Table of
Contents


UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q


(Mark
One)




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




For the
quarterly period ended September 30, 2008


or




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




For the
transition period from _____ to _____





Commission
file number:   0-21304





RIDGEWOOD
ELECTRIC POWER TRUST II


(Exact
Name of Registrant as Specified in Its Charter)





Delaware
              
              22-3206429(State
      of Other Jurisdiction
                of
      Incorporation or Organization)
              
              (I.R.S.
      Employer Identification No.)





1314
      King Street, Wilmington, DE
                
                19801(Address
      of Principal Executive Offices)
                
                (Zip
      Code)







(302)
      888-7444(Issuer’s
      Telephone Number, Including Area Code)





Not
      Applicable(Former
      name, former address and former fiscal year, if changed since last
      report)





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  xNo  o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





Large accelerated
      filer    o
            Accelerated
      filer    o
            Non-accelerated
      filer     o
            Smaller reporting
      company    x(Do
      not check if a smaller reporting
company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes oNo x





As of
September 30, 2008, there were 235.3775 Investor Shares
outstanding.





Table of Contents




FORM
      10-QTABLE OF
      CONTENTSPART
      I.
                  FINANCIAL
      INFORMATION
                  PageItem 1.
                  Financial Statements
                  1Item 2.
                  Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
                  6Item 3.
                  Quantitative and Qualitative Disclosures About Market
      Risk
                  7Item 4.
                  Controls and Procedures
                  7PART
      II.
                  OTHER
      INFORMATIONItem 1.
                  Legal Proceedings
                  8Item 1A.
                  Risk Factors
                  8Item 2.
                  Unregistered Sales of Equity Securities and Use of
      Proceeds
                  8Item 3.
                  Defaults Upon Senior Securities
                  8Item 4.
                  Submission of Matters to a Vote of Security
      Holders
                  8Item 5.
                  Other Information
                  8Item 6.
                  Exhibits
                  9SIGNATURES
                  
                  10








Table of Contents





PART
I.   FINANCIAL INFORMATION





ITEM
1.   FINANCIAL STATEMENTS




RIDGEWOOD ELECTRIC
      POWER TRUST IICONDENSED
      CONSOLIDATED BALANCE SHEETS(in
      thousands, except share data)September
      30,
                      
                      
                      December
      31,2008
                      
                      
                      2007(unaudited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                      
                      $
                      4,303
                      
                      
                      $
                      5,250Due
      from affiliates
                      
                      
                      3
                      
                      
                      
                      5Other
      current assets
                      
                      
                      75
                      
                      
                      
                      31Total
      assets
                      
                      $
                      4,381
                      
                      
                      $
                      5,286LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable and accrued expenses
                      
                      $
                      15
                      
                      
                      $
                      169Commitments
      and contingenciesShareholders’
      equity (deficit):Shareholders’
      equity (235.3775 Investor Shares issued andoutstanding)
                      
                      
                      4,524
                      
                      
                      
                      5,267Managing
      shareholder’s accumulated deficit(1
      management share issued and outstanding)
                      
                      
                      (158
                      )
                      
                      
                      (150
                      )Total
      shareholders’ equity
                      
                      
                      4,366
                      
                      
                      
                      5,117Total
      liabilities and shareholders’ equity
                      
                      $
                      4,381
                      
                      
                      $
                      5,286







The
accompanying notes are an integral part of these condensed consolidated
financial statements.





1
 Table of Contents





RIDGEWOOD ELECTRIC
      POWER TRUST IICONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited,
      in thousands, except per share data)Nine
      Months Ended September 30,
                  
                  
                  Three
      Months Ended September 30,2008
                  
                  
                  2007
                  
                  
                  2008
                  
                  
                  2007Cost
      of revenues
                  
                  $
                  193
                  
                  
                  $
                  242
                  
                  
                  $
                  52
                  
                  
                  $
                  81Gross
      loss
                  
                  
                  (193
                  )
                  
                  
                  (242
                  )
                  
                  
                  (52
                  )
                  
                  
                  (81
                  )Operating
      expenses:General
      and administrative expenses
                  
                  
                  588
                  
                  
                  
                  405
                  
                  
                  
                  73
                  
                  
                  
                  150Management
      fee to Managing Shareholder
                  
                  
                  58
                  
                  
                  
                  6
                  
                  
                  
                  20
                  
                  
                  
                  2Total
      operating expenses
                  
                  
                  646
                  
                  
                  
                  411
                  
                  
                  
                  93
                  
                  
                  
                  152Loss
      from operations
                  
                  
                  (839
                  )
                  
                  
                  (653
                  )
                  
                  
                  (145
                  )
                  
                  
                  (233
                  )Other
      income:Interest
      income
                  
                  
                  62
                  
                  
                  
                  -
                  
                  
                  
                  11
                  
                  
                  
                  -Other
      income
                  
                  
                  26
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Gain
      on sale of investment
                  
                  
                  -
                  
                  
                  
                  502
                  
                  
                  
                  -
                  
                  
                  
                  168Total
      other income
                  
                  
                  88
                  
                  
                  
                  502
                  
                  
                  
                  11
                  
                  
                  
                  168Net
      loss
                  
                  $
                  (751
                  )
                  
                  $
                  (151
                  )
                  
                  $
                  (134
                  )
                  
                  $
                  (65
                  )Managing
      Shareholder - Net loss
                  
                  $
                  (8
                  )
                  
                  $
                  (1
                  )
                  
                  $
                  (1
                  )
                  
                  $
                  -Shareholders
      - Net loss
                  
                  
                  (743
                  )
                  
                  
                  (150
                  )
                  
                  
                  (133
                  )
                  
                  
                  (65
                  )Net
      loss per Investor Share
                  
                  
                  (3,158
                  )
                  
                  
                  (637
                  )
                  
                  
                  (563
                  )
                  
                  
                  (276
                  )






The
accompanying notes are an integral part of these condensed consolidated
financial statements.





2
 Table of Contents





RIDGEWOOD ELECTRIC
      POWER TRUST IICONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited,
      in thousands)Nine
      Months Ended September 30,2008
                  
                  
                  2007Cash
      flows from operating activities:Net
      cash (used in) provided by operating activities
                  
                  $
                  (947
                  )
                  
                  $
                  12Cash
      and cash equivalents, beginning of period
                  
                  
                  5,250
                  
                  
                  
                  395Cash
      and cash equivalents, end of period
                  
                  $
                  4,303
                  
                  
                  $
                  407







The
accompanying notes are an integral part of these condensed consolidated
financial statements.




3
 Table of Contents




RIDGEWOOD ELECTRIC POWER
TRUST II
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited,
dollar amounts in thousands)





1.  BASIS
OF PRESENTATION





The
accompanying unaudited condensed consolidated financial statements have been
prepared pursuant to the rules of the United States Securities and Exchange
Commission (the “SEC”). Certain information and footnote disclosures normally
included in consolidated financial statements prepared in accordance with
accounting principles generally accepted in the United States of America
(“GAAP”) have been condensed or omitted pursuant to SEC rules. These condensed
consolidated financial statements should be read in conjunction with the
Ridgewood Electric Power Trust II (the “Trust”) Annual Report on Form 10-K for
the year ended December 31, 2007 filed with the SEC on March 14, 2008 (the
“2007 Form 10-K”). No significant changes have been made to the Trust’s
accounting policies and estimates disclosed in its 2007 Form
10-K.





In the
opinion of management, the condensed consolidated financial statements as of
September 30, 2008, and for the nine and three months ended September 30,
2008 and 2007, include all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the consolidated financial position,
results of operations and cash flows for the periods presented. The results of
operations for the nine and three months ended September 30, 2008 and 2007,
are not necessarily indicative of the results to be expected for the full year
or any other period.





2.  DESCRIPTION
OF BUSINESS





The Trust
is a Delaware trust formed in November 1992. The Trust began offering shares in
January 1993 and concluded its offering in January 1994. The objective of the
Trust is to provide benefits to its shareholders through a combination of
distributions of operating cash flow and capital appreciation. The Managing
Shareholder of the Trust is Ridgewood Renewable Power LLC (“RRP” or the
“Managing Shareholder”). The Trust was organized to invest primarily in
independent power generation facilities located in the US.





The
Trust’s accompanying condensed consolidated financial statements include the
accounts of the Trust and its wholly-owned subsidiary, Sunnyside Cogeneration
Partners, L.P. (“Monterey”). Monterey is a 5.5 megawatt (“MW”) cogeneration
project located in California which suspended operations in January 2006 due to
a contract dispute with its customer. Since the closing of the Monterey facility
in January 2006, the Trust has not had any operating revenues, though it
continues to have certain expenses relating to its idle facility. The Monterey
project remains closed as of the date of this filing.





3.  RECENT
ACCOUNTING PRONOUNCEMENTS




SFAS
157





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard (“SFAS”) No. 157, Fair Value Measurements
(“SFAS 157”), to define fair value, establish a framework for measuring fair
value in accordance with GAAP and expand disclosures about fair value
measurements. SFAS 157 requires quantitative disclosures using a tabular format
in all periods (interim and annual) and qualitative disclosures about the
valuation techniques used to measure fair value in all annual periods. In
February 2008, FASB issued Staff Position 157-2, Effective Date of FASB Statement
No. 157, which delays the effective date of SFAS 157 for
non-financial assets and non-financial liabilities for the Trust until January
1, 2009, except for items that are recognized or disclosed at fair value in the
financial statements on a recurring basis.  In October 2008, the FASB
issued Staff Position 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active,which clarifies the
application of SFAS 157 in a market that is not active and to determine the fair
value of a financial asset when the market for that financial asset is not
active. The Trust adopted SFAS 157 for financial assets and financial
liabilities effective January 1, 2008, with no material impact on its condensed
consolidated financial statements.  Staff Position 157-3 does not have
a material impact on its condensed consolidated financial statements. The Trust
is currently evaluating the impact of adopting SFAS 157 for non-financial
assets and non-financial liabilities on its condensed consolidated
financial statements.





SFAS
159





In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities (“SFAS 159”), which expands
opportunities to use fair value measurements in financial reporting and permits
entities to choose to measure many financial instruments and certain other items
at fair value. The Trust adopted SFAS 159 effective January 1, 2008, with no
material impact on its condensed consolidated financial statements.




SFAS
162
  In
May 2008, the FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles (“SFAS 162”).  SFAS 162
identifies the sources of accounting principles and the framework for selecting
principles to be used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with GAAP.  This
statement shall be effective 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board’s amendments to AU section 411, The Meaning of
Present Fairly in Conformity with Generally Accepted Accounting
Principles. The Trust is currently evaluating the impact of adopting SFAS
162 on its condensed consolidated financial statements.




4
 Table of Contents




RIDGEWOOD
ELECTRIC POWER TRUST II
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited,
dollar amounts in thousands)





4. 
CASH AND CASH EQUIVALENTS





The Trust
considers all highly liquid investments with maturities, when purchased, of
three months or less to be cash and cash equivalents. At September 30, 2008,
amounts in excess of insured limits are directly or indirectly invested in US
government backed securities.





5.  COMMITMENTS
AND CONTINGENCIES





Monterey
has a non-cancelable operating lease which expires in May 2021. Future minimum
lease payments as of December 31, 2007 are approximately $12 per annum along
with the delivery of by-product steam.  In connection with this lease,
Monterey has not delivered by-product steam since it was shut down in January
2006. As a result, Monterey may be subject to penalties by the lessor. No claims
have been asserted by the lessor as of the date of this filing.





Monterey
received notice on December 1, 2005 from Pacific
Gas and Electric Company (“PG&E”)directing Monterey to increase its operations from 13 hours, 5 days a
week to 24 hours, 7 days a week. However, PG&E had been operating or
"dispatching" Monterey on a 13 by 5 basis for over 15 years.  Monterey
determined that it could not operate profitably on such a 24 by 7 schedule and
was concerned that if it only operated on a 13 by 5 basis, PG&E might refuse
to pay for delivered electricity. Monterey requested from PG&E to limit its
operations to the 13 by 5 basis, but this request was denied. As a result,
effective January 9, 2006, Monterey ceased its operations. Monterey and PG&E
have filed lawsuits against the other for breach of contract. The Monterey
project remains closed as of the date of this filing. Monterey filed a
Complaint against PG&E in the San Francisco Superior Court on May 16, 2006
(the “Monterey Complaint”).  The Monterey Complaint seeks damages for
breach of contract, damages for PG&E’s breach of the implied covenant of
good faith and fair dealing, and a claim for declaratory relief against
PG&E, seeking a judicial determination that PG&E’s conduct materially
breached the parties’ agreement and justified Monterey’s suspension of
performance. Monterey is seeking damages against PG&E estimated at
approximately $5,000.




On May
14, 2007, PG&E filed a Complaint in San Francisco Superior Court against
Monterey (the “PG&E Complaint”).  The PG&E Complaint arises out of
the same transactions and occurrences that gave rise to the Monterey Complaint
against PG&E.  PG&E asserted claims for compensatory damages for
breach of contract and breach of the implied covenant of good faith and fair
dealing as well as “restitution” of capacity payments made to Monterey on a
theory of unjust enrichment, and declaratory relief for repayment of capacity
payments made to the Monterey. PG&E was seeking restitution damages
against Monterey estimated at approximately $4,800.





The
claims made by PG&E have been made solely against Monterey and do not
involve any claims against the Trust. In March 2008, Monterey and PG&E
reached a tentative settlement of all claims against each other. The
Managing Shareholder cannot project the timing of this settlement, or if such a
settlement will occur because, among other things, such settlement is subject to
the approval of the California Public Utilities Commission; such approval was
requested by PG&E in July 2008.




On August
16, 2006, the Trust and several affiliated entities, including the Managing
Shareholder, filed lawsuits against the former independent registered public
accounting firm for the Trust and several affiliated entities, Perelson Weiner,
LLP (“Perelson Weiner”), in New Jersey Superior Court.  The suits alleged
professional malpractice and breach of contract in connection with audit and
accounting services performed for the Trust and other plaintiffs by Perelson
Weiner. On October 20, 2006, Perelson Weiner filed a counterclaim against the
Trust and other plaintiffs alleging breach of contract due to unpaid invoices
with a combined total of approximately $1,200. Discovery is ongoing and no trial
date has been set. The costs and expenses of the litigation are being paid for
by the Managing Shareholder and affiliated management companies and not the
underlying investment funds, including the Trust.




The Trust
is subject to legal proceedings involving ordinary and routine claims related to
its business. The ultimate legal and financial liability with respect to
such matters cannot be estimated with certainty and requires the use of
estimates in recording liabilities for potential litigation settlements.
Estimates for losses from litigation are disclosed if considered reasonably
possible and accrued if considered probable after consultation with outside
counsel. If estimates of potential losses increase or the related facts and
circumstances change in the future, the Trust may be required to record
additional litigation expense. While it is not possible to predict the
outcome of the litigation discussed above with certainty and some lawsuits,
claims or proceedings may be disposed of unfavorably to the Trust, based on its
evaluation of matters which are pending or asserted, the Trust’s management
believes the disposition of such matters will not have a material adverse effect
on the Trust’s business or its financial statements.




5
 Table of Contents





ITEM
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS





The
purpose of this discussion and analysis of the operating results and financial
condition as of September 30, 2008 is intended to help readers analyze the
accompanying condensed consolidated financial statements, notes and other
supplemental information contained in this document.  Results of
operations for the nine and three months ended September 30, 2008 are not
necessarily indicative of results to be attained for any other period. This
discussion and analysis should be read in conjunction with the accompanying
condensed consolidated financial statements, notes and other supplemental
information included elsewhere in this report and Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” of the
Trust’s 2007 Form 10-K.





Forward-Looking
Statements




Certain
statements discussed in this item and elsewhere in this Quarterly Report on Form
10-Q constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
generally relate to the Trust’s plans, objectives and expectations for future
events and include statements about the Trust’s expectations, beliefs, plans,
objectives, intentions, assumptions and other statements that are not historical
facts. These statements are based upon management’s opinions and estimates
as of the date they are made. Although management believes that the expectations
reflected in these forward-looking statements are reasonable, such
forward-looking statements are subject to known and unknown risks and
uncertainties that may be beyond the Trust’s control, which could cause actual
results, performance and achievements to differ materially from the results,
performance and achievements projected, expected, expressed or implied by the
forward-looking statements. Examples of events that could cause actual results
to differ materially from historical results or those anticipated include the
outcome of the litigation described in Part II, Item 1. “Legal Proceedings” of
this report, changes in political and economic conditions, federal or state
regulatory structures, government mandates, the ability of customers to pay for
energy received, supplies and prices of fuels, operational status of generating
plants, mechanical breakdowns, volatility in the price for electric energy,
natural gas or renewable energy. Additional information concerning the factors
that could cause actual results to differ materially from those in the
forward-looking statements is contained in Item 1A. “Risk Factors” and
Item 7. “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” of the Trust’s 2007 Form 10-K. The Trust undertakes no
obligation to publicly revise any forward-looking statements or cautionary
factors, except as required by law.





Critical
Accounting Policies and Estimates





The
following discussion and analysis of the Trust’s financial condition and
operating results is based on its condensed consolidated financial
statements.  The preparation of this Quarterly Report on Form 10-Q
requires the Trust to make estimates and assumptions that affect the reported
amount of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the Trust’s condensed consolidated financial
statements, and the reported amount of revenue and expenses during the reporting
period. Actual results may differ from those estimates and
assumptions.  No material changes have been made to the Trust’s
critical accounting policies and estimates disclosed in its 2007 Form
10-K.





Results
of Operations and Changes in Financial Condition





Nine
months ended September 30, 2008 compared to the nine months ended September 30,
2007





Gross
loss of $0.2 million for the nine months ended September 30, 2008 was comparable
to the same period in 2007. Gross loss primarily represents expenses such as
maintenance, rent and property taxes incurred even though the Monterey project
was not in operation during both periods.





General
and administrative expenses increased by $0.2 million to $0.6 million for the
nine months ended September 30, 2008, as compared to $0.4 million for the same
period in 2007. This was primarily due to an increase in professional
fees.





The Trust
recorded a gain on sale of investment of $0.5 million for the nine months ended
September 30, 2007 due to collections of its notes receivable, which were paid
in full in October 2007.





Total
assets decreased by $0.9 million from $5.3 million at December 31, 2007 to $4.4
million at September 30, 2008, primarily due to a decrease in cash and cash
equivalents used to fund operations as the Trust generated a $0.8 million loss
for the nine month period. Total liabilities decreased from $0.2 million at
December 31, 2007 to $15,000 at September 30, 2008 due to a decrease in accounts
payable and accrued expenses.





6
 Table of Contents





Three
months ended September 30, 2008 compared to the three months ended September 30,
2007





Gross
loss of $0.1 million for the three months ended September 30, 2008 was
comparable to the same period in 2007. Gross loss primarily represents expenses
such as maintenance, rent and property taxes incurred even though the Monterey
project was not in operation during both periods.





General
and administrative expenses decreased by $0.1 million to $0.1 million for the
three months ended September 30, 2008, as compared to $0.2 million for the same
period in 2007. This was primarily due to a decrease in professional
fees.





The Trust
recorded a gain on sale of investment of $0.2 million for the three months ended
September 30, 2007 due to collections of its notes receivable, which were paid
in full in October 2007.





Liquidity
and Capital Resources





Nine
months ended September 30, 2008 compared to the nine months ended September 30,
2007





At
September 30, 2008, the Trust had cash and cash equivalents of $4.3 million
compared to $5.3 million at December 31, 2007, a decrease of $1 million. The
cash flows for the nine months ended September 30, 2008 represents $1 million
used in operating activities.





Cash used
in operating activities for the nine months ended September 30, 2008 was $1
million compared to cash provided of $12,000 for the same period in 2007. The
decrease in cash flow of $1 million was primarily due to an increase in loss
from operations for the nine months ended September 30, 2008 as a result of
increased professional fees, partially offset by a gain on sale of investment
relating to the collections of notes receivable in 2007.





There
were no cash flows from either investing or financing activities for the nine
months ended September 30, 2008 and 2007.





Future
Liquidity and Capital Resource Requirements





The Trust
expects cash flow from operating activities to be minimal since the operations
of Monterey has ceased. The Trust believes sufficient cash and cash equivalents
are available to provide working capital and fund capital expenditures for the
next 12 months.





Off-Balance
Sheet Arrangements and Contractual Obligations and Commitments





There
have been no material changes in the off-balance sheet arrangements and
contractual obligations and commitments disclosed in the Trust's 2007
Form 10-K.




ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Not
required.





ITEM 4.  CONTROLS
AND PROCEDURES





In
accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), the Trust’s Chief Executive Officer and Chief
Financial Officer evaluate the effectiveness of the Trust’s disclosure controls
and procedures, as defined in Exchange Act Rule 13a-15(e). Based on this
evaluation, the Trust’s Chief Executive Officer and Chief Financial Officer
concluded that the Trust’s disclosure controls and procedures were effective as
of the end of the period covered by this report to ensure that information
required to be disclosed by a registrant in reports filed pursuant to the
Exchange Act are recorded, processed, summarized and reported within the time
periods specified in the SEC rules and forms and that information required to be
disclosed by a registrant is accumulated and communicated to senior management
so as to allow timely decisions regarding required disclosure.




Changes
in Internal Control over Financial Reporting





The
Trust’s Chief Executive Officer and Chief Financial Officer have concluded that
there was no change in the Trust's internal control over financial reporting (as
such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred
during the quarter ended September 30, 2008 that has materially affected, or is
reasonably likely to materially affect, the Trust’s internal control over
financial reporting.





7
 Table of Contents




PART
II.  OTHER INFORMATION





ITEM 1.  LEGAL
PROCEEDINGS





Monterey
received notice on December 1, 2005, from PG&E directing Monterey to
increase its operations from 13 hours, 5 days a week to 24 hours, 7 days a week.
However, PG&E had been operating or "dispatching" Monterey on a 13 by 5
basis for over 15 years.  Monterey determined that it could not
operate profitably on such a 24 by 7 schedule and was concerned that if it only
operated on a 13 by 5 basis, PG&E might refuse to pay for delivered
electricity. Monterey requested from PG&E to limit its operations to the 13
by 5 basis, but this request was denied. As a result, effective January 9, 2006,
Monterey ceased its operations. Monterey and PG&E have filed lawsuits
against the other for breach of contract. The Monterey project remains closed as
of the date of this filing.   Additionally, as a result of the
shutdown, the project has not delivered by-product steam since it was shutdown
in January 2006. As a result, it may be subject to penalties from the lessor.
Monterey filed a Complaint against PG&E in the San Francisco Superior Court
on May 16, 2006 (the “Monterey Complaint”).  The Monterey Complaint seeks
damages for breach of contract, damages for PG&E’s breach of the implied
covenant of good faith and fair dealing, and a claim for declaratory relief
against PG&E, seeking a judicial determination that PG&E’s conduct
materially breached the parties’ agreement and justified Monterey’s suspension
of performance. Monterey is seeking damages against PG&E estimated at
approximately $5 million.





On May
14, 2007, PG&E filed a Complaint in San Francisco Superior Court against
Monterey (the “PG&E Complaint”).  The PG&E Complaint arises out of
the same transactions and occurrences that gave rise to the Monterey Complaint
against PG&E.  PG&E asserted claims for compensatory damages for
breach of contract and breach of the implied covenant of good faith and fair
dealing as well as “restitution” of capacity payments made to Monterey on a
theory of unjust enrichment, and declaratory relief for repayment of capacity
payments made to the Monterey. PG&E was seeking restitution damages
against Monterey estimated at approximately $4.8 million.





The
claims made by PG&E have been made solely against Monterey and do not
involve any claims against the Trust. In March 2008, Monterey and PG&E
reached a tentative settlement of all claims against each other. The Managing
Shareholder cannot project the timing of this settlement, or if such a
settlement will occur because, among other things, such settlement is subject to
the approval of the California Public Utilities Commission; such approval was
requested by PG&E in July 2008.





On August
16, 2006, the Trust and several affiliated entities, including the Managing
Shareholder, filed lawsuits against the former independent registered
public accounting firm for the Trust and several affiliated entities, Perelson
Weiner, LLP (“Perelson Weiner”), in New Jersey Superior Court.  The suits
alleged professional malpractice and breach of contract in connection with audit
and accounting services performed for the Trust and other plaintiffs by Perelson
Weiner. On October 20, 2006, Perelson Weiner filed a counterclaim against the
Trust and other plaintiffs alleging breach of contract due to unpaid invoices
with a combined total of approximately $1.2 million. Discovery is ongoing and no
trial date has been set. The costs and expenses of the litigation are being paid
for by the Managing Shareholder and affiliated management companies and not the
underlying investment funds, including the Trust.




ITEM 1A.  RISK
FACTORS





There
have been no material changes to the risk factors disclosed in the
Trust's 2007 Form 10-K.





ITEM
2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS





None.





ITEM 3.  DEFAULTS
UPON SENIOR SECURITIES





None.





ITEM 4.  SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.





ITEM 5.  OTHER
INFORMATION





None.





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ITEM
6.  EXHIBITS




Exhibit No.
                
                Description31.1
                *
                Certification
      of Randall D. Holmes, Chief Executive Officer of the Registrant, pursuant
      to Securities Exchange Act Rule 13a-14(a).31.2
                *
                Certification
      of Jeffrey H. Strasberg, Chief Financial Officer of the Registrant,
      pursuant to Securities Exchange Act Rule 13a-14(a).32
                *
                Certifications
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      The Sarbanes-Oxley Act of 2002, signed by Randall D. Holmes, Chief
      Executive Officer of the Registrant, and Jeffrey H. Strasberg, Chief
      Financial Officer of the
Registrant.





*           Filed
herewith.













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 Table of Contents





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.






RIDGEWOOD
      ELECTRIC POWER TRUST IIDate: 
      November 3, 2008
                                        By:
                                        /s/ 
      Randall D. HolmesRandall
      D. HolmesPresident
      and Chief Executive Officer(Principal
      Executive Officer)Date: 
      November 3, 2008
                                        By:
                                        /s/ 
      Jeffrey H. StrasbergJeffrey
      H. StrasbergExecutive
      Vice President and Chief Financial Officer(Principal
      Financial and Accounting Officer)














10