SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1997
Commission File Number 33-95928
LS POWER FUNDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 81-0502366
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
402 East Main Street, Bozeman, MT 59715, (406) 587-7397
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
LSP-COTTAGE GROVE, L.P.
LSP-WHITEWATER LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 81-0493289
Delaware 81-0493287
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Numbers)
402 East Main Street, Bozeman, MT 59715, (406) 587-6325
402 East Main Street, Bozeman, MT 59715, (406) 587-6122
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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, and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
LS POWER FUNDING CORPORATION
LSP-COTTAGE GROVE, L.P.
LSP-WHITEWATER LIMITED PARTNERSHIP
Form 10-Q Index
PART I
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 3
PART II
Item 1. Legal Proceedings 7
Item 2. Changes in Securities 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 8
Financial Statement Index F-1
Exhibits Index EI-1
PART I/ITEM 1. FINANCIAL STATEMENTS
See financial statements commencing at F-1. These unaudited financial
statements have been prepared pursuant to the rules and regulations of
the Securities and Exchange Commission (the "Commission"). Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. While LS Power Funding
Corporation ("Funding") LSP-Cottage Grove, L.P. ("Cottage Grove") and
LSP-Whitewater Limited Partnership ("Whitewater" and, together with
Cottage Grove, the "Partnerships") believe that the disclosures made are
adequate to make the information presented not misleading, these
financial statements should be read in conjunction with the audited
financial statements included in the Annual Report on Form 10-K for the
year ended December 31, 1996, filed by Funding, Cottage Grove and
Whitewater.
PART I/ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
Cottage Grove is a single purpose Delaware limited partnership
established on December 14, 1993 to develop, finance, construct, own,
operate and manage a gas-fired cogeneration facility located in Cottage
Grove, Minnesota (the "Cottage Grove Power Plant"). Whitewater is a
single purpose Delaware limited partnership established on December 14,
1993 to develop, finance, construct, own, operate and manage a gas-fired
cogeneration facility located in Whitewater, Wisconsin (the "Whitewater
Power Plant", and collectively with the Cottage Grove Power Plant, the
"Power Plants" or "Projects"). Since their formation in 1993, the
Partnerships have been developing and constructing their respective
power plants. The Whitewater Power Plant and Cottage Grove Power Plant
commenced commercial operation on September 18, 1997 and October 1,
1997, respectively.
COTTAGE GROVE
Power Plant Construction
The Cottage Grove Power Plant is being constructed by Westinghouse
Electric Corporation ("Westinghouse Electric" or the "Contractor")
pursuant to a turnkey construction contract (the "Cottage Grove
Construction Contract"). Westinghouse Electric had agreed to complete
the construction and start-up of the Cottage Grove Power Plant to
specified performance levels by May 31, 1997. Westinghouse began
construction of the Cottage Grove Power Plant on June 30, 1995.
At September 30, 1997 engineering, procurement, and construction
were substantially complete. Effective October 1, 1997, the Cottage
Grove Power Plant commenced commercial operation. The Contractor had
experienced a number of equipment difficulties, which had delayed the
completion of construction and start-up. These difficulties included (i)
inability to meet performance and emission requirements when running the
Power Plant on fuel oil and (ii) increased utilization of catalyst to
control emissions. These difficulties had caused a more lengthy start-up
period than originally anticipated.
As a result of the Contractor's failure to complete construction
and start-up of the Cottage Grove Power Plant by May 31, 1997, the
Contractor was required, until completion of construction, to reimburse
Cottage Grove for extension fees paid under its PPA, and to pay certain
liquidated damages. The milestone extension period ended on October 1,
1997 with commencement of commercial operation. Cottage Grove has
recorded receivables from the Contractor of $3,011,667 at September 30,
1997, which is comprised of reimbursable extension fees of $266,667 and
delay liquidated damages of $2,745,000. Subsequent to September 30,
1997, these receivables have been satisfied. In addition, Cottage Grove
had received from Westinghouse cash of $1,066,668 and $2,327,729 of
reimbursable extension fees and delay liquidated damages, respectively,
and had retained construction contract payments (in the form of cash and
an irrevocable letter of credit) totaling $10,886,514.
In order to demonstrate that construction of the Power Plant was
complete, the Contractor was required to demonstrate, with the
concurrence of Cottage Grove and R.W. Beck, the independent engineer,
that: (i) the Power Plant was mechanically and electrically sound and
free from known defects or deficiencies that could affect the safety and
reliability of the Power Plant, (ii) the Power Plant met certain
performance and emissions guarantees, (iii) the Power Plant successfully
completed testing designed to demonstrate the Power Plant's reliability,
and (iv) the Power Plant successfully completed testing required by
Cottage Grove's power sales contract ("PPA") with Northern States Power
Company ("NSP").
Effective September 30, 1997, the Partnership and the Contractor,
with the concurrence of R.W. Beck, the independent engineer, agreed to a
Construction Contract change order. Under the change order, certain
nonmaterial modifications were made to the Contract and certain
guarantees were deferred until final completion, which allowed the
Contractor to achieve substantial completion and the Partnership to
commence commercial operation. In addition, the Contractor committed to
certain future modifications in the Power Plant's construction,
extension of certain warranty periods and certain financial concessions.
During the October 27, 1997 scheduled outage of the Power Plant,
the Contractor identified one cracked blade and a number of cracked
vanes in the combustion turbine unit. The damaged components were
replaced and the unit was placed on-line as scheduled on November 10,
1997. As a result of this apparent defect in the Power Plant and the
significant difficulties the Contractor encountered in achieving
commercial operation, the Partnership notified the Contractor that the
Power Plant may not meet the full requirements of the Construction
Contract. The Contractor has initially rejected this assertion. The
ultimate outcome of this dispute is unknown at the present time.
Liquidity and Capital Resources
For the three months ended September 30, 1997, Cottage Grove
capitalized construction costs totaling approximately $2,504,127. At
September 30, 1997, Cottage Grove's investments held by trustee totaled
$26,872,969, of which $6,043,000 was held in a fund reserved for debt
service, and $1,425,950 was held in a contingency fund to pay for
project cost overruns. Cottage Grove transferred $6,231,346 from the
contingency fund during the third quarter of 1997 to fund estimated
increases to budgeted construction costs.
WHITEWATER
Power Plant Construction
The Whitewater Power Plant is being constructed by Westinghouse
Electric Corporation ("Westinghouse Electric" or the "Contractor")
pursuant to a turnkey construction contract (the "Whitewater
Construction Contract"). Westinghouse Electric had agreed to complete
the construction and start-up of the Whitewater Power Plant to specified
performance levels by May 31, 1997. Westinghouse began construction of
the Whitewater Power Plant on June 30, 1995.
At September 30, 1997, engineering, procurement, and construction
were substantially complete. Effective September 18, 1997, the
Whitewater Power Plant commenced commercial operation. The Contractor
had experienced a number of equipment difficulties, which had delayed
the completion of construction and start-up. These difficulties included
(i) inability to meet performance and emission requirements when running
the Power Plant on fuel oil, (ii) increased utilization of catalyst to
control emissions and (iii) a leak in the high-pressure section of the
steam turbine. These difficulties had caused a more lengthy start-up
period than originally anticipated.
In order to demonstrate that construction of the Power Plant was
complete, the Contractor was required to demonstrate, with the
concurrence of Whitewater and R.W. Beck, the independent engineer, that:
(i) the Power Plant was mechanically and electrically sound and free
from known defects or deficiencies that could affect the safety and
reliability of the Power Plant, (ii) the Power Plant met certain
performance and emissions guarantees, (iii) the Power Plant successfully
completed testing designed to demonstrate the Power Plant's reliability,
and (iv) the Power Plant successfully completed testing required by
Whitewater's PPA with Wisconsin Electric Power Company ("WEPCO").
As a result of the Contractor's failure to complete construction and
start-up of the Whitewater Power Plant by May 31, 1997, the Contractor
was required, until completion of construction, to reimburse Whitewater
for extension fees paid under its PPA, and to pay certain liquidated
damages. The milestone extension period ended on September 18, 1997 with
commencement of commercial operation. Whitewater has recorded
receivables from the Contractor of $2,195,001, which is comprised of
reimbursable extension fees of $35,001, and delay liquidated damages of
$2,160,000 at September 30, 1997. Subsequent to September 30, 1997,
these receivables have been satisfied. In addition, Whitewater had
received from Westinghouse cash of $75,001 and $2,378,764 of
reimbursable extension fees and delay liquidated damages, respectively,
and had retained construction contract payments (in the form of cash and
an irrevocable letter of credit) totaling $11,173,742.
Effective September 18, 1997, the Partnership and the Contractor,
with the concurrence of R.W. Beck, the independent engineer, agreed to a
Construction Contract change order. Under the change order, certain
nonmaterial modifications were made to the Contract and certain
guarantees were deferred until final completion, which allowed the
Contractor to achieve substantial completion and the Partnership to
commence commercial operation. In addition, the Contractor committed to
certain future modifications in the Power Plant's construction,
extension of certain warranty periods and certain financial concessions.
As a result of the inspection of the Cottage Grove combustion
turbine unit, the Contractor conducted a boroscopic inspection of the
Whitewater combustion turbine unit. During the inspection, the
Contractor identified one cracked blade and a number of cracked vanes in
the combustion turbine unit. The damaged components were replaced and
the unit was placed on-line November 24, 1997. The inspection and repair
of the unit resulted in the November scheduled outage being extended
from two weeks to three weeks. As a result of this apparent defect in
the Power Plant and the significant difficulties the Contractor
encountered in achieving commercial operation, the Partnership notified
the Contractor that the Power Plant may not meet the full requirements
of the Construction Contract. The Contractor has initially rejected this
assertion. The ultimate outcome of this dispute is unknown at the
present time.
Results of Operations
Commercial operations commenced September 18, 1997. For the period
September 18, 1997 through September 30, 1997 the Partnership had
revenue of $1,361,505 primarily from the sale of electricity, cost of
sales of $861,417 and operating income of $500,088. Interest expense for
the same period was $507,984.
Liquidity and Capital Resources
For the three months ended September 30, 1997, Whitewater
capitalized construction costs totaling approximately $6,416,361. At
September 30, 1997, Whitewater's investments held by trustee totaled
$26,308,573, of which $6,900,000 was held in a fund reserved for debt
service, and $338,502 was held in a contingency fund to pay for project
cost overruns. Whitewater transferred $7,367,547 from the contingency
fund during the third quarter of 1997 to fund estimated increases to
budgeted construction costs.
Power Sales
In accordance with Whitewater's PPA, Whitewater was responsible
for reimbursing WEPCO for the actual increased costs of capacity and
energy acquired to replace the capacity and energy which were to be
provided by the Whitewater Power Plant. Whitewater's obligation to
reimburse WEPCO for these "Replacement Power" costs began on June 23,
1997 and continued through September 17, 1997. Whitewater had an
obligation for Replacement Power costs if WEPCO's actual costs of
capacity and energy exceeded the amounts, which would have been paid to
Whitewater under the PPA. For the period from June 23, 1997 through
September 30, 1997, WEPCO has provided invoices for Replacement Power
costs in the aggregate amount of approximately $3,200,000. This amount
has been reflected in Whitewater's balance sheet as of September 30,
1997, and in its statements of cash flows for the periods then ended.
Whitewater's obligation for Replacement Power costs is a project cost
and will be payable from the project's construction fund.
For the period September 18, 1997 through September 30, 1997,
Whitewater recorded approximately $1,360,000 of operating revenue under
the power sales contract with WEPCO.
The Partnership and WEPCO disagree on the methodology to be used to
determine Committed Capacity of the Power Plant, as defined. The
disagreement centers around three major criteria: (i) the use of
evaporative coolers, steam injection and duct burners, (ii) the
determination of the ambient condition adjustment and (iii) the
requirement to demonstrate Committed Capacity while operating on fuel
oil. Settlement discussions are ongoing; however, if a settlement cannot
be reached the use of Dispute Resolution procedures as defined in the
Power Purchase Agreement will be required. The ultimate outcome of this
disagreement is unknown at the present time.
Greenhouse
Whitewater has a construction contract with Dominion
Growers/Whitewater, L.C. ("Dominion") to design, engineer, interconnect,
construct and start-up a greenhouse (the "Greenhouse") adjacent to the
Whitewater site. Construction of the Greenhouse was substantially
completed on June 2, 1997. On June 6, 1997, an amendment to the
construction contract was executed to clarify Dominion's fee for
construction of the Greenhouse and to reflect other revisions to the
construction contract. Final completion of Greenhouse construction is
anticipated by January 31, 1998.
Whitewater had a lease agreement with Dominion (the "Dominion
Lease"). Under the Dominion Lease, Whitewater had agreed to lease to
Dominion the Greenhouse and an approximate 38-acre parcel of land upon
which the Greenhouse has been constructed. The Dominion Lease was to
commence upon substantial completion of construction of the Greenhouse
and expire on the later of (i) the 25th anniversary of the Whitewater
Commercial Operations Date, and (ii) May 31, 2022. In connection with
the Dominion Lease, Whitewater also had a hot water supply agreement
with Dominion to supply the hot water requirements of the Greenhouse.
Due to changed circumstances occurring in 1996, Whitewater and
Dominion agreed to terminate the Dominion Lease and the related hot
water supply agreement with Dominion. To replace these Dominion
arrangements, Whitewater has entered into an operational services
agreement (the "Greenhouse Operational Services Agreement") with
FloriCulture, Inc. ("FloriCulture"), an affiliate of Whitewater, to
operate the Greenhouse for the benefit of Whitewater.
Under the terms of the Greenhouse Operational Services Agreement,
FloriCulture is required to provide all the services necessary to
produce, market, and sell horticultural products and to operate and
maintain the Greenhouse facility. As compensation for its services,
FloriCulture is reimbursed on a monthly basis for its approved costs in
connection with conducting the Greenhouse business and operating the
Greenhouse facility, and will receive an annual management fee equal to
12% of Whitewater's net profit from the operation of the Greenhouse. The
term of the Greenhouse Operational Services Agreement expires on May 31,
2022, unless terminated earlier by mutual written agreement of
Whitewater and FloriCulture.
PART II/ITEM 1. LEGAL PROCEEDINGS
During the third quarter of 1997, Funding, Cottage Grove and
Whitewater have not been parties to any material legal proceedings.
PART II/ITEM 2. CHANGES IN SECURITIES
None.
PART II/ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
PART II/ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II/ITEM 5. OTHER INFORMATION
None.
PART II/ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
See the Exhibits Index at EI-1.
(B) REPORTS ON FORM 8-K
No reports on Form 8-K have been filed during the last quarter of
the period covered by this report.
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 of the undersigned thereunto duly authorized.
LS POWER FUNDING CORPORATION
By:
Name: Michael S. Liebelson
Title: Managing Director and Treasurer
Date: January 13, 1998
LSP-COTTAGE GROVE, L.P.
By: LSP-Cottage Grove, Inc.
Its: General Partner
By:
Name: Michael S. Liebelson
Title: Managing Director and Treasurer
Date: January 13, 1998
LSP-WHITEWATER LIMITED PARTNERSHIP
By: LSP-Whitewater I, Inc.
Its: General Partner
By:
Name: Michael S. Liebelson
Title: Managing Director and Treasurer
Date: January 13, 1998
LS POWER FUNDING CORPORATION
LSP-COTTAGE GROVE, L.P.
LSP-WHITEWATER LIMITED PARTNERSHIP
FINANCIAL STATEMENT INDEX
Page
LS POWER FUNDING CORPORATION
Balance sheets as of September 30, 1997 and December 31, 1996.......F-2
Statements of operations for the three months ended
September 30, 1997 and 1996, and for the nine months
ended September 30, 1997 and 1996................................F-3
Statements of cash flows for the nine months ended
September 30, 1997 and 1996......................................F-4
Notes to financial statements.......................................F-5
LSP-COTTAGE GROVE, L.P.
Balance sheets as of September 30, 1997 and December 31, 1996.......F-8
Statements of cash flows for the nine months ended June 30, 1997
and 1996, and the period from Inception (December 14, 1993)
to September 30, 1997............................................F-9
Notes to financial statements......................................F-10
LSP-WHITEWATER LIMITED PARTNERSHIP
Balance sheets as of September 30, 1997 and December 31, 1996......F-12
Statements of operations for the three and nine months
ended September 30, 1997 and 1996 ..............................F-13
Statements of cash flows for the three and nine months ended
September 30, 1997 and 1996.....................................F-14
Notes to financial statements......................................F-15
LS POWER FUNDING CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1997 1996
---- ----
(UNAUDITED)
CURRENT ASSETS:
<S> <C> <C>
Cash $ 1,000 $ 1,000
Interest receivable on First Mortgage Bonds 6,471,549 ---
-------------- ----------------
Total current assets 6,472,549 1,000
INVESTMENTS IN FIRST MORTGAGE BONDS 332,000,000 332,000,000
----------- ---------------
Total Assets $ 338,472,549 $ 332,001,000
============= ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITY - Interest payable on Senior Secured Bonds 6,471,549 ---
SENIOR SECURED BONDS PAYABLE 332,000,000 332,000,000
------------- --------------
Total liabilities 338,471,549 332,000,000
------------- --------------
CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 1,000 shares authorized,
100 share issued and outstanding 1 1
Additional paid-in-capital 999 999
------------------ ---------------
Total Stockholders' Equity 1,000 1,000
Total Liabilities and Stockholders' Equity $ 338,472,549 $ 332,001,000
============= ================
See accompanying notes to financial statements.
</TABLE>
LS POWER FUNDING CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income $ 6,471,549 $ 6,471,549 $ 19,414,647 $ 19,414,647
Interest expense 6,471,549 6,471,549 19,414,647 19,414,647
---------- ---------- ---------- ----------
Net income (loss) $ --- $ --- $ --- $ ---
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
LS POWER FUNDING CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30,
1997 1996
---- ----
Cash Flows From Operating Activities $ --- $ ---
-------- --------
Cash Flows From Investing Activities --- ---
-------- --------
Cash Flows From Financing Activities --- ---
-------- --------
Increase in cash --- ---
Cash, beginning of period 1,000 1,000
------ ------
Cash, end of period $1,000 $1,000
====== ======
See accompanying notes to financial statements.
LS POWER FUNDING CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. FINANCIAL STATEMENTS
The balance sheet as of September 30, 1997 and the statements of
operations and cash flows for the periods ended September 30, 1997 and
1996 have been prepared by LS Power Funding Corporation ("Funding"),
without audit. In the opinion of management, these financial statements
include all adjustments (consisting of normal recurring adjustments)
necessary to present fairly its financial position as of September 30,
1997, and the results of its operations and its cash flows for the
periods ended September 30, 1997 and 1996.
The unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. While Funding believes that
the disclosures made are adequate to make the information presented not
misleading, these financial statements should be read in conjunction with
Funding's audited financial statements included in Funding's Annual
Report on Form 10-K for the year ended December 31, 1996.
2. ORGANIZATION
Funding was established on June 23, 1995 as a special purpose Delaware
corporation to issue debt securities in connection with financing
construction of two gas fired cogeneration facilities, one located in
Cottage Grove, Minnesota (the "Cottage Grove Project") and the other
located in Whitewater, Wisconsin (the "Whitewater Project"). LSP-Cottage
Grove, L.P. ("Cottage Grove") and LSP-Whitewater Limited Partnership
("Whitewater") are Delaware limited partnerships established to develop,
finance, construct, own, operate and manage the facilities at Cottage
Grove and Whitewater, respectively. Cottage Grove and Whitewater each own
50% of the outstanding stock of Funding. Funding's sole business
activities are limited to maintaining its organization and activities
necessary pursuant to the offering of debt securities and its acquisition
of debt securities issued by Cottage Grove and Whitewater.
3. CONSTRUCTION
COTTAGE GROVE
The Partnership has a $109 million turnkey construction
contract (inclusive of executed change orders) with Westinghouse
Electric. Westinghouse Electric had committed to complete the
construction and start-up of the Cottage Grove Project to specified
performance levels by May 31, 1997 and is required under the contract to
reimburse the Partnership for extension fees paid under its power sales
contract with NSP, and to pay certain liquidated damages in the event of
a delay. The Partnership has recorded receivables from Westinghouse
Electric of $3,011,667 at September 30, 1997, which is comprised of
reimbursable extension fees of $266,667 and delay liquidated damages of
$2,745,000. Subsequent to September 30, 1997, these receivables have been
satisfied. In addition, Cottage Grove had received from Westinghouse cash
of $1,066,668 and $2,327,729 of reimbursable extension fees and delay
liquidated damages, respectively. The construction and start-up of the
Cottage Grove Project was substantially complete and commercial operation
commenced on October 1, 1997.
Effective September 30, 1997, the Partnership and the Contractor,
with the concurrence of R.W. Beck, the independent engineer, agreed to a
Construction Contract change order. Under the change order, certain
nonmaterial modifications were made to the Contract and certain
guarantees were deferred until final completion, which allowed the
Contractor to achieve substantial completion and the Partnership to
commence commercial operation. In addition, the Contractor committed to
certain future modifications in the Power Plant's construction, extension
of certain warranty periods and certain financial concessions.
During the October 27, 1997 scheduled outage of the Power Plant,
the Contractor identified one cracked blade and a number of cracked vanes
in the combustion turbine unit. The damaged components were replaced and
the unit was placed on-line as scheduled on November 10, 1997. As a
result of this apparent defect in the Power Plant and the significant
difficulties the Contractor encountered in achieving commercial
operation, the Partnership notified the Contractor that the Power Plant
may not meet the full requirements of the Construction Contract. The
Contractor has initially rejected this assertion. The ultimate outcome of
this dispute is unknown at the present time.
WHITEWATER
The Partnership has a $118 million turnkey construction contract
(inclusive of executed change orders) with Westinghouse Electric.
Westinghouse Electric had committed to complete the construction and
start-up of the Whitewater Project to specified performance levels by May
31, 1997 and is required under the contract to reimburse the Partnership
for extension fees paid under its power sales contract with WEPCO, and to
pay certain liquidated damages in the event of a delay. The Partnership
has recorded receivables from Westinghouse Electric of $2,195,001 at
September 30, 1997, which is comprised of reimbursable extension fees of
$35,001 and delay liquidated damages of $2,160,000. Subsequent to
September 30, 1997, these receivables have been satisfied. In addition,
Whitewater had received cash of $75,001 and $2,378,764 of reimbursable
extension fees and delay liquidated damages, respectively. The
construction and start-up of the Whitewater Project was substantially
completed and commercial operation commenced on September 18, 1997.
Effective September 18, 1997, the Partnership and the Contractor, with
the concurrence of R.W. Beck, the independent engineer, agreed to a
Construction Contract change order. Under the change order, certain
nonmaterial modifications were made to the Contract and certain
guarantees were deferred until final completion, which allowed the
Contractor to achieve substantial completion and the Partnership to
commence commercial operation.
In addition, the Contractor committed to certain future modifications in
the Power Plant's construction, extension of certain warranty periods and
certain financial concessions.
LS POWER FUNDING CORPORATION
NOTES TO FINANCIAL STATEMENTS - (CONCLUDED)
As a result of the inspection of the Cottage Grove combustion turbine
unit, the Contractor conducted a boroscopic inspection of the Whitewater
combustion turbine unit. During the inspection, the Contractor identified
one cracked blade and a number of cracked vanes in the combustion turbine
unit. The damaged components were replaced and the unit was placed
on-line November 24, 1997. The inspection and repair of the unit resulted
in the November scheduled outage being extended from two weeks to three
weeks. As a result of this apparent defect in the Power Plant and the
significant difficulties the Contractor encountered in achieving
commercial operation, the Partnership notified the Contractor that the
Power Plant may not meet the full requirements of the Construction
Contract. The Contractor has initially rejected this assertion. The
ultimate outcome of this dispute is unknown at the present time.
4. POWER SALES CONTRACTS
COTTAGE GROVE
Cottage Grove has a 30-year power sales contract with NSP. The power
sales contract was subject to termination if specified construction,
energy delivery and other milestone deadlines were not met. The
construction milestone was met with commencement of commercial operation
on October 1, 1997.
WHITEWATER
Whitewater has a 25-year power sales contract with WEPCO. The power
sales contract was subject to termination if specified construction,
energy delivery and other milestone deadlines were not met. The
construction milestone was met with commencement of commercial operation
on September 18, 1997.
For the period September 18, 1997 through September 30, 1997,
Whitewater recorded approximately $1,360,000 of operating revenue under
the power sales contract with WEPCO.
The Partnership and WEPCO disagree on the methodology to be used to
determine Committed Capacity of the Power Plant, as defined. The
disagreement centers around three major criteria: (i) the use of
evaporative coolers, steam injection and duct burners, (ii) the
determination of the ambient condition adjustment and (iii) the
requirement to demonstrate Committed Capacity while operating on fuel
oil. Settlement discussions are ongoing; however, if a settlement cannot
be reached the use of Dispute Resolution procedures as defined in the
Power Purchase Agreement will be required. The ultimate outcome of this
disagreement is unknown at the present time.
LSP-COTTAGE GROVE, L.P.
(A DELAWARE LIMITED PARTNERSHIP IN THE DEVELOPMENT STAGE)
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1997 1996
---- ----
(UNAUDITED)
<S> <C> <C>
CURRENT ASSET - Cash $ 371,201 $ 103,224
INVESTMENTS HELD BY TRUSTEE, stated at cost
which approximates market value 31,723,789 28,108,244
PLANT, PROPERTY AND EQUIPMENT 147,575,377 125,596,814
DEBT ISSUANCE AND FINANCE COSTS 6,582,559 6,773,753
OTHER ASSETS 500 500
-------------- -----------
Total Assets $ 186,253,426 $160,582,535
============= ============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 10,064,070 $ 5,581,535
Interest payable on First Mortgage Bonds 3,021,356 ---
--------- ------------
Total current liabilities 13,085,426 5,581,535
FIRST MORTGAGE BONDS PAYABLE 155,000,000 155,000,000
----------- ------------
Total Liabilities 168,085,426 160,581,535
CONTINGENCIES
PARTNERS' CAPITAL 18,168,000 1,000
Total Liabilities and Partners' Capital $ 186,253,426 $ 160,582,535
============= =============
See accompanying notes to financial statements.
</TABLE>
LSP-COTTAGE GROVE, L.P.
(A DELAWARE LIMITED PARTNERSHIP IN THE DEVELOPMENT STAGE)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
December 14,
1993 (Inception)
Nine Months Ended September 30, To September 30,
1997 1996 1997
---- ---- ----
Cash Flows From Investing Activities:
<S> <C> <C> <C>
Acquisition of land and improvements $ --- $ --- $ (97,590)
Payments on construction in progress (25,338,551) (62,267,572) (152,784,765)
Investments held by trustee (18,167,000) --- (173,167,000)
Investments drawn for construction 25,606,528 62,402,584 160,375,195
Investment in LS Power Funding Corporation --- --- (500)
---------------- ------------- --------------
Cash provided by (used in) investing activities (17,899,023) 135,012 (165,674,660)
---------------- ------------- --------------
Cash Flows From Financing Activities:
Debt issuance and financing costs --- (153,348) (7,122,139)
Proceeds from First Mortgage Bonds --- --- 155,000,000
Capital contributions 18,167,000 --- 18,168,000
--------------- ------------- --------------
Cash provided by (used in) financing activities 18,167,000 (153,348) 166,045,861
--------------- ------------- --------------
Increase (decrease) in cash 267,977 (18,336) 371,201
Cash, beginning of period 103,224 55,030 ---
---------------- ------------- --------------
Cash, end of period 371,201 36,694 371,201
================ ============= ==============
RECONCILIATION OF CHANGES IN
CONSTRUCTION IN PROGRESS
Increase in total construction in progress $ (21,978,563) $ (63,366,687) (147,477,787)
Amortization of debt issuance and financing costs 191,194 178,766 539,580
Interest income on investments held by trustee (1,181,496) (3,556,984) (9,058,317)
Decrease in other current assets --- 12,926 ---
(Increase) in pre-operation accounts receivable (4,850,820) --- (4,850,820)
Pre-operation cash receipts (5,022,757) --- (5,022,757)
Increase in accounts payable 4,482,535 1,443,051 10,064,070
Increase in interest payable 3,021,356 3,021,356 3,021,356
---------------- ------------- --------------
Payments on construction in progress $ (25,338,551) $ (62,267,572) (152,784,675)
================ ============== ==============
</TABLE>
See accompanying notes to financial statements.
LSP-COTTAGE GROVE, L.P.
(A DELAWARE LIMITED PARTNERSHIP IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
1. FINANCIAL STATEMENTS
The balance sheet as of September 30, 1997, and the
statements of cash flows for the periods ended September 30,
1997 and 1996 have been prepared by LSP-Cottage Grove, L.P. (the
"Partnership"), without audit. In the opinion of management,
these financial statements include all adjustments (consisting
of normal recurring adjustments) necessary to present fairly its
financial position as of September 30, 1997, and its cash flows
for the periods ended September 30, 1997 and 1996.
The unaudited financial statements have been prepared
pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have
been condensed or omitted. While the Partnership believes that
the disclosures made are adequate to make the information
presented not misleading, these financial statements should be
read in conjunction with the Partnership's audited financial
statements included in the Partnership's Annual Report on Form
10-K for the year ended December 31, 1996.
2. ORGANIZATION
The Partnership is a Delaware limited partnership that was
formed on December 14, 1993 to develop, finance, construct, own
and operate a gas-fired cogeneration facility with a design
capacity of approximately 245 megawatts to be located in Cottage
Grove, Minnesota (the "Cottage Grove Project"). The Partnership
holds a 50% equity ownership interest in LS Power Funding
Corporation ("Funding"), which was established on June 23, 1995
as a special purpose Delaware corporation to issue debt
securities in connection with financing construction of the
Cottage Grove Project and a similar gas-fired cogeneration
facility to be located in Whitewater, Wisconsin (the "Whitewater
Project"). On June 30, 1995, a portion of the proceeds from the
offering and sale of the debt securities issued by Funding was
used to purchase $155 million of debt securities issued
simultaneously by the Partnership.
3. INVESTMENTS HELD BY TRUSTEE
Investments held by trustee consists of:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
<S> <C> <C>
Overnight repurchase obligations $26,872,969 $28,108,244
Accounts receivable - Westinghouse 3,011,667 ---
Accounts receivable - Northern States Power Company 1,580,442 ---
Accounts receivable - Other 258,711 ---
----------- -----------
$31,723,789 $28,108,244
=========== ===========
</TABLE>
Overnight repurchase obligations are secured by U.S.
Treasury notes. Accounts receivable - Westinghouse represents
amounts due from Westinghouse Electric Corporation
("Westinghouse Electric"), the Partnership's construction
contractor, for reimbursement of extension fees paid to Northern
States Power Company ("NSP") under the Partnership's power sales
contract with NSP, and for delay liquidated damages due as a
result of Westinghouse Electric's failure to complete the
construction and start-up of the Cottage Grove Project by
May 31, 1997. Accounts receivable - Northern States Power Company
represents amounts due for test energy delivered to NSP during
start-up of the Cottage Grove Project. Revenues earned during
construction and start-up, including amounts related to the
aforementioned receivables, were capitalized as a reduction of
construction in progress.
The use of funds held by the trustee is restricted to payment of
project costs, including payment of interest on the First Mortgage Bonds.
Investments held by trustee are carried at cost, which approximated
market at September 30, 1997 and December 31, 1996.
4. CONSTRUCTION
The Partnership has a $109 million turnkey construction contract
(inclusive of executed change orders) with Westinghouse Electric.
Westinghouse Electric had committed to complete the construction and
start-up of the Cottage Grove Project to specified performance levels by
May 31, 1997 and is required under the contract to reimburse the
Partnership for extension fees paid under its power sales contract with
NSP, and to pay certain liquidated damages in the event of a delay. The
Partnership has recorded receivables from Westinghouse Electric of
$3,011,667 at September 30, 1997, which is comprised of reimbursable
extension fees of $266,667 and delay liquidated damages of $2,745,000.
Subsequent to September 30, 1997, these receivables have been satisfied.
In addition, Cottage Grove had received cash of $1,066,668 and $2,327,729
of reimbursable extension fees and delay liquidated damages,
respectively. The construction and start-up of the Cottage Grove Project
was substantially completed and commercial operation commenced on October
1, 1997
Effective September 30, 1997, the Partnership and the Contractor,
with the concurrence of R.W. Beck, the independent engineer, agreed to a
Construction Contract change order. Under the change order, certain
nonmaterial modifications were made to the Contract and certain
guarantees were deferred until final completion, which allowed the
Contractor to achieve substantial completion and the Partnership to
commence commercial operation. In addition, the Contractor committed to
certain future modifications in the Power Plant's construction, extension
of certain warranty periods and certain financial concessions.
During the October 27, 1997 scheduled outage of the Power Plant, the
Contractor identified one cracked blade and a number of cracked vanes in
the combustion turbine unit. The damaged components were replaced and the
unit was placed on-line as scheduled on November 10, 1997. As a result of
this apparent defect in the Power Plant and the significant difficulties
the Contractor encountered in achieving commercial operation, the
Partnership notified the Contractor that the Power Plant may not meet the
full requirements of the Construction Contract. The Contractor has
initially rejected this assertion. The ultimate outcome of this dispute
is unknown at the present time.
5. POWER SALES CONTRACT
The Partnership has a 30- year power sales contract with NSP. The power
sales contract was subject to termination if specified construction,
energy delivery and other milestone deadlines were not met. The
construction milestone was met with commencement of commercial operation
on October 1, 1997.
LSP-WHITEWATER LIMITED PARTNERSHIP
(A DELAWARE LIMITED PARTNERSHIP)
BALANCE SHEETS
September 30, December 31,
1997 1996
---- ----
ASSETS (UNAUDITED)
CURRENT ASSETS:
Cash $ 296,951 $ 101,114
Accounts receivable - trade 1,361,505 --
Fuel inventory and other current assets 1,196,143 575
------------ ------------
Total current assets 2,854,599 101,689
INVESTMENTS HELD BY TRUSTEE, stated at
cost which approximates market value 28,940,940 34,414,528
PLANT, PROPERTY AND EQUIPMENT, NET 172,494,839 149,232,431
DEBT ISSUANCE AND FINANCE COSTS, NET 6,673,931 6,868,561
OTHER ASSETS 500 500
------------ ------------
Total Assets $210,964,809 $190,617,709
============ ============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES :
Accounts payable $ 9,958,565 $ 13,616,709
Interest payable on First Mortgage Bonds 3,450,193 --
------------ ------------
Total current liabilities 13,408,758 13,616,709
FIRST MORTGAGE BONDS PAYABLE 177,000,000 177,000,000
------------ ------------
Total Liabilities 190,408,758 190,616,709
CONTINGENCIES
PARTNERS' CAPITAL 20,556,051 1,000
------------ ------------
Total Liabilities and Partners' Capital $210,964,809 $190,617,709
============ ============
See accompanying notes to financial statements.
LSP-WHITEWATER LIMITED PARTNERSHIP
(A DELAWARE LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three and Nine Months Ended
---------------------------
September 30, September 30,
1997 1996
---- ----
REVENUE $ 1,361,505 $ ---
COST OF SALES:
Fuel 459,650 ---
Operations and maintenance 156,007 ---
Depreciation 245,760 ---
----------- ----------
861,417 ---
OPERATING INCOME 500,088 ---
NON-OPERATING INCOME (EXPENSES):
Interest expense (507,984) ---
Other income, net 6,947 ---
------- ----------
NET LOSS $ (949) $ ---
============ ===========
See accompanying notes to financial statements.
LSP-WHITEWATER LIMITED PARTNERSHIP
(A DELAWARE LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (949) $ -- $ (949) $ ---
Adjustments to reconcile net loss
to net cash used by operating
activities:
Depreciation and amortization 255,381 -- 255,381 --
(Increase) in accounts receivable (1,361,505) -- (1,361,505) --
(Increase) in fuel inventory and
other current assets (1,196,143) -- (1,196,143) --
Increase in accounts payable 894,741 -- 894,741 --
------------- ------------- ------------- -------------
Cash used by operating activities (1,408,475) -- (1,408,475) --
------------- ------------- ------------- -------------
Cash Flows From Investing Activities:
Acquisition of land and improvements -- -- -- (2,146,986)
Deposits for land purchase -- -- -- 2,001,221
Proceeds from land sale 939,399 -- 939,399 --
Payments on construction in progress (8,655,272) (24,298,972) (35,127,799) (67,522,392)
Investments held by trustee -- -- (20,556,000) --
Investments drawn for construction 8,973,663 24,319,151 35,792,712 67,836,907
------------- ------------- ------------- -------------
Cash provided by (used in) investing
activities 1,257,790 20,179 (18,951,688) 168,750
------------- ------------- ------------- -------------
Cash Flows From Financing Activities:
Debt issuance and financing costs -- -- -- (153,348)
Capital contributions -- -- 20,556,000 --
------------- ------------- ------------- -------------
Cash provided by (used in) financing
activities -- -- 20,566,000 (153,348)
------------- ------------- ------------- -------------
Increase (decrease) in cash (150,685) 20,179 195,837 15,402
Cash, beginning of period 447,636 66,664 101,114 71,441
------------- ------------- ------------- -------------
Cash, end of period $ 296,951 $ 86,843 $ 296,951 $ 86,843
============= ============= ============= =============
RECONCILIATION OF CHANGES IN
CONSTRUCTION IN PROGRESS
Decrease (increase) in total
construction in progress $ 163,725,356 $ (26,952,700) $ 145,694,150 $ (68,707,425)
Construction in progress placed
in service (170,141,717) -- (170,141,717) --
Amortization of debt issuance
and financing costs 56,987 61,514 185,009 182,062
Interest income on investments
held by trustee (406,258) (1,038,366) (1,272,158) (4,062,078)
Decrease in other current assets -- -- 575 --
Increase in pre-operation accounts
receivable (716,920) -- (2,632,367) --
Pre - operation cash receipts (5,858,599) -- (5,858,599) --
Increase (decrease) in accounts
payable 1,235,686 180,387 (4,552,885) 1,614,856
Increase in interest payable 3,450,193 3,450,193 3,450,193 3,450,193
------------- ------------- ------------- -------------
Payments on construction in progress $ (8,655,272) $ (24,298,972) $ (35,127,799) $ (67,522,392)
============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
LSP-WHITEWATER LIMITED PARTNERSHIP
(A DELAWARE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
1. FINANCIAL STATEMENTS
The balance sheet as of September 30, 1997, and the statements of
operations and cash flows for the periods ended September 30, 1997 and
1996 have been prepared by LSP-Whitewater Limited Partnership (the
"Partnership"), without audit. In the opinion of management, these
financial statements include all adjustments (consisting of normal
recurring adjustments) necessary to present fairly its financial position
as of September 30, 1997, statements of operations and its cash flows for
the periods ended September 30, 1997 and 1996.
The unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. While the Partnership believes
that the disclosures made are adequate to make the information presented
not misleading, these financial statements should be read in conjunction
with the Partnership's audited financial statements included in the
Partnership's Annual Report on Form 10-K for the year ended December 31,
1996.
2. ORGANIZATION
The Partnership is a Delaware limited partnership that was formed on
December 14, 1993 to develop, finance, construct, own and operate a
gas-fired cogeneration facility with a design capacity of approximately
245 megawatts to be located in Whitewater, Wisconsin (the "Whitewater
Project"). The Partnership holds a 50% equity ownership interest in LS
Power Funding Corporation ("Funding"), which was established on June 23,
1995 as a special purpose Delaware corporation to issue debt securities
in connection with financing construction of the Whitewater Project and a
similar gas-fired cogeneration facility to be located in Cottage Grove,
Minnesota (the "Cottage Grove Project"). On June 30, 1995, a portion of
the proceeds from the offering and sale of the debt securities issued by
Funding was used to purchase $177 million of debt securities issued
simultaneously by the Partnership.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Partnership had been in the development stage since its inception
through September 17, 1997. Construction and start-up of the Whitewater
Project was substantially completed and commercial operation commenced
September 18, 1997.
ELECTRIC AND STEAM GENERATING FACILITIES / CONSTRUCTION IN PROGRESS
Prior to commercial operation on September 18, 1997 all development
and construction costs and all interest costs (including amortization of
debt issuance and financing costs), net of interest income on excess
proceeds, were capitalized. All interest costs subsequent to that date
have been charged to expense. As of September 30, 1997, capitalized
interest including amortization of debt issuance and financing costs was
$20,873,600 ($20,333,713 before amortization). Cash paid for interest was
$27,601,541 since inception and none for the three months ended September
30, 1997.
Depreciation of electric and steam generating facilities is computed
using the straight-line method over the 25 year estimated economic life
of the Whitewater Project.
REVENUE RECOGNITION
The Partnership is evaluating whether the Power Sales contracts
qualify for lease accounting under Generally Accepted Accounting
Principles. Final determination will be completed prior to the release of
the December 31, 1997 audited financial statements.
Revenue from the sale of electricity and steam for the period
September 18, 1997 through September 30, 1997 is recorded based upon
output delivered and capacity provided at the payment rates as specified
under contract terms. Revenue for the period September 18, 1997 through
September 30, 1997 consisted primarily of sales of electricity.
4. INVESTMENTS HELD BY TRUSTEE
Investments held by trustee consists of:
September 30, December 31,
1997 1996
---- ----
Overnight repurchase obligations $ 26,308,573 $ 34,414,528
Accounts receivable - Westinghouse 2,195,001 ---
Accounts receivable - Wisconsin
Electric Power Company 380,518 ---
Accounts receivable - Other 56,848 ---
------------ ------------
$ 28,940,940 $ 34,414,528
============ ============
Overnight repurchase obligations are secured by U.S. Treasury notes.
Accounts receivable - Westinghouse represents amounts due from
Westinghouse Electric Corporation ("Westinghouse Electric"), the
Partnership's construction contractor, for delay liquidated damages due
as a result of Westinghouse Electric's failure to complete the
construction and start-up of the Whitewater Project by May 31, 1997.
Accounts receivable - Wisconsin Electric Power Company represents amounts
due for test energy delivered to Wisconsin Electric Power Company
("WEPCO") during start-up of the Whitewater Project. Revenues earned
during construction and start-up, including amounts related to the
aforementioned receivables, were capitalized as a reduction of
construction in progress.
The use of funds held by the trustee is restricted to payment of
project costs, including payment of interest on the First Mortgage Bonds.
Investments held by trustee are carried at cost, which approximated
market at September 30, 1997 and December 31, 1996.
5. CONSTRUCTION
The Partnership had a $118 million turnkey construction contract
(inclusive of executed change orders) with Westinghouse Electric.
Westinghouse Electric had committed to complete the construction and
start-up of the Whitewater Project to specified performance levels by May
31, 1997 and is required under the contract to reimburse the Partnership
for extension fees paid under its power sales contract with WEPCO, and to
pay certain liquidated damages in the event of a delay. The Partnership
has recorded receivables from Westinghouse Electric of $2,195,001 at
September 30, 1997, which is comprised of reimbursable extension fees of
$35,001 and delay liquidated damages of $2,160,000. Subsequent to
September 30, 1997, these have been satisfied. In addition, Whitewater
had received cash of $75,001 and $2,378,764 of reimbursable extension
fees and delay liquidated damages, respectively. The construction and
start-up of the Whitewater Project was substantially completed and
commercial operation commenced on September 18, 1997.
Effective September 30, 1997, the Partnership and the Contractor,
with the concurrence of R.W. Beck, the independent engineer, agreed to a
Construction Contract change order. Under the change order, certain
nonmaterial modifications were made to the Contract and certain
guarantees were deferred until final completion, which allowed the
Contractor to achieve substantial completion and the Partnership to
commence commercial operation. In addition, the Contractor committed to
certain future modifications in the Power Plant's construction, extension
of certain warranty periods and certain financial concessions.
As a result of the inspection of the Cottage Grove combustion turbine
unit, the Contractor conducted a boroscopic inspection of the Whitewater
combustion turbine unit. During the inspection, the Contractor identified
one cracked blade and a number of cracked vanes in the combustion turbine
unit. The damaged components were replaced and the unit was placed
on-line November 24, 1997. The inspection and repair of the unit resulted
in the November scheduled outage being extended from two weeks to three
weeks. As a result of this apparent defect in the Power Plant and the
significant difficulties the Contractor encountered in achieving
commercial operation, the Partnership notified the Contractor that the
Power Plant may not meet the full requirements of the Construction
Contract. The Contractor has initially rejected this assertion. The
ultimate outcome of this dispute is unknown at the present time.
6. PLANT, PROPERTY AND EQUIPMENT
Plant, property and equipment consists of:
September 30, December 31,
1997 1996
---- ----
Land and improvements $ 2,598,882 $ 3,538,281
Energy and steam generating facilities 170,141,717 ---
Construction in progress --- 145,694,150
------------- -------------
172,740,599 149,232,431
Accumulated depreciation (245,760) ---
-------------- -------------
$ 172,494,839 $ 149,232,431
============= =============
7. POWER SALES CONTRACT
The Partnership has a 25- year power sales contract with WEPCO. The
power sales contract was subject to termination if specified
construction, energy delivery and other milestone deadlines were not met.
The construction milestone was met with commencement of commercial
operation on September 18, 1997.
In accordance with the power sales contract with WEPCO, the
Partnership is responsible for reimbursing WEPCO for the actual increased
costs of capacity and energy acquired to replace the capacity and energy,
which were to be provided by the Whitewater Project. The Partnership's
obligation to reimburse WEPCO for these "Replacement Power" costs began
on June 23, 1997 and continued until September 17, 1997. The Partnership
has an obligation for Replacement Power costs if WEPCO's actual costs of
capacity and energy exceed the amounts, which would have been paid to the
Partnership under the PPA. For the period from June 23, 1997 through
September 17, 1997, WEPCO has provided invoices for Replacement Power
costs in the aggregate amount of approximately $3,200,000. This amount
has been reflected in the Partnership's balance sheet as of September 30,
1997, and in its statements of cash flows for the periods then ended.
Whitewater's obligation for Replacement Power costs is a project cost and
will be payable from the project's construction fund.
For the period September 18, 1997 through September 30, 1997,
Whitewater recorded approximately $1,360,000 of operating revenue under
the power sales contract with WEPCO.
The Partnership and WEPCO disagree on the methodology to be used to
determine Committed Capacity of the Power Plant, as defined. The
disagreement centers around three major criteria: (i) the use of
evaporative coolers, steam injection and duct burners, (ii) the
determination of the ambient condition adjustment and (iii) the
requirement to demonstrate Committed Capacity while operating on fuel
oil. Settlement discussions are ongoing; however, if a settlement cannot
be reached the use of Dispute Resolution procedures as defined in the
Power Purchase Agreement will be required. The ultimate outcome of this
disagreement is unknown at the present time.
LS POWER FUNDING CORPORATION
LSP-COTTAGE GROVE, L.P.
LSP-WHITEWATER LIMITED PARTNERSHIP
EXHIBITS INDEX
Exhibit No. Description
3.1. Certificate of Incorporation of LS Power Funding Corporation.*
3.2. Bylaws of LS Power Funding Corporation.*
3.3. Certificated of Limited Partnership of LSP-Cottage
Grove, L.P.*
3.4. Amended and Restated Partnership Agreement dated as of
June 30, 1995 among LSP-Cottage Grove, Inc., Granite
Power Partners, L.P. and TPC Cottage Grove, Inc.*
3.4.1 Amendment #1 to Cottage Grove Partnership Agreement.****
3.5. Certificate of Limited Partnership of LSP-Whitewater
Limited Partnership.*
3.6. Amended and Restated Partnership Agreement dated as of
June 30, 1995 among LSP-Whitewater I, Inc., Granite
Power Partners, L.P. and TPC Whitewater, Inc.*
4.1. Trust Indenture dated as of May 1, 1995 by and among LS
Power Funding Corporation and IBJ Schroder Bank & Trust
Company, as Trustee, with respect to the Senior Secured
Bonds (as supplemented by the First Supplemental
Indenture dated as of May 1, 1995 by and among LS Power
Funding Corporation and IBJ Schroder Bank & Trust
Company, as Trustee).*
4.2. Trust Indenture dated as of May 1, 1995 by and among
LSP-Cottage Grove, L.P. and IBJ Schroder Bank & Trust
Company, as Trustee, with respect to the Cottage Grove
First Mortgage Bonds (as supplemented by the First
Supplemental Indenture dated as of May 1, 1995 by and
among LSP-Cottage Grove, L.P. and IBJ Schroder Bank &
Trust Company, as Trustee).*
4.3. Trust Indenture dated as of May 1, 1995 by and among
LSP-Whitewater Limited Partnership and IBJ Schroder
Bank & Trust Company, as Trustee, with respect to the
Whitewater First Mortgage Bonds (as supplemented by the
First Supplemental Indenture dated as of May 1, 1995 by
and among LSP-Whitewater Limited Partnership and IBJ
Schroder Bank & Trust Company, as Trustee).*
4.4. Registration Rights Agreement dated as of June 30, 1995
by and among Chase Securities, Inc., Morgan Stanley &
Co. Incorporated, LS Power Funding Corporation, LSP-
Cottage Grove, L.P. and LSP-Whitewater Limited
Partnership.*
4.5. Form of Senior Secured Bond (included in Exhibit 4.1).*
4.6. Form of Cottage Grove First Mortgage Bond (included in
Exhibit 4.2).*
4.7. Form of Whitewater First Mortgage Bond (included in
Exhibit 4.3).*
LS POWER FUNDING CORPORATION AGREEMENTS
10.20. Agency Agreement dated May 1, 1995 between LS
Power Funding Corporation and LSP-Cottage Grove, L.P.*
10.21. Agency Agreement dated May 1, 1995 between LS
Power Funding Corporation and LSP-Whitewater Limited
Partnership.*
10.22. Security Agreement (related to Cottage Grove)
dated as of May 1, 1995 between LS Power Funding
Corporation and IBJ Schroder Bank & Trust Company, as
Trustee.*
10.23. Security Agreement (related to Whitewater) dated
as of May 1, 1995 between LS Power Funding Corporation
and IBJ Schroder Bank & Trust Company, as Trustee.*
LSP-COTTAGE GROVE, L.P. AGREEMENTS
10.24. Equity Contribution Agreement dated June 30, 1995
among LSP-Cottage Grove, L.P., TPC Cottage Grove, Inc.
and The Chase Manhattan Bank (National Association), as
depositary agent.*
10.25. Collateral Agency and Intercreditor Agreement
dated as of May 1, 1995 among LSP-Cottage Grove, L.P.,
the L/C Facility Agent (as defined therein), the
Working Capital Agent (as defined therein), each
Permitted Counterparty under any Interest Rate
Protection Agreement (as defined therein), each
Additional Permitted Debt Agent (as defined therein),
IBJ Schroder Bank & Trust Company, as trustee, the
Other Representatives (as defined therein) and The
Chase Manhattan Bank (National Association), as
depositary agent, and as collateral agent.*
10.26. Deposit and Disbursement Agreement dated as of May
1, 1995 among LSP-Cottage Grove, L.P. and The Chase
Manhattan Bank (National Association), as collateral
agent, and as depositary agent.*
10.27. Credit Agreement dated as of May 1, 1995 among
LSP-Cottage Grove, L.P., the lenders party thereto and
The Chase Manhattan Bank (National Association), as
agent.*
10.27.1 Instrument of Assignment, Resignation,
Appointment, Acceptance and Designation dated as of
December 31, 1995 among The Chase Manhattan Bank
(National Association), Dresdner Bank AG, New York and
Grand Cayman Branches, and LSP-Cottage Grove, L.P.***
10.27.2 Amendment No. 1 to Credit Agreement dated as of
December 31, 1995 among LSP-Cottage Grove, L.P. and
Dresdner Bank AG, New York Branch, as agent.***
10.28. Assignment and Security Agreement dated as of May
1, 1995 between LSP-Cottage Grove, L.P. and The Chase
Manhattan Bank (National Association), as collateral
agent.*
10.29. Pledge Agreement dated as of May 1, 1995 between
LSP-Cottage Grove, L.P. and IBJ Schroder Bank & Trust
Company, as trustee.*
10.30. Mortgage, Assignment of Rents, Security Agreement
and Fixture Filing dated as of May 1, 1995 between LSP-
Cottage Grove, L.P. and The Chase Manhattan Bank
(National Association), as collateral agent, for the
benefit of IBJ Schroder Bank & Trust Company, as
trustee.*
10.31. Mortgage, Assignment of Rents, Security Agreement
and Fixture Filing dated as of May 1, 1995 between LSP-
Cottage Grove, L.P. and The Chase Manhattan Bank
(National Association), as collateral agent, for the
benefit of The Chase Manhattan Bank (National
Association), as agent under the Credit Agreement.*
10.32. Subordinated Mortgage, Assignment of Rents,
Security Assignment and Fixture Filing dated as of May
1, 1995 by LSP-Cottage Grove, L.P., as mortgagor, and
Northern States Power Company, as mortgagee.*
10.33. Subordinated Assignment and Security Agreement
dated as of May 1, 1995 between LSP-Cottage Grove, L.P.
and Northern States Power Company.*
10.34. Power Purchase Agreement dated as of May 9, 1994
between Northern States Power Company and LSP-Cottage
Grove, L.P.*
10.35. Letter Agreement dated December 16, 1994 between
Northern States Power Company and LSP-Cottage Grove,
L.P.*
10.36. Letter Agreement dated June 1, 1995 between
Northern States Power Company and LSP-Cottage Grove,
L.P.*
10.37. Letter Agreement dated June 8, 1995 between
Northern States Power Company and LSP-Cottage Grove,
L.P.*
10.38. Letter Agreement dated June 12, 1995 between
Northern States Power Company and LSP-Cottage Grove,
L.P.*
10.39. Assignment dated as of November 23, 1994 between
Granite Power Partners, L.P. and LSP-Cottage Grove,
L.P.*
10.40. Second Amended and Restated Turnkey Construction
Agreement dated as of April 11, 1995 between
Westinghouse Electric Corporation and LSP-Cottage
Grove, L.P.**
10.41. Amended and Restated Operation and Maintenance
Agreement dated as of April 11, 1995 between
Westinghouse Operating Services Company, Inc. and LSP-
Cottage Grove, L.P.**
10.42. Parts Agreement dated as of April 11, 1995 between
Westinghouse Electric Corporation and LSP-Cottage
Grove, L.P.**
10.43. Management Services Agreement dated as of May 1,
1995 between LS Power Corporation and LSP-Cottage
Grove, L.P.*
10.44. Second Amended and Restated Steam Supply Agreement
dated as of June 19, 1995 between the Minnesota Mining
and Manufacturing Company and LSP-Cottage Grove, L.P.*
10.45. Purchase and Sale Agreement dated September 30,
1994 between the Minnesota Mining and Manufacturing
Company and LSP-Cottage Grove, L.P.*
10.46. Letter Agreement (land and easement) dated
September 30, 1994 between the Minnesota Mining and
Manufacturing Company and LSP-Cottage Grove, L.P.*
10.47. Letter Agreement (side letter to steam agreement)
dated September 30, 1994 between the Minnesota Mining
and Manufacturing Company and LSP-Cottage Grove, L.P.*
10.48. Gas Sales Contract dated as of December 22, 1994
between Natural Gas Clearinghouse and LSP-Cottage
Grove, L.P.*
10.49. First Amendment to Gas Sales Contract dated as of
April 18, 1995 between Natural Gas Clearinghouse and
LSP-Cottage Grove, L.P.*
10.50. Gas Sales Contract dated as of February 16, 1995
among Aquila Energy Marketing Corporation, UtiliCorp
United, Inc. and LSP-Cottage Grove, L.P.*
10.51. First Amendment to Gas Sales Contract dated as of
April 26, 1995 among Aquila Energy Marketing
Corporation, UtiliCorp United, Inc. and LSP-Cottage
Grove, L.P.*
10.52. Amended and Restated Gas Supply Transportation
Agreement dated as of May 8, 1995 between Peoples
Natural Gas Company and LSP-Cottage Grove, L.P.*
10.53. Amended and Restated Cottage Grove Letter
Agreement dated as of April 10, 1995 between Northern
Natural Gas Company, Peoples Natural Gas Company and
LSP-Cottage Grove, L.P.*
10.54. Firm Throughput Service Agreement (Northern
Contract #24042) dated April 25, 1995 between Northern
Natural Gas Company and LSP-Cottage Grove, L.P.*
10.55. Interruptible Throughput Service Agreement
(Northern Contract # 24198) dated April 25, 1995
between Northern Natural Gas Company and LSP-Cottage
Grove, L.P.*
10.56. Interruptible Throughput Service Agreement
(Northern Contract #24199) dated April 25, 1995 between
Northern Natural Gas Company and LSP-Cottage Grove,
L.P.*
10.57. Firm Deferred Delivery Service Agreement (Northern
Contract #23281) dated as of April 25, 1995 between
Northern Natural Gas Company and LSP-Cottage Grove,
L.P.*
10.58. Interruptible Deferred Delivery Service Agreement
(Northern Contract #24203) dated as of April 25, 1995
between Northern Natural Gas Company and LSP-Cottage
Grove, L.P.*
10.59. Letter Agreement dated as of April 21, 1995
between Northern Natural Gas Company and LSP-Cottage
Grove, L.P.*
10.60. Limited Warranty Deed granted by Minnesota Mining
and Manufacturing Company to LSP-Cottage Grove, L.P.
dated June 1, 1995.*
10.61. Consent and Agreement dated as of May 1, 1995
among Northern States Power Company, LSP-Cottage Grove,
L.P. and The Chase Manhattan Bank (National
Association), as collateral agent.*
10.62. Consent and Agreement dated as of May 1, 1995
among Westinghouse Electric Corporation, LSP-Cottage
Grove, L.P. and The Chase Manhattan Bank (National
Association), as collateral agent.*
10.63. Consent and Agreement dated as of May 1, 1995
among Westinghouse Operating Services Company, Inc.,
LSP-Cottage Grove, L.P. and The Chase Manhattan Bank
(National Association), as collateral agent.*
10.64. Consent and Agreement dated as of May 1, 1995
among Minnesota Mining and Manufacturing Company, LSP-
Cottage Grove, L.P. and The Chase Manhattan Bank
(National Association), as collateral agent.*
10.65. Consent and Agreement dated as of May 1, 1995
among Natural Gas Clearinghouse, LSP-Cottage Grove,
L.P. and The Chase Manhattan Bank (National
Association), as collateral agent.*
10.66. Consent and Agreement dated as of May 1, 1995
among Aquila Energy Marketing Corporation, UtiliCorp
United, Inc., LSP-Cottage Grove, L.P. and The Chase
Manhattan Bank (National Association), as collateral
agent.*
10.67. Consent and Agreement dated as of May 1, 1995
among Northern Natural Gas Company, Peoples Natural Gas
Company, LSP-Cottage Grove, L.P. and The Chase
Manhattan Bank (National Association), as collateral
agent.*
10.68. Consent and Agreement dated as of May 1, 1995
among Northern Natural Gas Company, LSP-Cottage Grove,
L.P. and The Chase Manhattan Bank (National
Association), as collateral agent.*
10.69. Consent and Agreement dated as of May 1, 1995
among Peoples Natural Gas Company, LSP-Cottage Grove,
L.P. and The Chase Manhattan Bank (National
Association), as collateral agent.*
10.70. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Cottage Grove, L.P.,
Northern States Power Company and Westinghouse Electric
Corporation.*
10.71. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Cottage Grove, L.P.,
Northern States Power Company and Westinghouse
Operating Services Company, Inc.*
10.72. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Cottage Grove, L.P.,
Northern States Power Company and Aquila Energy
Marketing Corporation.*
10.73. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Cottage Grove, L.P.,
Northern States Power Company and Natural Gas
Clearinghouse.*
10.74. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Cottage Grove, L.P.,
Northern States Power Company and Northern Natural Gas
Company.*
10.75. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Cottage Grove, L.P.,
Northern States Power Company, Northern Natural Gas
Company and Peoples Natural Gas Company.*
10.76. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Cottage Grove, L.P.,
Northern States Power Company and Peoples Natural Gas
Company.*
10.77. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Cottage Grove, L.P.,
Northern States Power Company and Minnesota Mining and
Manufacturing Company.*
10.78. Grants of Easement by Minnesota Mining and
Manufacturing Company to LSP-Cottage Grove, L.P., each
dated May 30, 1994, for the following: (i) Easterly
Utilities, (ii) Westerly Utilities, (iii) New Well, and
(iv) Well Lines.*
10.79. Temporary Construction Easement granted by
Minnesota Mining and Manufacturing Company to LSP-
Cottage Grove, L.P.*
10.80. Easements from Soo Line Railroad Company to LSP-
Cottage Grove, L.P., for Easterly and Westerly Railroad
Crossroads, each dated June 27, 1995.*
10.81. Assignments of Rights and Privileges dated June
12, 1995 by and between Minnesota Mining and
Manufacturing Company and LSP-Cottage Grove, L.P.*
LSP-WHITEWATER LIMITED PARTNERSHIP AGREEMENTS
10.82. Equity Contribution Agreement dated as of May 1,
1995 among LSP-Whitewater Limited Partnership, TPC
Whitewater, Inc. and The Chase Manhattan Bank
(National Association), as depositary agent.*
10.83. Collateral Agency and Intercreditor Agreement
dated as of May 1, 1995 among LSP-Whitewater Limited
Partnership, the L/C Facility Agent (as defined
therein), the Working Capital Agent (as defined
therein), each Permitted Counterparty under any
Interest Rate Protection Agreement (as defined
therein), each Additional Permitted Debt Agent (as
defined therein), IBJ Schroder Bank & Trust Company, as
trustee, the Other Representatives (as defined therein)
and The Chase Manhattan Bank (National Association), as
depositary agent, and as collateral agent.*
10.84. Deposit and Disbursement Agreement dated as of May
1, 1995 among LSP-Whitewater Limited Partnership and
The Chase Manhattan Bank (National Association), as
collateral agent, and as depositary agent.*
10.85. Credit Agreement dated as of May 1, 1995 among
LSP-Whitewater Limited Partnership, the lenders party
thereto and The Chase Manhattan Bank (National
Association), as agent.*
10.85.1 Instrument of Assignment, Resignation,
Appointment, Acceptance and Designation dated as of
December 31, 1995 among The Chase Manhattan Bank
(National Association), Dresdner Bank AG, New York and
Grand Cayman Branches, and LSP-Whitewater Limited
Partnership.***
10.85.2 Amendment No. 1 to Credit Agreement dated as of
December 31, 1995 among LSP-Whitewater Limited
Partnership and Dresdner Bank AG, New York Branch, as
agent.***
10.86. Assignment and Security Agreement dated as of May
1, 1995 between LSP-Whitewater Limited Partnership and
The Chase Manhattan Bank (National Association), as
collateral agent.*
10.87. Pledge Agreement dated as of May 1, 1995 between
LSP-Whitewater Limited Partnership and IBJ Schroder
Bank & Trust Company, as trustee.*
10.88. Mortgage, Assignment of Rents, Security Agreement
and Fixture Filing dated as of May 1, 1995 between LSP-
Whitewater Limited Partnership and The Chase Manhattan
Bank (National Association), as collateral agent, for
the benefit of IBJ Schroder Bank & Trust Company, as
trustee.*
10.89. Mortgage, Assignment of Rents, Security Agreement
and Fixture Filing dated as of May 1, 1995 between LSP-
Whitewater Limited Partnership and The Chase Manhattan
Bank (National Association), as collateral agent, for
the benefit of the Chase Manhattan Bank (National
Association), as agent under the Credit Agreement.*
10.90. Subordinated Mortgage, Assignment of Rents,
Security Assignment and Fixture Filing dated as of May
1, 1995 by LSP-Whitewater Limited Partnership, as
mortgagor, and Wisconsin Electric Power Company, as
mortgagee.*
10.91. Subordinated Assignment and Security Agreement
dated as of May 1, 1995 between LSP-Whitewater Limited
Partnership and Wisconsin Electric Power Company.*
10.92. Development Agreement dated as of November 23,
1994 between City of Whitewater and LSP-Whitewater
Limited Partnership.*
10.93. Power Purchase Agreement dated as of December 21,
1993 between Wisconsin Electric Power Company and LSP-
Whitewater Limited Partnership.*
10.94. Amendment to Power Purchase Agreement dated as of
February 10, 1994 between Wisconsin Electric Power
Company and LSP-Whitewater Limited Partnership.*
10.95. Second Amendment to Power Purchase Agreement dated
as of October 5, 1994 between Wisconsin Electric Power
Company and LSP-Whitewater Limited Partnership.*
10.96. Third Amendment to Power Purchase Agreement dated
as of May 5, 1995 between Wisconsin Electric Power
Company and LSP-Whitewater Limited Partnership.*
10.96.1 Fourth Amendment to Power Purchase Agreement dated
as of March 18, 1997 between Wisconsin Electric Power
Company and LSP-Whitewater Limited Partnership.*****
10.97. Interconnection Agreement dated as of May 12, 1995
between Wisconsin Electric Power Company and LSP-
Whitewater Limited Partnership.*
10.98. Intentionally Omitted.
10.99. Assignment dated as of November 23, 1994 between
Granite Power Partners, L.P. and LSP-Whitewater Limited
Partnership.*
10.100 Second Amended and Restated Turnkey Construction
Agreement dated as of April 11, 1995 between
Westinghouse Electric Corporation and LSP-Whitewater
Limited Partnership.**
10.101. Amended and Restated Operation and Maintenance
Agreement dated as of April 11, 1995 between
Westinghouse Operating Services Company, Inc. and LSP-
Whitewater Limited Partnership.**
10.102. Parts Agreement dated as of April 10, 1995 between
Westinghouse Electric Corporation and LSP-Whitewater
Limited Partnership.**
10.103. Management Services Agreement dated as of May 1,
1995 between LS Power Corporation and LSP-Whitewater
Limited Partnership.*
10.104. Steam Supply Agreement dated as of July 25, 1994
between the Department of Administration of the State
of Wisconsin and LSP-Whitewater Limited Partnership.*
10.105. Greenhouse Hot Water Supply Agreement dated as of
May 1, 1995 between Dominion Growers/Whitewater, L.C.
and LSP-Whitewater Limited Partnership.*
10.106. Construction Contract dated as of May 1, 1995
between Dominion Growers/Whitewater, L.C. and LSP-
Whitewater Limited Partnership.*
10.106.1 Addendum to Construction Contract dated as of June
6, 1997 between Dominion Growers/Whitewater, L.C. and
LSP-Whitewater Limited Partnership. ******
10.107. Deed of Lease dated as of May 1, 1995 between
Dominion Growers/Whitewater, L.C. and LSP-Whitewater
Limited Partnership.*
10.107.1 Settlement Agreement dated as of May 27, 1997
between Dominion Growers/Whitewater, L.C. and LSP-
Whitewater Limited Partnership. ******
10.107.2 Greenhouse Operational Services Agreement dated as
of May 27, 1997 between FloriCulture, Inc. and LSP-
Whitewater Limited Partnership. ******
10.108. Letter Agreement dated May 12, 1995 between
Dominion Growers, Inc. and LSP-Whitewater Limited
Partnership.*
10.109. Gas Sales Contract dated as of December 22, 1994
between Natural Gas Clearinghouse and LSP-Whitewater
Limited Partnership.*
10.110. First Amendment to Gas Sales Contract dated as of
April 18, 1995 between Natural Gas Clearinghouse and
LSP-Whitewater Limited Partnership.*
10.111. Gas Sales Contract dated as of February 16, 1995
among Aquila Energy Marketing Corporation, UtiliCorp
United, Inc. and LSP-Whitewater Limited Partnership.*
10.112. First Amendment to Gas Sales Contract dated as of
April 26, 1995 among Aquila Energy Marketing
Corporation, UtiliCorp United, Inc. and LSP-Whitewater
Limited Partnership.*
10.113. Letter Agreement dated April 21, 1995 between
Northern Natural Gas Company and LSP-Whitewater Limited
Partnership.*
10.114. Amended and Restated Letter Agreement dated as of
April 10, 1995 between Northern Natural Gas Company and
LSP-Whitewater Limited Partnership.*
10.115. Gas Transportation Agreement dated March 9, 1995
between Wisconsin Natural Gas Company and LSP-
Whitewater Limited Partnership.*
10.116. Capacity Release and Gas Sales Agreement dated as
of April 27, 1995 between Wisconsin Power and Light
Company and LSP-Whitewater Limited Partnership.*
10.117. First Amendment to Capacity Release and Gas Sales
Agreement dated as of June 2, 1995 between Wisconsin
Power and Light Company and LSP-Whitewater Limited
Partnership.*
10.118. Firm Throughput Service Agreement (Northern
Contract #23479) dated April 25, 1995 between Northern
Natural Gas Company and LSP-Whitewater Limited
Partnership.*
10.119. Interruptible Throughput Service Agreement
(Northern Contract #24200) dated April 25, 1995 between
Northern Natural Gas Company and LSP-Whitewater Limited
Partnership.*
10.120. Interruptible Throughput Service Agreement
(Northern Contract #24201) dated April 25, 1995 between
Northern Natural Gas Company and LSP-Whitewater Limited
Partnership.*
10.121. Firm Deferred Delivery Service Agreement (Northern
Contract #23282) dated as of April 25, 1995 between
Northern Natural Gas Company and LSP-Whitewater Limited
Partnership.*
10.122. Interruptible Deferred Delivery Service Agreement
(Northern Contract #24202) dated as of April 25, 1995
between Northern Natural Gas Company and LSP-Whitewater
Limited Partnership.*
10.123. Consent and Agreement dated as of May 1, 1995
between City of Whitewater, LSP-Whitewater Limited
Partnership and The Chase Manhattan Bank (National
Association), as collateral agent.*
10.124. Consent and Agreement dated as of May 1, 1995
among Wisconsin Electric Power Company, LSP-Whitewater
Limited Partnership and The Chase Manhattan Bank
(National Association), as collateral agent.*
10.125. Consent and Agreement dated as of May 1, 1995
among Westinghouse Electric Corporation, LSP-Whitewater
Limited Partnership and The Chase Manhattan Bank
(National Association), as collateral agent.*
10.126. Consent and Agreement dated as of May 1, 1995
among Westinghouse Operating Services Company, Inc.,
LSP-Whitewater Limited Partnership and The Chase
Manhattan Bank (National Association), as collateral
agent.*
10.127. Consent and Agreement dated as of May 1, 1995
among State of Wisconsin, acting through the
Department of Administration, LSP-Whitewater Limited
Partnership and The Chase Manhattan Bank (National
Association), as collateral agent.*
10.128. Consent and Agreement dated as of May 1, 1995
between Dominion Growers/Whitewater, L.C., LSP-
Whitewater Limited Partnership and The Chase Manhattan
Bank (National Association), as collateral agent.*
10.129. Consent and Agreement dated as of May 1, 1995
among Natural Gas Clearinghouse, LSP-Whitewater Limited
Partnership and The Chase Manhattan Bank (National
Association), as collateral agent.*
10.130. Consent and Agreement dated as of May 1, 1995
among Aquila Energy Marketing Corporation, UtiliCorp
United, Inc., LSP-Whitewater Limited Partnership and
The Chase Manhattan Bank (National Association), as
collateral agent.*
10.131. Consent and Agreement dated as of May 1, 1995
among Wisconsin Natural Gas Company, LSP-Whitewater
Limited Partnership and The Chase Manhattan Bank
(National Association), as collateral agent.*
10.132. Consent and Agreement dated as of May 1, 1995
among Northern Natural Gas Company, LSP-Whitewater
Limited Partnership and The Chase Manhattan Bank
(National Association), as collateral agent.*
10.133. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Whitewater Limited
Partnership, Wisconsin Electric Power Company and
Westinghouse Electric Corporation.*
10.134. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Whitewater Limited
Partnership, Wisconsin Electric Power Company and
Westinghouse Operating Services Company, Inc.*
10.135. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Whitewater Limited
Partnership, Wisconsin Electric Power Company and
Aquila Energy Marketing Corporation.*
10.136. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Whitewater Limited
Partnership, Wisconsin Electric Power Company and
Natural Gas Clearinghouse.*
10.137. Subordinated Creditor Consent and Agreement dated
as of May 1, 1995 among LSP-Whitewater Limited
Partnership, Wisconsin Electric Power Company and
Northern Natural Gas Company.*
10.138. Easement dated May 11, 1995 granted by the
University of Wisconsin-Whitewater to LSP-Whitewater
Limited Partnership.*
10.139. Easement dated March 22, 1995 granted by the City
of Whitewater to LSP-Whitewater Limited Partnership.*
10.140. Easement dated March 22, 1995 granted by the City
of Whitewater to LSP-Whitewater Limited Partnership.*
10.141. Easement dated March 22, 1995 granted by the City
of Whitewater to LSP-Whitewater Limited Partnership.*
10.142. Easement dated March 22, 1995 granted by the City
of Whitewater to LSP-Whitewater Limited Partnership.*
10.143. Easement dated June 2, 1995 granted by Joe C.
Pattermann and June M. Pattermann to LSP-Whitewater
Limited Partnership.*
10.144. Easement dated September 10, 1994 granted by Joe
C. Pattermann and June M. Pattermann to LSP-Whitewater
Limited Partnership.*
10.145. Easement dated May 25, 1995 granted by John P.
Hill and Rosalee K. Hill to LSP-Whitewater Limited
Partnership.*
10.146. Easement dated June 1, 1994 granted by Mark D.
Hoffmann to LSP-Whitewater Limited Partnership.*
10.147. Easement dated May 31, 1995 granted by Daniel L.
Schwertfeger and Jeanne M. Schwertfeger to LSP-
Whitewater Limited Partnership.*
10.148. Easement dated June 2, 1995 granted by Jerry C.
Kollwelter and Donna L. Kollwelter to LSP-Whitewater
Limited Partnership.*
10.149. Easement dated June 1, 1995 granted by Lowell C.
Hagen and Thu T. Hagen to LSP-Whitewater Limited
Partnership.*
10.150. Easement dated June 1, 1995 granted by Dean A. Cox
and Maybell Cox to LSP-Whitewater Limited Partnership.*
10.151. Easement dated June 5, 1995 granted by John s
Disposal Service, Inc. to LSP-Whitewater Limited
Partnership.*
10.152. Easement dated June 12, 1995 granted by Greg
Lurvey and Mark Lurvey to LSP-Whitewater Limited
Partnership.*
10.153. Easement dated October 24, 1994 granted by Perry
Moyer and Dorothy Moyer to LSP-Whitewater Limited
Partnership.*
10.154. Easement dated October 24, 1994 granted by Perry
Moyer and Dorothy Moyer to LSP-Whitewater Limited
Partnership.*
10.155. Easement dated May 30, 1995 granted by Perry Moyer
and Dorothy Moyer to LSP-Whitewater Limited
Partnership.*
10.156. Easement dated May 30, 1995 granted by Perry Moyer
and Dorothy Moyer to LSP-Whitewater Limited
Partnership.*
10.157. Easement dated June 5, 1995 granted by Robert J.
Wagner to LSP-Whitewater Limited Partnership.*
10.158. Easement dated June 5, 1995 granted by Robert J.
Wagner to LSP-Whitewater Limited Partnership.*
GRANITE POWER PARTNERS, L.P. AGREEMENTS
10.159. Pledge Agreement dated as of May 1, 1995 between
Granite Power Partners, L.P. and The Chase Manhattan
Bank (National Association), as collateral agent.*
10.160. Pledge Agreement dated as of May 1, 1995 between
Granite Power Partners, L.P. and The Chase Manhattan
Bank (National Association), as collateral agent.*
10.161. Assignment dated as of November 23, 1994 between
Granite Power Partners, L.P. and LSP-Cottage Grove,
L.P.*
10.162. Assignment dated as of November 23, 1994 between
Granite Power Partners L.P. and LSP-Whitewater Limited
Partnership.*
10.163. Acknowledgment and Consent dated June 30, 1995
among Wisconsin Electric Power Company, LSP-Whitewater
I, Inc., Granite Power Partners, L.P. and TPC
Whitewater, Inc.*
10.164. Amendment to Participation Agreement dated as of
June 29, 1995 between Tomen Power Corporation and
Granite Power Partners, L.P.*
LSP-COTTAGE GROVE, INC. AGREEMENTS
10.165. Security Agreement dated as of May 1, 1995 between
LSP-Cottage Grove, Inc. and The Chase Manhattan Bank
(National Association), as collateral agent.*
10.166. Management Services Agreement dated as of May 1,
1995 between LS Power Corporation and LSP-Cottage
Grove, Inc.*
LSP-WHITEWATER I, INC. AGREEMENTS
10.167. Security Agreement dated as of May 1, 1995 between
LSP-Whitewater I, Inc. and The Chase Manhattan Bank
(National Association), as collateral agent.*
10.168. Management Services Agreement dated as of May 1,
1995 between LS Power Corporation and LSP-Whitewater I,
Inc.*
10.169. Acknowledgment and Consent dated June 30, 1995
among Wisconsin Electric Power Company, LSP-Whitewater
I, Inc., Granite Power Partners, L.P. and TPC
Whitewater, Inc.*
LS POWER CORPORATION AGREEMENTS
10.170. Amended and Restated Limited Partnership Agreement
of Granite Power Partners, L.P. dated January 16, 1992
among LS Power Corporation, Chase Manhattan Capital
Corporation and Joseph Cogen.*
10.171. First Amendment to Amended and Restated Limited
Partnership Agreement of Granite Power Partners, L.P.
dated December 30, 1993 among LS Power Corporation,
Chase Manhattan Capital Corporation and Joseph Cogen.*
_____________________
* Incorporated herein by reference from the Registration
Statement on Form S-4, File No. 33-95928 filed with the
Securities and Exchange Commission by LS Power Funding
Corporation, LSP-Cottage Grove, L.P. and LSP-Whitewater
Limited Partnership (collectively, the Registrants )
on August 16, 1995, as amended.
** In addition to the note for "*" above, confidential
treatment has been granted for certain portions of the
noted document.
*** Incorporated herein by reference from the Annual Report
on Form 10-K for the fiscal year ended December 31,
1995, File No. 33-95928 filed with the Securities and
Exchange Commission by the Registrants.
**** Incorporated herein by reference from the Quarterly
Report on Form 10-Q for the quarterly period ended June
30, 1996, File No. 33-95928 filed with the Securities
and Exchange Commission by the Registrants.
***** Incorporated herein by reference from the
Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1997, File No. 33-95928 filed with the
Securities and Exchange Commission by the Registrants.
****** Incorporated herein by reference from the
Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1997, File No. 33-95928 filed with the
Securities and Exchange Commission by the Registrants.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEETS AND STATEMENTS OF OPERATIONS OF LS POWER FUNDING
CORPORATION AS OF AND FOR THE PERIOD ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
Central Index Key
<NAME> LS POWER FUNDING CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,473
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 338,473
<CURRENT-LIABILITIES> 6,472
<BONDS> 332,000
0
0
<COMMON> 0
<OTHER-SE> 1
<TOTAL-LIABILITY-AND-EQUITY> 338,473
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,472
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF LSP-COTTAGE GROVE, L.P. AS OF
AND FOR THE PERIOD ENDED SEPTEMBER 30, 1997, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
Central Index Key
<NAME> LSP-COTTAGE GROVE, L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 371
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 371
<PP&E> 147,575
<DEPRECIATION> 0
<TOTAL-ASSETS> 186,253
<CURRENT-LIABILITIES> 13,085
<BONDS> 155,000
0
0
<COMMON> 0
<OTHER-SE> 18,168
<TOTAL-LIABILITY-AND-EQUITY> 186,253
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEETS AND STATEMENTS OF OPERATIONS OF LSP-WHITEWATER LIMITED
PARTNERSHIP AS OF AND FOR THE PERIOD ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
Central Index Key
<NAME> LSP-WHITEWATER LIMITED PARTNERSHIP
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 297
<SECURITIES> 0
<RECEIVABLES> 1,362
<ALLOWANCES> 0
<INVENTORY> 1,196
<CURRENT-ASSETS> 2,855
<PP&E> 172,495
<DEPRECIATION> 246
<TOTAL-ASSETS> 210,965
<CURRENT-LIABILITIES> 13,409
<BONDS> 177,000
0
0
<COMMON> 0
<OTHER-SE> 20,556
<TOTAL-LIABILITY-AND-EQUITY> 210,965
<SALES> 1,362
<TOTAL-REVENUES> 1,362
<CGS> 861
<TOTAL-COSTS> 861
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 508
<INCOME-PRETAX> (1)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
