt               16,859        16,398
  Accounts payable                                 6,052         4,756
  Accrued income taxes                             7,070         5,728
  Accrued fuel                                     8,636        14,121
  Accrued expenses and other current liabilities  29,651        19,626
                                                ---------      ---------
     Total current liabilities                    68,268        75,629
Long-term debt                                   378,153       343,685
Other liabilities                                  3,987         4,254
Deferred income taxes                             43,911        39,422
                                                ---------     ---------
     Total liabilities                           494,319       462,990

Minority interests in subsidiaries                 9,013         7,238

Stockholders' equity
  Preferred stock-$.01 par value, authorized
    and unissued 15,000,000 shares                  - -           - -
  Common stock-$.01 par value, authorized
    60,000,000 shares, issued
    12,417,934  shares in 1999 and 1998              124           124
  Additional paid-in capital                     120,239       120,595
  Retained earnings                               46,129        36,417
  Unearned compensation - restricted stock        (4,651)       (4,967)
  Accumulated other comprehensive loss            (1,569)       (2,002)
  Treasury stock, at cost, 61,709 shares in
    1999 and 145,842 shares in 1998               (  957)       (2,239)
                                                  ---------   ----------
     Total stockholders' equity                  159,315       147,928
                                                -----------    ---------
     Total liabilities and stockholders' equity $662,647      $618,156
                                                 ========     =========

   See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

<TABLE>
<<CAPTION>
               TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS
          For the Six Months Ended June 30, 1999 and 1998
                             Unaudited
                          (In thousands)
                                                      1999       1998
                                                      ------    ------
<S>                                                 <C>         <C>
Cash flows from operating activities
  Net earnings                                      $  10,576   $ 5,136
  Reconciliation of net earnings to cash
       provided by operating activities
    Non-cash after-tax gain on litigation
        settlement                                    ( 8,518)      - -
        Extraordinary item                                - -       299
    Cumulative effect of a change in an
       accounting principle                             4,903       - -
     Depreciation and amortization                     13,265    12,361
     Deferred income taxes                              4,489       202
     Provision for doubtful accounts                      172       269
     Minority interests in subsidiaries                   782     1,575
     Changes in assets and liabilities
       Accounts receivable                                (83)   10,181
       Inventories and other current assets             1,398       417
       Accounts payable and other current liabilities   4,678    (2,347)
       Noncurrent assets and liabilities              ( 5,115)   (2,567)
                                                      --------   --------
       Net cash provided by operating activities       26,547    25,526
                                                      --------   --------

Cash flows from investing activities
  Acquisition of energy facilities.                      (354)  (44,100)
  Investments in non-consolidated partnerships           (310)     (990)
  Capital expenditures                                (40,197)  (20,133)
                                                    ----------  ---------
       Net cash used in investing activities          (40,861)  (65,223)
                                                   ----------  ---------
Cash flows from financing activities
  Short-term debt, net                                (15,000) (14,200)
  Proceeds of long-term debt                           43,470   84,850
  Payments of long-term debt                           (9,246) (24,356)
  Dividends paid                                         (864)    (863)
  Purchase of treasury stock                              (38)    (775)
  Distribution to minority interests                      - -   (1,550)
                                                      --------  -------
  Net cash provided by financing activities            18,322   43,106
                                                      --------  --------
Cash and cash equivalents
  Increase                                              4,008    3,409
  At beginning of period                               14,698   13,693
                                                      --------- --------
  At end of period                                    $18,706  $17,102
                                                      =======  =======

  Current                                             $14,130  $12,431
  Restricted                                            4,576    4,671
                                                      -------- --------
  At end of period                                    $18,706  $17,102
                                                      =======  =======

Supplemental disclosure of cash flow information
  Cash paid during the period for
       Interest                                       $11,750  $10,606
                                                      -------- --------
       Income taxes                                     2,906    1,421
                                                      --------  -------

See accompanying notes to consolidated financial statements.

</TABLE>
<PAGE>
            TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Unaudited)

1.   Basis of Presentation

     Trigen Energy Corporation and its subsidiaries ("we"),
develop, own and operate commercial and industrial energy systems
in the United States, Canada and Mexico.  We use our expertise in thermal
engineering and proprietary cogeneration processes to convert fuel
to various forms of thermal energy and electricity.  We combine
heat and power generation, producing electricity as a by-product,
for use in our facilities and for sale to customers.

     The consolidated financial statements of Trigen Energy
Corporation and its subsidiaries presented herein are unaudited.
However, such information reflects all adjustments, consisting of
normal recurring adjustments, which are, in the opinion of
management, necessary to present fairly the financial position as
of June 30, 1999, and the results of operations for the three and
six months ended June 30, 1999 and 1998 and the cash flows for the
six months ended June 30, 1999 and 1998.  The results of
operations for the three and six month periods ended June 30, 1999
and cash flows for the six month period ended June 30, 1999 are
not indicative of those to be expected for the year ending
December 31, 1999.  These financial statements should be read in
conjunction with the audited consolidated financial statements and
notes thereto for the year ended December 31, 1998 included in our
Annual Report on Form 10-K for the year ended December 31, 1998.
Certain reclassifications have been made to the 1998 financial
statements to conform to the 1999 presentation.

2.   Recent Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" ("SFAS No.
133").  SFAS No. 133 establishes accounting and reporting
standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging
activities.  We are required to adopt SFAS No. 133 for fiscal
years beginning after June 15, 2000.  Based on preliminary
analyses, we do not expect the future adoption of SFAS No. 133 to
have a material effect on results of operations and financial
condition.

3.   Supplementary Income Information

     Included in other income, net for the three months and six
months ended June 30, 1999 is a gain of $14.5 million related to
the Grays Ferry Cogeneration Partnership litigation settlement
agreement.  The gain represents the market value of the share of
Adwin's interest in the Partnership that has been surrendered to
us as part of this settlement.  (See Note 6- Legal Proceedings).
Included in other income, net for the three months and six months
ended June 30, 1998 were gains of $2.1 million from the sale of
nitrogen oxide emission allowances and $1.7 million from an
insurance settlement.


<PAGE>

            TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Unaudited)

4.        Cumulative Effect of a Change in an Accounting Principle

     Effective January 1, 1999, we adopted the American Institute
of Certified Public Accountants Statement of Position No. 98-5,
"Reporting on the Costs of Start-Up Activities" ("SOP 98-5").  SOP
98-5 requires that costs associated with start-up activities and
organizational costs be expensed as incurred.  The effect of the
adoption was an after-tax charge of $4.9 million, net of a tax
benefit of $3.5 million, to expense deferred organizational and
start-up costs as a cumulative effect of a change in an accounting
principle.

5.   Extraordinary Item

     We incurred an extraordinary charge of $.3 million, net of a
tax benefit of $.2 million, in the six months ended June 30, 1998
in connection with the early retirement of debt.

6.   Legal Proceedings

Grays Ferry Settlement

     On April 23, 1999, the Pennsylvania Court of Common Pleas of
Philadelphia County approved a settlement agreement which ended
the lawsuit brought by Grays Ferry Cogeneration Partnership (the
"Partnership"), Trigen-Schuylkill Cogeneration, Inc. and Cogen
America Schuylkill Inc. against PECO Energy Company and Adwin
(Schuylkill) Cogeneration, Inc.  The Partnership is the owner of
the Grays Ferry Cogeneration Facility located in Philadelphia,
Pennsylvania.  The Partnership, Trigen-Schuylkill and Cogen
America commenced this lawsuit in reaction to the alleged
termination by PECO on March 3, 1998, of the electric power
purchase agreements between the Partnership and PECO (the "Power
Purchase Agreements").

     Prior to the settlement we owned a one third interest in the
Partnership through our wholly owned subsidiary, Trigen-Schuylkill.
Cogen America and Adwin owned the other two-thirds interests in the
Partnership.  Adwin is an indirect wholly owned subsidiary of PECO.
Under the settlement agreement PECO's subsidiary, Adwin,
surrendered its rights to its one-third partnership interest in the
Partnership to the two remaining partners, Trigen-Schuylkill and
Cogen America.  As a result, we own one half of the Partnership and
Cogen America owns the other half.  During the quarter ended June
30, 1999, we recognized an after tax gain of $8.5 million  ($.71
per diluted share) which represents the market value of our share
of Adwin's interest.

     Separately, The Chase Manhattan Bank and Westinghouse Power
Generation, which financed the construction of the Gray's Ferry
Cogeneration facility, agreed to dismiss their lawsuits against
PECO.  The Chase Manhattan Bank also agreed that they will not
charge the Partnership for any default interest up to April 16,
1999.  During the quarter, the Partnership therefore reversed
previously accrued default interest of $2.9 million including $1.8
million that was recorded in 1998.  Our share of the interest
reversal was $1.4 million.

<PAGE>

            TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Unaudited)


     In the year 2001, the energy price under the Power Purchase
Agreements will begin to be based upon a percentage of a market
based index, which we expect to produce substantially lower
revenues from sales to PECO than the more favorable rates of the
early contract years.  Under the settlement agreement, the
Partnership gained the right to sell to third parties electric
energy and capacity from the facility in excess of the 150
megawatts which PECO is required to purchase under the Power
Purchase Agreements, subject to a right of first refusal for PECO.
We expect that the ability to sell to third parties electric
energy and capacity above the 150 megawatts under contract to
PECO, will result in an opportunity to improve the financial
performance of the Partnership.  The Partnership will now have the
ability to institute capital modifications to the combustion
turbine to increase electric capacity during the summer months
when the price of electric capacity and energy are historically
the highest.

7.   Comprehensive Income

  Effective January 1, 1998, we adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income".
This statement requires disclosure of all items recognized under
accounting standards as components of comprehensive income.
Following are the components of comprehensive income for the three
months and six months ended June 30, 1999 and 1998 (in thousands).

                              Three  Months Ended  Six  Months Ended
                                    June 30            June 30
                               -----------------   -----------------

                                 1999     1998     1999      1998
                                 ----     -----     ----     -----
  Net earnings                   $9,350    (13)    $10,576   $5,136
  Other comprehensive income
  Cumulative foreign currency
  translation adjustment            367     22         433       19
                                 ------    ----    -------   ------
    Comprehensive  income        $9,717    $ 9     $11,009   $5,155
                                 ======    =====   =======   ======

<PAGE>

Item  2.  Management's  Discussion and  Analysis  of  Financial
Condition and Results of Operations

Results of Operations

Three  Months ended June 30, 1999 compared with Three Months ended
June 30, 1998.

Overview

     For the quarter ended June 30, 1999, we reported earnings of
$9.4 million or $.78 per diluted share.  This compared with a $13
thousand loss in the second quarter of 1998.  Revenues were $60.9
million in the second quarter compared with $50.8 million last
year.  Second quarter operating income of $7.6 million increased
$5.3 million over the $2.3 million in the like quarter last year.
This increase reflects higher sales volume in most of the district
energy systems, positive contributions from new industrial
accounts and the absence of 1998 special cost adjustments.  In
addition, equity earnings for unconsolidated subsidiaries
increased by $2.6 million versus the second quarter of 1998 due to
an increase in our ownership share of the Grays Ferry Cogeneration
Partnership from April 23rd forward and the reversal of accrued
default interest expense on the Partnership debt.  A significant
portion of our revenues and profits are subject to seasonal
fluctuation due to peak heating demand in the winter and peak
cooling demand in the summer.

Revenues

     Revenues of $60.9 million were up $10.1 million or 20% from
the second quarter of 1998, due to increased sales volume in most
of the district energy systems and positive contributions from our
new industrial accounts which became operational in 1999.  Thermal
energy sales were up $5.2 million to $42.3 million while electric
energy sales increased by $2.0 million to $10.8 million.  Equity
earnings from unconsolidated subsidiaries were up $2.6 million
from the second quarter of 1998, primarily due to an increase in
our ownership share of the Grays Ferry Cogeneration Partnership to
50% from 33 and 1/3% and from our $1.4 million share of the
reversal of accrued default interest on the Partnership debt
through April 16, 1999.

Operating Expenses

     Fuel and consumables costs were $23.3 million in the second
quarter of 1999 compared with $20.3 million in 1998.  This
increase was due to the higher level of energy revenues and the
addition of fuel and consumables costs associated with new
industrial accounts.

     Production and operating costs increased $2.1 million to
$13.8 million in the second quarter due to the increase in
revenues and the inclusion of production and operating costs
associated with new industrial accounts.

     General and administrative expenses were down $.8 million
from the second quarter 1998 primarily due to the absence of 1998
special cost adjustments of $2.0 million for insurance and
employee related costs.

Other Income, Net

     The $10.7 million increase in other income, net is primarily
the result of recognizing the gain from our share of the Adwin
interest in the Grays Ferry Cogeneration Partnership which was
surrendered to us on April 23, 1999 as part of a legal settlement
agreement (see Note 6-Legal Proceedings).  We recorded a pre-tax
gain of $14.5 million which represents the market value of the
share of Adwin's interest in the Partnership that was surrendered
to us.  Second quarter 1998 included the net results from gains of
$2.1 million from the sale of nitrogen oxide emission allowances
and $1.7 million from an insurance settlement.

Income Taxes

     Our effective tax rate is determined primarily by the federal
statutory rate of 35%, and state and local income taxes.  The
effective income tax rate for the second quarter of 1999 and 1998
was 41.4% and 43.0%, respectively.

Six months ended June 30, 1999 compared with six months ended June
30, 1998

Overview

     For the six months ended June 30, 1999, we reported earnings
before a  cumulative effect of a change in accounting principle of
$15.5 million or $1.29 per diluted share.  This compared to $5.4
million and $.45 of diluted earnings per share before
extraordinary item last year.  Net earnings for the six months
ended June 30, 1999, amounted to $10.6 million or $.88 per diluted
share after the effect of the adoption of the change in accounting
principle.  Operating income was $24.5 million on revenues of
$146.3 million in the first six months of 1999 compared with
operating income of $18.1 million on revenues of $125.7 million in
1998.  The operating margin was 16.8% in 1999 compared with 14.4%
in 1998.

Revenues

     Revenues of $146.3 million were up $20.6 million or 16.4%
over 1998.  Thermal energy sales increased $15.7 million to $113.0
million and electric energy sales increased $1.4 million to $21.6
million.  The increase in thermal energy sales is due to increased
sales volume reflecting a colder winter than 1998 and from
positive contributions from our new industrial accounts which
became operational in 1999.  Equity earnings from unconsolidated
subsidiaries increased 99% to $4.0 million.  This is primarily due
to the increase in our ownership share of the Grays Ferry
Cogeneration Partnership to 50% from 33 and 1/3% and from our $1.4
million share of the reversal of accrued default interest on the
Partnership debt through April 16, 1999.  Fees earned and other
revenues increased $1.5 million to $7.7 million primarily due to
increased equipment sales and to new industrial accounts.

Operating Expenses

     Fuel and consumables costs were $61.6 million compared with
$52.7 million last year.  This is due to the higher level of
energy revenues and the addition of fuel and consumables costs
associated with new industrial accounts.

     Production and operating costs increased 13.5% to $27.3
million due to the increase in revenues and operating costs
associated with new industrial accounts.

     Depreciation and amortization expense was $12.4 million
versus $11.6 million in 1998.  The increase reflects the higher
level of capital expenditures.

     General and administrative expenses increased $1.1 million
compared to 1998.  Expenses in 1998 included special cost
adjustments of $2.0 million for insurance and employee related
costs.  Increased costs in 1999 are primarily due to legal
expenses incurred in pursuing the Oklahoma City antitrust lawsuit
against OG&E, and from overhead related to new industrial
accounts.

Interest Expense, Net

     Interest expense increased $.8 million to $12.4 million due
to higher debt levels.

Other Income, Net

     Other income, net is up $10.7 million compared to 1998.  This
is primarily due to recognizing the gain from our share of the
Adwin interest in the Grays Ferry Cogeneration Partnership which
was surrendered to us on April 23, 1999 as part of a legal
settlement agreement (see Note 6-Legal Proceedings).  We recorded
a pre-tax gain of $14.5 million which represents the market value
of the share of Adwin's interest in the Partnership that was
surrendered to us.  1998 other income, net included the net
results from gains of $2.1 million from the sale of nitrogen oxide
emission allowances and $1.7 million from an insurance settlement.

Income Taxes

     Our effective tax rate is determined primarily by the federal
statutory rate of 35%, and state and local income taxes.  The
effective tax rate for 1999 and 1998 was 41.4% and 43.0%,
respectively.

Cumulative effect of a Change in an Accounting Principle

     We incurred an after-tax charge of $4.9 million, net of a tax
benefit of $3.5 million, related to the adoption of SOP 98-5
"Reporting on the Costs of Start-Up Activities" which was recorded
as a cumulative effect of a change in an accounting principle.
Reference is made to Note 4 of the Notes to Consolidated Financial
Statements with respect to the cumulative effect of a change in an
accounting principle.

Liquidity and Financial Position

     Cash and cash equivalents were $18.7 million at June 30, 1999
(which included $4.6 million of restricted cash and cash
equivalents), an increase of $4.0 million from year end 1998.
Working capital was $.9 million compared with a negative $9.5
million at December 31, 1998.  At June 30, 1999, receivables and
inventories increased slightly to $41.4 million and $7.3 million,
respectively from the balances at the end of 1998.  Accounts
payable were up $1.3 million to $6.1 million, accrued fuels
decreased by $5.5 million to $8.6 million and accrued expenses and
other current liabilities were up $10.0 million to $29.7 million
at June 30, 1999.  Our working capital requirements vary in line
with the peak heating demand in the winter and peak cooling demand
in the summer.

     During the first six months of 1999, we generated
$26.5 million of cash from operating activities compared with
$25.5 million in the like period last year.  The increase in cash
generated from operations in 1999 was due primarily to increased
earnings and improved working capital.  During the first six
months of 1999, we invested $40.2 million in capital expenditures,
$.6 million in the acquisition of energy facilities and non-
consolidated partnership investments and paid dividends of $.9
million to shareholders.

     Total debt was $395.0 million at June 30, 1999 compared with
$375.1 million at the end of 1998.  The $19.9 million increase,
along with cash generated from operations, was predominately used
to fund capital expenditures.

     During the first six months of 1999, stockholders' equity
increased $11.4 million to $159.3 million at June 30, 1999.  This
increase reflects $10.6 million of net earnings, $.3 million of
amortization of unearned compensation related to restricted
shares, a $.4 million cumulative translation adjustment and a
profit sharing contribution of $.9 million, partially offset by
$.9 million of dividend payments to shareholders.

     Reference is made to Note 6 of the Notes to Consolidated
Financial Statements with respect to legal proceedings involving
the Company.

Year 2000 Date Conversion

    An issue affecting us and other businesses is the inability
of many computer systems and applications to process the year 2000
("Y2K") and beyond.  To address this problem, we have developed a
plan that divides direction for Y2K preparedness into four
responsibility areas.  These areas are Plant Production, Plant Non-
Production, Desktop Systems and Corporate Systems.

  Plant Production includes primary plant systems that produce
steam, chilling and hot water, electricity and other forms of
energy.  A plan to upgrade all non-compliant software and hardware
has been underway since 1996.  We have completed testing of our
material Plant Production systems for Y2K compatibility.  At this
time, we believe that all of our material Plant Production systems
are Y2K compatible.

  Plant Non-Production includes Y2K issues related to
telecommunications hardware, climate control systems, security
systems, elevators, parking controls, and related systems.
Generally, these systems achieve 100% compliance with minor
hardware upgrades or chip replacements from original parts
manufacturers.  At this time, we believe that all of our material
Plant Non-Production systems are Y2K compliant.

  We anticipate all Desktop systems to be compliant by September
1999 and Corporate Systems, which include financial and billing
systems, to be compliant by December 1999.  At this time, we
believe our accounting system is Y2K compliant.  We are in the
process of upgrading our billing and other systems to achieve
compliance.  If we are not successful in these efforts, we believe
that it would not impact our ability to serve our customers,
although we may experience administrative difficulties.

  We estimate the total external cost to achieve Y2K compliance
to be $1 million for the years 1997 through 1999.  We believe we
are staffed sufficiently to address all Y2K issues.

  We purchase raw material from key vendors to produce energy.
These vendors include major natural gas, electricity, and water
utilities, fuel oil and chemical distributors and coal producers.
We will continue to survey our key vendors to determine their Y2K
compliance.  At this time, we do not expect any material
disruption in services from vendors due to Y2K issues.  We are,
however, dependent in part, upon the ability of our vendors to be
Y2K compliant.

  Our Y2K efforts are ongoing and our overall plan, as well as
consideration of contingency plans, will continue to evolve as new
information becomes available.  At this time, we do not expect any
major interruption of our business activities due to Y2K issues.
However, we are unable to estimate the ultimate effect Y2K risks
will have on our operating results.

Item 3.  Quantitative and Qualitative Disclosures About Market
Risk

  We do not engage in the trading of market risk sensitive
instruments in the normal course of business.  Our short and long-
term debt is subject to fixed and variable interest rates
including rates based primarily on LIBOR. Based upon the debt
balances at June 30, 1999, a change in the LIBOR rate of .25%
would have a corresponding change in interest expense of
approximately $602,000 per year when three-month LIBOR is over
7.5% ranging to approximately $730,000 per year when three-month
LIBOR is under 6.0%. Three-month LIBOR at June 30, 1999 was 5.37%.

     We use financial instruments to limit the financial risk of
increases in interest rates on our floating rate debt. The
differential to be paid or received under financial instruments is
accrued and recognized in interest expense as interest rates
change.  As of June 30, 1999, we had outstanding interest rate
swap, cap and collar agreements related to $41.6 million of debt
outstanding, with an average fixed interest rate of 5.8% and an
average remaining life of 5.7 years.  If Trigen had liquidated the
swap, cap and collar the amount received would have approximated
$290,000.  We do not expect these financial instruments to have a
material effect on our earnings or cash flows.

Part II - Other Information

Item 1. Legal Proceedings.

     We report information regarding our legal proceedings under
Note 6 to the Consolidated Financial Statements in this Report and
in our Annual Report on Form 10-K for the year ended December 31,
1998 as well as in other reports we have filed with the SEC
earlier this year.

Item 3. Defaults Upon Senior Securities.

     As part of the settlement of the lawsuit between Grays Ferry
Cogeneration Partnership (the "Partnership") and PECO Energy
Company, The Chase Manhattan Bank and certain other commercial
banks (collectively the "Banks") and Westinghouse Power Generation
agreed to waive claims for default interest against the
Partnership up to April 16, 1999.  The Banks and Westinghouse
financed the construction of the Grays Ferry Cogeneration Facility
under separate loan agreements.  The Partnership owes a total
principal amount of approximately $84,400,000 to the Banks.  The
Partnership owes a total principal amount of approximately
$15,000,000 to Westinghouse.

     As of the date of this Report, the Partnership is in default
under its debt agreements with the Banks and Westinghouse for the
following reasons.  The Partnership did not convert on time the
Bank's short term construction loan for the Grays Ferry
Cogeneration Facility to a longer term loan.  The Partnership
could not complete that conversion because of a dispute with the
construction contractor which has now been resolved.  The
Partnership also did not make a principal payment to Westinghouse
because the Banks required the Partnership to apply the
Partnership's available cash (net of operating expenses) to
repayment of principal owed to the Banks.

     Westinghouse and the Banks have not accelerated the debt owed
to them nor charged default interest against the Partnership,
although the Banks have reserved their rights to do so.

     We expect to resolve all outstanding default issues with the
Banks and Westinghouse in the third quarter of 1999.

Item 4.  Submission of Matters to a Vote of Security Holders.

     The annual meeting of security holders was held in
Philadelphia, Pennsylvania on May 19, 1999.  The security holders
voted, as recommended by management, for the election to the Board
of Directors of Messrs. Patrick Buffet, George F. Keane, Thomas R.
Casten, Philippe Brongniart, Olivier Degos, (11,374,118 votes for,
233,809 votes withheld for Messrs. Buffet, Keane, Casten and
Degos; 11,372,998 votes for and 234,929 votes withheld for Mr.
Brongniart), and ratified the selection of Arthur Andersen LLP as
the Company's independent certified public accountants for the
fiscal year ending December 31, 1999 (11,600,175 votes for and
2,224 votes against, 5,527 abstained).  The following director's
terms of office continued after the meeting:  Messrs. Richard E.
Kessel, Charles E. Bayless, Michel Bleitrach, and Dominique Mangin
d'Ouince.


Item 6.   Exhibits and Reports on Form 8-K

     (a)  The following exhibits are filed as part of this amendment:
         10.35     Form of Confidentiality, Non-Compete and Severance
              Agreement, dated July 28, 1998 between Trigen and Martin S. Stone.
         27   Financial Data Schedule

      (b)  The following reports on Form 8-K were filed during the
quarter ended June 30, 1999
     Item 2. Acquisition or Disposition of Assets, April 27, 1999.
     Form 8-K/A-1. (Amendment of April 27, 1999 Form 8-K)  Item 2.
             Acquisition or disposition of Assets, June 9, 1999.

      Form 8-K/A-2.  Item 2. Acquisition or Disposition of Assets,
and
     Item 7. Financial Statements and Exhibits, July 2, 1999


<PAGE>
                            SIGNATURES

     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 thereunto duly authorized.



                                        TRIGEN ENERGY CORPORATION



                                   /s/  MARTIN S. STONE
                                   ------------------------------
                                        Martin S. Stone
                                        Vice President Finance &
                                        Chief Financial Officer


                                   /s/  DANIEL J. SAMELA
                                   ------------------------------
                                        Daniel J. Samela
                                        Controller



Date:     August 13, 1999




<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from SEC Form
10-Q for quarter ending June 30, 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>

<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1999
<PERIOD-END>                               JUN-30-1999
<CASH>                                        $ 18,706
<SECURITIES>                                         0
<RECEIVABLES>                                   42,525
<ALLOWANCES>                                     1,141
<INVENTORY>                                      7,299
<CURRENT-ASSETS>                                69,206
<PP&E>                                         578,862
<DEPRECIATION>                                 105,990
<TOTAL-ASSETS>                                 662,647
<CURRENT-LIABILITIES>                           68,268
<BONDS>                                        378,153
                                0
                                          0
<COMMON>                                           124
<OTHER-SE>                                     159,191
<TOTAL-LIABILITY-AND-EQUITY>                   662,647
<SALES>                                        146,315
<TOTAL-REVENUES>                               146,315
<CGS>                                          101,337
<TOTAL-COSTS>                                  121,802
<OTHER-EXPENSES>                             ( 14,307)
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              12,406
<INCOME-PRETAX>                                 26,414
<INCOME-TAX>                                    10,935
<INCOME-CONTINUING>                             15,479
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                    (  4,903)
<NET-INCOME>                                    10,576
<EPS-BASIC>                                        .88
<EPS-DILUTED>                                      .88


</TABLE>

                                           EXHIBIT 10.35

                CONFIDENTIALITY, NON-COMPETE AND
                       SEVERANCE AGREEMENT

     THIS AGREEMENT is made on May 21, 1999 between Martin S.
Stone (the "Key Employee") and Trigen Energy Corporation (the "Company").

     WHEREAS, the Company has retained the Key Employee to serve
as its Vice President Finance and Chief Financial Officer, upon mutually agreed
terms; and

     WHEREAS, the Company and the Key Employee agree that
certain benefits should accrue to the Key Employee and
reasonable restrictions be imposed on the Key Employee in
connection with Key Employee's employment by the Company.

     WHEREAS,  in consideration of the severance provisions  and
other covenants agreed to by the Company in this Agreement,  the
Key  Employee  is willing to surrender his rights  to  severance
payments on termination of his employment described on page 2 of
the letter dated July 27, 1998, a true and correct copy of which
is  attached  hereto as Exhibit A, under the heading  "Severance
Provision" and to comply with the provisions of this Agreement.

     NOW THEREFORE, in consideration of the mutual promises of
the parties herein, the Key Employee and the Company agree to
the following provisions in connection with the employment of
the Key Employee by the Company:

     1.    Severance Benefts.  Except as provided in  Section  2
and  3  below,  the  Key  Employee  will  be  eligible  for  the
applicable severance benefits set forth in this Agreement if the
Key  Employee is permanently terminated by the Company  for  any
reason  other than for cause.  If the Key Employee is terminated
for  cause, the Key Employee agrees that he will be entitled  to
payment  of  his  accrued  and unused vacation  only.   For  the
purposes   of  this  Agreement  "for  cause"  shall   mean   any
termination of employment based upon:

(a)  any material breach of Sections 7 or 8 of this Agreement;
     or

(b)  any conviction of any felony or misdemeanor involving moral
     turpitude or conviction of any other crime which the  Board
     of Directors reasonably deems to involve fraud; or

(c)  any act or omission which the Board of Directors reasonably
     deems to constitute gross negligence or misconduct inimical
     to  the best interests of the Company in the performance of
     the Key Employee's obligations, duties and responsibilities
     as an officer and employee of the Company.

Discharge for cause will be effective immediately upon the Key
Employee's receipt of
                           1

written notice of termination of employment or such later date
as may be specified in that notice; provided that, the notice
shall contain the specific reasons and the specific event or
events upon which the discharge is predicated.

     2.   In the event of the death of the Key Employee during
the term of his employment by the Company, such employment shall
be deemed to terminate on the date of the Key Employee's death
and no severance benefits set forth in this Agreement shall
accrue and be owing by the Company to the estate or heirs or
representatives of said Key Employee, other than payment for
accrued but unused vacation time.

     3.    Upon a voluntary termination of employment by the Key
Employee,  no severance benefits as set forth in this  Agreement
shall be due to the Key Employee, other than payment for accrued
but  unused  vacation time.  The employment of the Key  Employee
shall   be  deemed  to  terminate  upon  the  written  or   oral
resignation by the Key Employee.

     4.   Except for a termination "for cause", or pursuant to
Sections 2 or 3, above, the Company shall give the Key Employee
not less than ninety (90) days written notice of any
termination of his employment by the Company.  Thereafter, in
the case of any termination of his employment, other than a
termination by the Company "for cause" or pursuant to Sections 2
or 3, in addition, the Company shall pay to the Key Employee a
lump surn severance benefit equal to twelve (12) months of his
then current annual base salary and any full and/or prorated
bonus payments due and owed to the Key Employee.  If prior to
the termination of the Key Employee, the Compensation Committee
of the Board of Directors of the Company provides for a
"retirement" program for its employees then the Key Employee
will be bound by that program and will be offered the same
benefits defined by that program for other similarly situated
Vice Presidents subject to the eligibility criteria of the
program.

     In  the  event that Key Employee's employment is terminated
within  a one (1) year period immediately following a Change  in
Control  (as  defined  below), for any reason  other  than  "for
cause",  death or pursuant to a voluntary termination,  then  in
addition  to  the foregoing ninety day notice and  twelve  month
payment  the Company shall pay to the Key Employee an additional
year  of the Key Employee's then current annual base salary,  or
such   greater  severance  benefit  as  may  be  then  generally
applicable to Corporate Vice Presidents.

     For  the  purposes of this Agreement, a "Change in Control"
shall  be  deemed  to  have taken place if  after  the  date  of
execution of this Agreement (i) any person, including a  "group"
as  described in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended, (other than Suez Lyonnaise Des Eaux and its
affiliates)  becomes  the  owner  or  beneficial  owner  of  the
Company's  common  stock, having 40% or  more  of  the  combined
voting power of the then outstanding common stock of the Company
that  may  be cast for the election of directors of the  Company
(other  than as a result of an issuance of securities  initiated
by  the Company), or (ii) the persons who were directors of  the
Company before the date of execution of this Agreement

                         2

shall  cease to constitute a majority of the Board of  Directors
of  the  Company, or any successor to the Company, as the direct
or indirect result of, or in connection with, any cash tender or
exchange  offer, merger or other business combination,  sale  of
assets  or  contested  election,  or  any  combination  of   the
foregoing transactions.

  5. Notwithstanding any of the foregoing, the Key Employee will
be required to sign a release agreement, in the form and
substance as usual and customary for other Company employees,
waiving all claims against the Company in order to receive any
of the post termination benefits or other payments described in
this Agreement.  The Key Employee agrees that if he refuses to
sign such a payments owed release, the Company may reduce in
whole or in part the post termination benefits and/or other
payments owed to the Key Employee.

          6.   Except for a termination "for cause", or pursuant
to Sections 2 or 3, above, the following employee benefits, or such
greater employee benefits as may be then generally offered to Corporate
Vice Presidents following termination, will be provided during the twelve
(12) month period immediately following the date of termination:

(a)  Individual executive level outplacement service, internally
     or externally as required; and

(b)  The  Company  will,  at  its option,  either  pay  the  Key
     Employee's  health  care  continuation  coverage  ("COBRA")
     premiums, or require the Key Employee to pay such  premiums
     but  pay  to  the  Key  Employee an  additional  amount  or
     severance  pay equal to said premiums, if the Key  Employee
     elects such coverage.

     7.     Non-Competition.   During  the  period  of  the  Key
Employee's employment by the Company and for one year after  any
termination  thereof  (the "Non-Competition  Period"),  the  Key
Employee  will  not  without  prior written  permission  engage,
directly  or  indirectly,  including  without  limitation  as  a
director, officer, employee, member, advisor, agent, or  in  any
other  capacity,  or become an owner in whole or  part,  of  any
person,  partnership,  corporation or other  entity  engaged  in
district  heating or cooling, cogeneration relating to  district
heating and cooling, providing building management services with
respect  to heating, ventilating or air conditioning,  or  other
principal  business  activities of the Company  or  any  of  its
subsidiaries in territories in which, at the time of termination
of   the   Key  Employee's  employment,  the  Company   or   its
subsidiaries   have   or   are   developing   operations    (the
"Territories").  Ownership by the Key Employee of less  than  5%
of  the  outstanding securities or voting interest of  any  such
competing  corporation shall not constitute  a  breach  of  this
Agreement.

            8. Secret or Confidential Information.  At no time
will the Key Employee disclose to anyone, other than the Company or
persons designated by the Company, or use for the Key
Employee's own benefit, any trade secrets or other confidential
information, or any inventions, discoveries, improvements, tools,
machines, compounds, formulae, methods  or  products,  whether or
not patented  or  patentable, which  are directly or indirectly
useful in or relating  to  any aspect  of  the business of the Company
or any of its affiliates as conducted from time to

                         3
time,  as to which the Key Employee at any time during the  term
of  his  employment shall become informed, which  shall  not  be
generally  known  to  the  public  or  recognized  as   standard
practice.   This  Section  shall not be violated  by  disclosure
required,  in  the reasonable judgment of the  Key  Employee  by
governmental  authorities,  provided  that  (i)  to  the  extent
permitted  by law, notice of the requirement for such disclosure
is  given  to  the  Board  of  Directors  prior  to  making  any
disclosure,  and  (ii)  the Key Employee  requests  confidential
treatment  in  connection  with such disclosure.   This  Section
shall  not be violated by any disclosure of such information  by
the Key Employee required in the proper course of his duties  as
Chief   Financial  Officer  in  good  faith,  including  without
limitation   during  discussions  with  analysts,  stockholders,
investors   and   underwriters  conducted  in  accordance   with
applicable laws and regulations.

     9.     Injunctive  Relief,  Survival.  The  parties  hereto
acknowledge  that the covenants contained herein are  reasonable
and  necessary for the protection and commercial success of  the
Company,  and  that the Company will be damaged  irrevocably  if
such covenants are not specifically enforced.  Accordingly,  the
parties agree that the Company shall be entitled, in addition to
any other rights and remedies available at law or in equity,  to
injunctive  relief  for  the  purpose  of  restraining  the  Key
Employee from directly or indirectly doing or continuing  to  do
any  acts  in violation of the covenants contained herein.   The
parties hereto agree that any judicial authority construing this
Agreement  shall  be  empowered to  sever  any  portion  of  the
Territories, any prohibited activity, or any portion of the Non-
Competition  Period from the coverage of this Agreement  and  to
apply  the provisions of this Agreement to the remaining portion
of  the  Territories, prohibited activities and  Non-Competition
Period not so severed by such judicial authority.

     10.   Notices.   All  communications under  this  Agreement
shall  be  in  writing and shall be deemed given  when  sent  by
overnight  delivery  service  or  delivered  by  mail  and,   if
delivered  by  mail, shall be mailed by registered or  certified
first class mail, postage prepaid, and addressed as follows  (or
to  such  other  address as may be specified in writing  by  one
party to the other):

     if to the Key Employee:

               Martin S. Stone
               11 Holmes Avenue
               Hartsdale, NY 10530

     if to the Company:

               Trigen Energy Corporation
               1 Water Street
               White Plains, New York 10601
               Attention:     Richard E. Kessel
                              Executive Vice President & Chief
                              Operating Officer
               Facsimile No.: (914) 286-6600

                              4

     11.    Governing Law.  This Agreement shall be governed by,
and  construed in accordance with, the laws of the State of  New
York applicable to contracts executed in and to be performed  in
that State, regardless of laws that might otherwise govern under
applicable principles of conflicts of laws thereof

     12.  Letter Agreement Dated July 27, 1998.  The Company and the
          Key Employee
Agree to amend the terms of the letter dated July 27, 1998 to
delete the second sentence of the first paragraph on page 1 of
the letter and to delete the paragraph under the heading
"Severance Provision" which begins at the bottom of page 2 and continues on
to  page  3 of the letter dated July 27, 1998.  Without limiting
the  obligations agreed to by the Company and the  Key  Employee
under  this  Agreement, the Key Employee and the  Company  agree
that effective upon the execution of this Agreement, the Company
will  employ the Key Employee for a term which may be terminated
at  any  time at will by either the Company or the Key Employee.
All  of the other terms of the letter dated July 27, 1998  shall
remain  in  full force and effect, including the first  and  the
third  sentences of the first paragraph on page 1 of the  letter
and  the benefits described in the paragraphs set forth on pages
1  and  2  of the letter beginning with the paragraph under  the
heading  "Annual Incentive Management (AIM) Program" and  ending
with the paragraph under the heading "Vacation."

     IN WITNESS WHEREOF, the Key Employee has executed this
Agreement and the
Company has caused this Agreement to be executed by its duly
authorized officer as of the day and year first above written.

                              TRIGEN ENERGY CORPORATION



                                   /s/  Richard E. Kessel
                              By: ------------------------------
                                   Richard E. Kessel
                                   Executive Vice President &
                                   Chief Operating Officer



                                         /s/  Martin S. Stone
                              ----------------------------------
                                          Martin S. Stone

                              5

                                        EXHIBIT A

Trigen Energy Corporation
One Water Street,
White Plains, New York 10601
(914) 286-6600
Fax (914) 948-9157/9190


July 27, 1998


Mr. Martin Stone
11 Holmes Avenue
Hartsdale, NY 10530

Dear Martin:

I am pleased to confirm our employment offer to you for the
position of Vice President and Chief Financial Officer for
Trigen Energy Corporation at an annualized salary of $200,000.
Your first day of employment will be Tuesday, July 28th, and the
terms of your employment under this agreement shall be for
twelve months commencing on July 28, 1998.  In addition to your
base salary, you will be eligible to participate in the Trigen
Executive Compensation Program.

The Trigen Executive Compensation Program includes the
following:

  - Annual Incentive Management (AIM) Program - You will be
  eligible for a target incentive of 30% of your annualized
  salary (prorated for 1998).  The actual awards granted under
  this plan are a function of the company's financial results
  and the attainment of individual objectives, and are
  distributed after year-end.

   - Long-term Equity Accumulation Program (LEAP) - Under LEAP
   you will be given a grant of 5,500 Incentive Stock Options
   (ISOs) and 9,750 Restricted Shares of Trigen stock.  The ISO
   grant is effective on your first day of employment with an
   exercise price equaling the market's closing price on that
   day.  These options vest over pro rata over the first five
   years of the grant and your have ten years from the date of
   the grant to exercise them.

The Restricted Share grant will be effective on October 1, 1998.
The restrictions on the shares will lapse on the earlier of
Trigen attaining $2.08 earnings per share or December 31, 2005.
There is a stock ownership provision included in this plan.
Both the ISO grant and the Restricted Share grant require that
you be an employee on the date of exercise or lapse of
restrictions, unless otherwise noted in the plan agreements
documents.  A full description of LEAP explaining the features
of this program is attached.


                              6

  - Benefits-Effective on the 1st of the month following your
employment date, our benefit package includes medical, dental,
prescription drug, vision, life insurance (up to two times
salary($300,000 Maximum)), accidental death and dismemberment
insurance, and short and long term disability.  An Employee
Handbook detailing these benefits is enclosed.

  - Automobile Program - Commencing with your first day of
employment, you will receive a supplemental stipend of $13,200,
payable bi-weekly, to compensate you for a car and automobile
insurance coverage.

  - Omnibus Deferral Program - This plan, which has three
components, allows you to defer receipt of base salary and
incentive payments, defer receipt of Trigen stock following the
exercise of your stock options and restricted shares, and also
provides a deferred account for future receipt of ERISA excess
benefits.

  - Employee Stock Purchase Plan-You may contribute up to 10% of
your total compensation to be used to purchase Trigen stock at a
15% discount from the lower of the market's closing price at the
start or end of the plan's cycle.  The plan runs a six-month
period, and you will be eligible for the next cycle commencing
October 1st.

   -    401(k) Plan - The plan provides you to invest up to 15% of
your compensation, subject to ERISA limits, on a before-tax basis
through payroll deductions.  Trigen makes a matching contribution on
all your contributions based on a sliding scale formula of 100% of your
first $500 of contributions, 50% on your next $500, and 6% thereafter.

  - Profit Sharing Plan - As part of the 40l(k) Plan, the
company may make a profit sharing contribution to your account.
These contributions will be determined at each year-end at the
company's sole discretion.  The profit sharing contribution is
made in the form of Trigen stock.

  - Vacation - Corporate officers are eligible for four weeks of
vacation.

  - Severance Provision - If at any time during this term you
are terminated "without cause," you will receive all of the
compensation herein agreed to from the date of termination
through the balance of the above stated term.  In this context
"cause" shall mean: (i) unauthorized use or disclosure to third
parties of confidential information of the company, including
financial information, marketing information, personnel
information, customer information, project development
information or information obtained from third parties
concerning which the company is bound by a written
confidentiality agreement (disclosure legally required to be
made to government authorities, disclosures of matters already
known to the general public, disclosure of information already
in your possession on a non-confidential basis are excluded from
this obligation.); (ii) conviction of any crime which the Board
of Directors reasonably deems to involve fraud or other
misdemeanor or felony involving moral turpitude, or (iii) any
act or omission which the Board of Directors reasonably deems to
constitute gross negligence or misconduct inimical to the best
interests of the company in the performance of your obligations,
duties and responsibilities hereunder.

                                   7

Both Rich and I are confident you will contribute quickly to
Trigen's culture and values of collegial and open communications
while encouraging creative ideas, commitment and passion for our
work.  I look forward to working with you in meeting our
challenge in successfully attaining Trigen's mission.

This offer is contingent upon the approval of Trigen's
Compensation Committee concerning the provisions of this offer
and the Board's approval for becoming a corporate officer.

I trust this meets with your approval and please acknowledge
your acceptance of this offer by signing where indicated below
and returning a copy to me at your earliest convenience.  The
second copy is for your records.



Sincerely,

/s/  Thomas R. Casten

Thomas R. Casten
President and Chief Executive Officer

TRC
Attachments



                              Accepted By:  /s/  Martin S. Stone
7-27-98                                 ------------------------
                                            Martin Stone
Date





                              8



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