**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, 2006
 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, Delaware
            
            19801(Address
                of Principal Executive Offices)
            
            (Zip
                Code)





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


(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 oNo x





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





Large
      accelerated filer oAccelerated
      filer oNon-accelerated
      filer x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  Yes  o    No 
x





As
      of
      November 30, 2007, there were 235.3775 Investor Shares outstanding.















**RIDGEWOOD
      ELECTRIC POWER TRUST II**





**FORM
      10-Q**





**INDEX**







PagePART
                  I.
              FINANCIAL
                  INFORMATIONItem
                  1.
              Financial
                  Statements
              1Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition
                and
                  Results of Operations
              7Item
                  3.
              Quantitative
                  and Qualitative Disclosures About Market
                  Risk
              8Item
                  4.
              Controls
                  and Procedures
              9PART
                II.
              OTHER
                  INFORMATIONItem
                  1.
              Legal
                  Proceedings
              9Item
                  1A.
              Risk
                  Factors
              9Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of
                  Proceeds
              10Item
                  3.
              Defaults
                  Upon Senior Securities
              10Item
                  4.
              Submission
                  of Matters to a Vote of Security
                  Holders
              10Item
                  5.
              Other
                  Information
              10Item
                  6.
              Exhibits
              10SIGNATURES
              
              11










**PART
      I.   FINANCIAL INFORMATION**





**ITEM
      1.   FINANCIAL
      STATEMENTS**




**RIDGEWOOD
                ELECTRIC POWER TRUST II****CONDENSED
                CONSOLIDATED BALANCE SHEETS***(in
                thousands, except share data)*


September
                30,
              2006
            
            
            December
                31, 2005ASSETS
            
            (unaudited)Current
                assets:Cash
                and cash equivalents
            
            $
            342
            
            
            $
            196Accounts
                receivable
            
            
            213
            
            
            
            420Due
                from affiliates
            
            
            -
            
            
            
            1Gas
                forward contract
            
            
            -
            
            
            
            898Other
                current assets
            
            
            40
            
            
            
            39Total
                current assets
            
            
            595
            
            
            
            1,554Plant
                and equipment, net
            
            
            -
            
            
            
            1,132Intangibles,
                net
            
            
            -
            
            
            
            1,698Total
                assets
            
            $
            595
            
            
            $
            4,384LIABILITIES
                AND SHAREHOLDERS’ EQUITYCurrent
                liabilities:Accounts
                payable and accrued expenses
            
            $
            -
            
            
            $
            152Due
                to affiliates
            
            
            52
            
            
            
            354Total
                current liabilities
            
            
            52
            
            
            
            506Commitments
                and contingenciesShareholders’
                equity (deficit):Shareholders’
                equity (235.3775 Investor Shares issued
              and outstanding)
            
            
            739
            
            
            
            4,040Managing
                Shareholder’s accumulated deficit
              (1
                management share issued and outstanding)
            
            
            (196
            )
            
            
            (162Total
                shareholders’ equity
            
            
            543
            
            
            
            3,878Total
                liabilities and shareholders’ equity
            
            $
            595
            
            
            $
            4,384






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


1




**RIDGEWOOD
                ELECTRIC POWER TRUST II****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS***(unaudited,
                in thousands, except per share data)*




Nine
                Months Ended
              September
                30,
            
            
            Three
                Months Ended
              September
                30,2006
            
            
            2005
            
            
            2006
            
            
            2005Revenues
            
            $
            91
            
            
            $
            2,107
            
            
            $
            -
            
            
            $
            792Cost
                of revenues
            
            
            930
            
            
            
            1,250
            
            
            
            63
            
            
            
            89Gross
                (loss) profit
            
            
            (839
            )
            
            
            857
            
            
            
            (63
            )
            
            
            703Operating
                expenses:General
                and administrative expenses
            
            
            122
            
            
            
            106
            
            
            
            55
            
            
            
            34Impairment
                of plant, equipment and intangibles
            
            
            2,830
            
            
            
            -
            
            
            
            -
            
            
            
            -Management
                fee to the Managing Shareholder
            
            
            44
            
            
            
            54
            
            
            
            15
            
            
            
            18Total
                operating expenses
            
            
            2,996
            
            
            
            160
            
            
            
            70
            
            
            
            52(Loss)
                income from operations
            
            
            (3,835
            )
            
            
            697
            
            
            
            (133
            )
            
            
            651Other
                income:Gain
                on sale of investments
            
            
            500
            
            
            
            193
            
            
            
            166
            
            
            
            167Interest
                income
            
            
            -
            
            
            
            3
            
            
            
            -
            
            
            
            1Total
                other income
            
            
            500
            
            
            
            196
            
            
            
            166
            
            
            
            168Net
                (loss) income
            
            $
            (3,335
            )
            
            $
            893
            
            
            $
            33
            
            
            $
            819Managing
                Shareholder – Net (loss) income
            
            $
            (33
            )
            
            $
            9
            
            
            $
            -
            
            
            $
            8Managing
                Shareholder - Distributions
            
            
            -
            
            
            
            10
            
            
            
            -
            
            
            
            3Shareholders
                – Net (loss) income
            
            
            (3,302
            )
            
            
            884
            
            
            
            33
            
            
            
            811Net
                (loss) income per Investor Share
            
            
            (14,027
            )
            
            
            3,758
            
            
            
            139
            
            
            
            3,446Distributions
                per Investor Share
            
            
            -
            
            
            
            4,000
            
            
            
            -
            
            
            
            1,000











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




2




**RIDGEWOOD
                  ELECTRIC POWER TRUST IV****CONDENSED
                  CONSOLIDATED STATEMENTS OF CASH FLOWS***(unaudited,
                  in thousands)*Nine
                  Months Ended September 30,2006
              
              
              2005Cash
                  flows from operating activities:Net
                  cash provided by operating activities
              
              $
              146
              
              
              $
              297Cash
                  flows from investing activities:Proceeds
                  from investment in partnership transferredunder
                  contractual agreement
              
              
              -
              
              
              
              363Cash
                  flows from financing activities:Cash
                  distributions to shareholders
              
              
              -
              
              
              
              (952
              )Net
                  increase (decrease)  in cash and cash
                  equivalents
              
              
              146
              
              
              
              (292
              )Cash
                  and cash equivalents, beginning of period
              
              
              196
              
              
              
              430Cash
                  and cash equivalents, end of period
              
              $
              342
              
              
              $
              138








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






3




**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
        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, 2005 filed with the SEC on December 14, 2007 (the “2005 Form
        10-K”). No significant changes have been made to the Trust’s accounting policies
        and estimates disclosed in the 2005 Form 10-K.
 
 In
        the
        opinion of management, the condensed consolidated financial statements as
        of
        September 30, 2006, and for the nine and three-month periods ended September
        30,
        2006 and 2005, 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, 2006 and 2005
        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 on November 20, 1992 to primarily make investments
        in
        projects and businesses in the energy and infrastructure sectors. Ridgewood
        Renewable Power LLC (“RRP” or the “Managing Shareholder”), a New Jersey limited
        liability company, is the Managing Shareholder. As the Managing Shareholder,
        RRP
        has direct and exclusive control over the management and operations of the
        Trust.
 
 As
        of
        September 30, 2006, the Trust had one non-operating investment, located in
        California and 100% owned by the Trust (“Monterey”). The investment is a 5.5
        megawatt (“MW”) cogeneration project 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 continued to have contractual obligations through August 2006 related
        to its
        gas purchase agreement with Coral Energy Services, Inc. During the first
        quarter
        of 2006, the Trust recorded an asset impairment of Monterey’s net book value of
        its plant, equipment and intangibles. The Monterey project remains closed
        as of
        the date of this filing.
 
 The
        other
        operating investment of the Trust was a collection of irrigation service
        engines
        with a production capacity of 2MW (the “Pumping Project”), which was sold in
        January 2006 for $1. The sale of the Pumping Project did not impact the Trust’s
        results of operations in 2006, as the assets were previously fully impaired.
        Additionally, at September 30, 2006, the Trust had a long-term note receivable,
        which was paid in full on October 31, 2007. Upon the repayment of the
        Trust’s long term receivable in October 2007, the Trust no longer had any cash
        producing assets and may not in the future, subject to the resolution of
        litigation relating to the Monterey facility.
 
 **3.  
        RECENT ACCOUNTING PRONOUNCEMENTS**
  *FIN
        48*
 
 In
        June
        2006, the Financial Accounting Standards Board (“FASB”) issued FASB
        Interpretation No. 48, *Accounting for Uncertainty in Income Taxes* (“FIN
        48”) an interpretation of Statement of Financial Accounting Standards (“SFAS”)
        No. 109*, Accounting for Income Taxes*(“SFAS 109”). FIN 48 clarifies the
        accounting for uncertainty in income taxes recognized in an enterprise’s
        financial statements in accordance with SFAS 109 and prescribes a recognition
        threshold and measurement
        attribute for the financial statement recognition and measurement of a tax
        position taken or expected to be taken in a tax return. FIN 48 also provides
        guidance on derecognition, classification, interest and penalties, accounting
        in
        interim periods, disclosure and transition. FIN 48 will be effective for
        the
        Trust beginning January 1, 2007. The Trust does not believe that the adoption
        of
        FIN 48 will have a material impact on its consolidated financial
        statements.
  4
 **RIDGEWOOD
                  ELECTRIC POWER TRUST II****NOTES
                  TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***(unaudited,
                  dollar amounts in thousands)*
  *SFAS
        157*
  In
        September 2006, the FASB issued SFAS No. 157, *Fair Value Measurements*
        ("SFAS 157"), to define fair value, establish a framework for measuring fair
        value in accordance with generally accepted accounting principles (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. SFAS 157 will be effective for the Trust beginning
        January 1, 2008. The Trust is currently evaluating the impact of adopting
        SFAS
        157.
  *SAB
        108*
  In
        September 2006, the SEC issued Staff Accounting Bulletin No. 108,
*Considering the Effects of Prior Year Misstatements When Quantifying
        Misstatements in Current Year Financial Statements* ("SAB 108"). SAB 108
        requires analysis of misstatements using both an income statement (rollover)
        approach and a balance sheet (iron curtain) approach in assessing materiality
        and provides for a one-time cumulative effect transition adjustment. SAB
        108 is
        effective for fiscal years ending on or after November 15, 2006. The adoption
        of
        this standard did not have a material impact on the Trust's condensed
        consolidated financial statements.
 
 **4.  NOTES
        RECEIVABLE**
 
 In
        September 2002, the Trust sold its interests in Pittsfield Investors Limited
        Partnership and B-3 Limited Partnership to Energy Associates Corporation
        for
        $1.2 million in cash and $5 million of promissory notes. The notes bore interest
        at a rate of 10% per annum, and were to be repaid over a 17-year term. The
        recovery of interest and principal under the promissory notes issued in
        connection with the sale of the Trust’s interest were dependent upon the
        operations of the partnership investment transferred.
 
 Consequently,
        the Trust deferred its
        gain on the sale of its ownership interest until the carrying value of the
        investment was fully recovered. The cash proceeds received for the interest
        and
        principal were recorded as a reduction of its investment in partnership
        transferred under contractual agreement through June 30,
        2005.  Subsequent payments were recorded as a component of other
        income as collected. The note payments remained current until the notes were
        paid in full on October 31, 2007.
 
 **5.   IMPAIRMENT**
 
 On
        January 9, 2006, Monterey suspended
        its operations indefinitely.  As a result, the Trust recorded full
        impairments relating to its plant and equipment and intangibles of $1,132
        and
        $1,698, respectively.
 
 **6.   GAS
        CONTRACT**
 
 In
        August
        2001, Monterey entered into an agreement to purchase natural gas, at fixed
        prices, over a five-year term in connection with entering into an amendment
        fixing the sales price of electric power sales contracts for a similar term.
        The
        contract was entered into in order to minimize the impact of fluctuating
        energy
        prices. The Trust has determined that the contract is a derivative as defined
        under SFAS No. 133, "Accounting for Derivative Instruments and Hedging
        Activities", as amended. The Trust has designated the derivative as a non-hedge
        instrument. Accordingly, the value of the contract based on the differences
        between contract prices and market value prices is recognized as an asset
        or a
        liability in the balance sheet. Changes in the carrying value of the contract
        is
        reflected as a component of cost of revenues in the consolidated statements
        of
        operations. As of September 2006, the Trust has completed its contractual
        agreement to resell the purchased gas back to Monterey’s gas supplier and
        therefore, it no longer records any value on the balance sheets associated
        with
        this contract.
  5
  **RIDGEWOOD
                  ELECTRIC POWER TRUST II****NOTES
                  TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS***(unaudited,
                  dollar amounts in thousands)*
 
 **7.   COMMITMENTS
        AND CONTINGENCIES**
 
 Monterey
        has a non-cancelable operating lease which expires in May 2021. Future minimum
        lease payments as of December 31, 2006 are approximately $12 per annum along
        with the delivery of by-product steam.  In connection with the 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 from the lessor.
        The
        Trust considers the likelihood of any successful claim in this matter to
        be
        remote.
 
 For
        the
        first 15 years of operation, Pacific Gas and Electric Company (“PG&E”)
“dispatched” Monterey to produce and deliver electricity up to its contract
        capacity on a 13 hour per day, five day per week basis (“13x5”).  However,
        on December 1, 2005, PG&E dispatched Monterey on a 24 hour per day, seven
        day per week basis (“24x7”) for an indefinite period, effective January 1,
        2006. Monterey advised PG&E that its 24x7 dispatch order was a breach
        of the parties’ power purchase agreement.  Management of Monterey was also
        concerned that if the facility continued to produce and supply power consistent
        with the parties’ prior course of performance, PG&E would refuse to
        pay.  Accordingly, Monterey demanded that PG&E provide adequate
        assurances that it would continue to pay Monterey for its capacity and its
        electricity produced and delivered in accordance with the parties’ longstanding
        13x5 operations.  PG&E did not provide such assurances.  In the
        absence of such assurances, Monterey suspended operations on or about January
        9,
        2006.  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.  A Jury Trial with regard to this
        matter is currently set for February 8, 2008.
 
 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 is 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. Both of the above litigation matters
        are
        currently in discovery.  Monterey intends to vigorously prosecute its
        claims and defend against PG&E’s claims and believes it will ultimately
        prevail.
 
 On
        August
        16, 2006, the Managing Shareholder of the Trust and affiliates of the Trust,
        filed lawsuits against the former independent registered public accounting
        firm
        for the Trust, 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 by Perelson Weiner.
        On October 20, 2006, Perelson Weiner filed a counterclaim against the Trust,
        and
        its affiliates alleging breach of contract due to unpaid invoices. 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.
  6
 
 **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 at September 30, 2006 is intended to help readers analyze the
        accompanying financial statements, notes and other supplemental information
        contained in this document.  Results of operations for the nine and
        three-month periods ended September 30, 2006 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 financial statements, notes
        and
        other supplemental information included elsewhere in this report and Part
        II,
        Item 7. “Management’s Discussion and Analysis of Financial Condition and Results
        of Operations” of the Trust’s 2005 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 litigation described in Item 3. "Legal Proceedings” of
        the Trust’s 2005 Form 10-K, 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 Part I,
        Item 1A. “Risk Factors” and Part II, Item 7. “Management’s
        Discussion and Analysis of Financial Condition and Results of Operations”, of
        the 2005 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 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 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 2005 Form
        10-K.
 
 **Results
        of Operations and Changes in Financial Condition**
 
 *Nine
        months ended September 30, 2006 compared to the nine months ended September
        30,
        2005*
 
 Total
        revenues decreased $2 million, or 95.7%, to $0.1 million in the first nine
        months of 2006 as compared to $2.1 million for the same period in 2005. This
        decrease was due to the closing of Monterey’s operations and sale of the Pumping
        Project in January 2006. Revenues for the first nine months of 2006 are
        Monterey’s revenues prior to suspension of its operations.
 
 Cost
        of
        revenues decreased approximately $0.4 million, or 25.6%, to $0.9 million
        in the
        first nine months of 2006, as compared to $1.3 million for the same period
        in
        2005. This increase was primarily attributable to reduced revenues offset
        by a
        decrease in natural gas prices during the first quarter of 2006, which has
        the
        effect of increasing cost of revenues due to recording declines in market
        value
        of the Trust’s gas forward contract.
  7
  Gross
        loss was $0.8 million for the first nine months of 2006 as compared to gross
        profit of $0.9 million for the same period in 2005. This decrease of $1.7
        million was primarily due to decreased revenue and from declines in natural
        gas
        prices.
 
 During
        the first quarter of 2006, the Trust recorded a $2.8 million impairment of
        plant
        and equipment and its intangible assets, as a result of closing the Monterey
        operations.
 
 The
        Trust
        recorded a gain on sale of investments of $0.5 million from collection of
        its
        notes receivable during the first nine months of 2006. Cash receipts from
        the
        notes receivable for a portion of 2005 reduced the carrying value of the
        notes
        with no gain recognized for that portion.
 
 Total
        assets of $0.6 million at September 30, 2006 decreased $3.8 million from
        $4.4
        million at December 31, 2005. This decrease was primarily due to the shutdown
        and impairment of Monterey and purchases under the gas forward contract.
        Total
        liabilities decreased $0.4 million from $0.5 million at December 31, 2005
        to
        $0.1 million at September 30, 2006, primarily due to affiliated repayments
        of
        $0.3 million and reduced accruals of $0.1 million.
 
 *Three
        months ended September 30, 2006 compared to the three months ended September
        30,
        2005*
 
 Total
        revenues decreased $0.8 million from the third quarter of 2005, from $0.8
        million for the three months ended September 30, 2005.  There were no
        revenues in the third quarter of 2006 due to the closing of Monterey’s
        operations and sale of the Pumping Project in January 2006.
 
 Gross
        loss of $63,000 for the third quarter of 2006 as compared to gross profit
        of
        $0.7 million for the same period in 2005 was primarily due to a decline in
        revenues.
 .
 **Liquidity
        and Capital Resources**
 
 *Nine
        months ended September 30, 2006 compared to the nine months ended September
        30,
        2005*
 
 At
        September 30, 2006, the Trust had cash and cash equivalents of $0.3 million
        as
        compared to $0.2 million at December 31, 2005. The increase of $0.1 million
        was
        the result of cash provided by operating activities.
  Cash
        provided by investing activities for the nine months ended September 30,
        2005
        was $0.4 million attributable to payments received from notes receivable.
        For
        the 2006 period, these cash receipts were classified as an operating
        activity.
 
 There
        was
        no cash used in financing activities for the first nine months of 2006 and
        $1
        million was used for the first nine months of 2005.  The 2005 amount
        represents amounts distributed to shareholders.
 
 **Future
        Liquidity and Capital Resource Requirements**
 
 The
        Trust
        expects cash flows from operating activities to be significantly less in
        the
        future periods than in the previous periods since the operation of Monterey
        has
        ceased.
 
 **Off-Balance
        Sheet Arrangements and Contractual Obligations and
        Commitments**
 
 During
        the quarter, the Trust completed its obligations under its gas supply contract.
        The associated letter of credit expired upon completion of these obligations.
        There have been no other changes from the disclosures in the Trust's 2005
        Form
        10-K.
  **ITEM
        3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES
        ABOUT MARKET RISK**
  The
        disclosure required by this Item is
        omitted pursuant to Item 305(e) of Regulation S-K.
 
 8
  **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. A system of disclosure controls and procedures is designed
        to
        ensure thatinformation required to be disclosed by a registrant in reports
        filed
        with the Exchange Act are recorded, processed, summarized and reported within
        the time periods specified in the applicable rules and forms.  This
        includes disclosure controls and procedures designed to ensure 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.
        A review of these controls and procedures was done by the Trust as of September
        30, 2006, which revealed that the following material weaknesses previously
        identified continue to exist:
  (i)
              a
                  lack of sufficient personnel with relevant experience to develop,
                  administer and monitor disclosure controls and procedures to enable
                  the
                  Trust to comply efficiently, or on a timely basis, with its financial
                  reporting obligations,
  (ii)
              inadequate
                  disclosure controls and procedures, including inadequate record
                  retention
                  and review policies that would enable the Trust to meet its financial
                  reporting and disclosure obligations in an efficient and timely
                  manner.
  As
        a
        result of these weaknesses, the Trust has not timely met its reporting
        obligations under the Exchange Act.
  During
        the quarter ended September 30, 2006, the Trust engaged a national accounting
        firm to supply accounting personnel to assist while personnel hiring is
        underway. The work performed by the firm is under the direct supervision
        of the
        Trust’s Chief Financial Officer and Controller. Except as noted above, 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, 2006 that has materially affected,
        or is
        reasonably likely to materially affect, the Trust’s internal control over
        financial reporting.
  Since
        the
        review, the Trust has implemented the following changes in internal control
        over
        financial reporting:
  ·
              Increased
                  the number of degreed accountants. Additional staff expansion is
                  underway.
  ·
              In
                  May 2007, the Trust appointed a new Chief Financial Officer who
                  is a
                  Certified Public Accountant with approximately 29 years of professional
                  accounting experience, including prior experiences as a financial
                  officer
                  of publicly traded companies.
  The
        Trust
        believes that the completion of the expansion of the accounting and financial
        reporting staff and implementation of recommended procedures will mitigate
        the
        above weaknesses. However, due to the Trust’s delinquencies in meeting its
        filing deadlines under the Exchange Act, the Trust expects these deficiencies
        to
        continue to be material weaknesses at least until such time as the Trust
        is no
        longer delinquent in its Exchange Act filings.
  The
        Trust’s Chief Executive Officer and Chief Financial Officer have evaluated the
        effectiveness of the Trust’s disclosure controls and procedures as of the end of
        the period covered by this report pursuant to Rule 13a-15(b) under the Exchange
        Act and concluded that, as of the end of the period covered by this report,
        because of the material weaknesses noted above, the Trust’s disclosure controls
        and procedures were not effective.
  **PART
        II.   OTHER INFORMATION**
  **ITEM
        1.   LEGAL
        PROCEEDINGS**
 
 There
        have been no material changes to the legal proceedings disclosed in the 2005
        Form 10-K.
  **ITEM
        1A.   RISK FACTORS**
 
 For
        information regarding factors that could affect the Trust’s results of
        operations, financial condition and liquidity, see the risk factors discussed
        under “Risk Factors”  in Item 1A of the 2005 Form
        10-K.  There have been no material changes from the risk factors
        previously disclosed in such Form 10-K.
  9
  **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.
 
 **ITEM
        6.   EXHIBITS**
  31.1
              *
              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.
  
 10
 
 **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 II**Date: 
                  December 20, 2007
              By:
              /s/ 
                  Randall D. HolmesRandall
                  D. HolmesChief
                  Executive Officer(Principal
                  Executive Officer)
   Date: 
                  December 20, 2007
              By:
              /s/ 
                  Jeffrey H. StrasbergJeffrey
                  H. StrasbergExecutive
                  Vice President and
                Chief
                  Financial Officer(Principal
                  Financial and Accounting Officer)
 
   11