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, 2007


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 x No o





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 o                                                                              Accelerated
filer o                                                                  Non-accelerated
filer x





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





As of
December 31, 2007, 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
            7Item 3.
            Quantitative and Qualitative Disclosures About Market
      Risk
            8Item 4.
            Controls and Procedures
            8PART
      II.
            OTHER
      INFORMATIONItem 1.
            Legal Proceedings
            9Item 1A.
            Risk Factors
            9Item 2.
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            9Item 3.
            Defaults Upon Senior Securities
            9Item 4.
            Submission of Matters to a Vote of Security
      Holders
            9Item 5.
            Other Information
            9Item 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
      31,2007
            
            
            2006(unaudited)ASSETSCurrent
      assets:Cash
      and cash equivalents
            
            $
            407
            
            
            $
            395Accounts
      receivable
            
            
            -
            
            
            
            118Due
      from affiliates
            
            
            -
            
            
            
            21Other
      current assets
            
            
            54
            
            
            
            29Total
      assets
            
            $
            461
            
            
            $
            563LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable and accrued expenses
            
            $
            22
            
            
            $
            8Due
      to affiliates
            
            
            29
            
            
            
            -Total
      current liabilities
            
            
            51
            
            
            
            8Commitments
      and contingenciesShareholders’
      equity (deficit):Shareholders’
      equity (235.3775 Investor Shares issued andoutstanding)
            
            
            607
            
            
            
            751Managing
      shareholder’s accumulated deficit(1
      management share issued and outstanding)
            
            
            (197
            )
            
            
            (196
            )Total shareholders’ equity
            
            
            410
            
            
            
            555Total liabilities and shareholders’ equity
            
            $
            461
            
            
            $
            563








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 30,2007
              
              
              2006
              
              
              2007
              
              
              2006Revenues
              
              $
              -
              
              
              $
              91
              
              
              $
              -
              
              
              $
              -Cost
      of revenues
              
              
              242
              
              
              
              930
              
              
              
              81
              
              
              
              63Gross
      loss
              
              
              (242
              )
              
              
              (839
              )
              
              
              (81
              )
              
              
              (63
              )Operating
      expenses:General
      and administrative expenses
              
              
              405
              
              
              
              122
              
              
              
              150
              
              
              
              55Impairment
      of plant, equipment and intangibles
              
              
              -
              
              
              
              2,830
              
              
              
              -
              
              
              
              -Management
      fee to the Managing Shareholder
              
              
              6
              
              
              
              44
              
              
              
              2
              
              
              
              15Total
      operating expenses
              
              
              411
              
              
              
              2,996
              
              
              
              152
              
              
              
              70Loss
      from operations
              
              
              (653
              )
              
              
              (3,835
              )
              
              
              (233
              )
              
              
              (133
              )Other
      income:Gain
      on sale of investment
              
              
              502
              
              
              
              500
              
              
              
              168
              
              
              
              166Net
      (loss) income
              
              $
              (151
              )
              
              $
              (3,335
              )
              
              $
              (65
              )
              
              $
              33Managing
      Shareholder - Net (loss) income
              
              $
              (1
              )
              
              $
              (33
              )
              
              $
              -
              
              
              $
              -Shareholders
      - Net (loss) income
              
              
              (150
              )
              
              
              (3,302
              )
              
              
              (65
              )
              
              
              33Net
      (loss) income per Investor Share
              
              
              (637
              )
              
              
              (14,027
              )
              
              
              (276
              )
              
              
              139








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 30,2007
              
              
              2006Cash
      flows from operating activities:Net
      cash provided by operating activities
              
              $
              12
              
              
              $
              146Cash
      and cash equivalents, beginning of period
              
              
              395
              
              
              
              196Cash
      and cash equivalents, end of period
              
              $
              407
              
              
              $
              342


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 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, 2006 filed with the SEC on January 25, 2008 (the “2006 Form
10-K”). No significant changes have been made to the Trust’s accounting policies
and estimates disclosed in its 2006 Form 10-K.





In the
opinion of management, the condensed consolidated financial statements as of
September 30, 2007, and for the nine and three month periods ended September 30,
2007 and 2006, 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, 2007 and 2006
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. The Trust began offering shares
on January 4, 1993 and concluded its offering on January 31, 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. Ridgewood
Renewable Power LLC (“RRP” or the “Managing Shareholder”), a New Jersey limited
liability company, is the Managing Shareholder. The Trust has been organized to
invest primarily in power generation facilities located in the US. The projects
of the Trust have characteristics that qualify the projects for government
incentives.





As of
September 30, 2007, 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 only 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 Services Energy, Inc. and on-going
ground lease expenses. 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.





At
September 30, 2007, the Trust had long-term notes receivable, which were paid in
full, in advance of their due dates, on October 31, 2007. Upon the
repayment of the Trust’s long-term receivables in October 2007, the Trust no
longer had any cash producing assets in operation 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 FASB 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. The Trust adopted FIN 48 effective January
1, 2007, with no material impact on its condensed consolidated financial
statements.




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 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 become effective for the Trust
beginning January 1, 2008. The Trust is currently evaluating the impact of
adopting SFAS 157 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)


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. SFAS 159 will become effective for the Trust beginning
January 1, 2008. The Trust is currently evaluating the impact of adopting SFAS
159 on its condensed consolidated financial statements.





SFAS
160





In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements — an amendment of ARB No. 51
(“SFAS 160”).  SFAS 160 requires that ownership interests in
subsidiaries held by parties other than the parent, and the amount of
consolidated net income, be clearly identified, labeled, and presented in the
consolidated financial statements within
equity, but separate from the parent’s equity.It also requires once a
subsidiary is deconsolidated, any retained noncontrolling equity investment in
the former subsidiary be initially measured at fair value. Sufficient
disclosures are required to clearly identify and distinguish between the
interests of the parent and the interests of the noncontrolling owners. SFAS 160
will become effective for the Trust beginning January 1, 2009. The Trust is
currently evaluating the impact of adopting SFAS 160 on its condensed
consolidated financial statements.





4.   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.





5.   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 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 was recognized as an asset or a
liability in the condensed consolidated balance sheet. Changes in the carrying
value of the contract were reflected as a component of cost of revenues in the
condensed consolidated statements of operations. During the third quarter of
2006, the Trust completed its contractual agreement to resell the purchased gas
back to the gas supplier.





6.   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 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 claims by the lessor; however, as
of the date of this filing none have been asserted.





Monterey
received notice on December 1, 2005 from Pacific Gas & Electric
(“PG&E”), its sole customer, 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. Since the closing of the Monterey facility, 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 Services
Energy, Inc. 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.  The date for a Jury Trial with
regard to this matter has not been set.





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.


5
 Table of Contents
 RIDGEWOOD
ELECTRIC POWER TRUST II
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited,
dollar amounts in thousands)





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.





On
August 16, 2006, the Managing Shareholder 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.





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 financial statements.





7.   SUBSEQUENT
EVENT





On
October 31, 2007, the Trust’s notes receivable were fully repaid in advance of
their due dates. The amount received, including prepayment penalties, totaled
$5,042. As these notes had no recorded accounting value, the amount received was
recorded as other income during the fourth quarter of 2007.











6
 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, 2007 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 month periods ended September 30, 2007
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 2006 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 2006 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, Item 1A. “Risk
Factors” and Item 7. “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”, of the Trust's 2006 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 2006 Form
10-K.





Results
of Operations and Changes in Financial Condition





Nine
months ended September 30, 2007 compared to the nine months ended September 30,
2006





There
were no revenues in the nine months ended September 30, 2007 compared to $0.1
million for the same period in 2006. During the nine months ended September 30,
2007, there were no revenues due to the shutdown of Monterey’s operations,
pending ongoing litigation, which occurred in January 2006.





Cost of
revenues decreased $0.7 million, or 74.0%, to $0.2 million in the nine months
ended September 30, 2007, as compared to $0.9 million for the same period in
2006 as cost of revenues in 2006 was primarily due to the gas contract, which
expired in August 2006. Cost of revenues for the nine months ended September 30,
2007 primarily includes certain fixed expenses for the maintenance of the
Monterey operations.





Gross
loss decreased $0.6 million in the nine months ended September 30, 2007 to a
gross loss of $0.2 million from a gross loss of $0.8 million for the nine months
ended September 30, 2006 primarily due to the 2007 period not having the gas
contract that expired during August 2006.





During
the first quarter of 2006, the Trust recorded a $2.8 million impairment of its
plant, equipment and intangible assets, due to the shutdown of Monterey’s
operations.





General
and administrative expenses increased $0.3 million, to $0.4 million in the nine
months ended September 30, 2007, as compared to $0.1 million for the same period
in 2006.  This was primarily due to increased legal fees related to the
Monterey litigation.





Total
assets were $0.5 million at September 30, 2007, a decrease of $0.1 million
compared to the total assets balance of $0.6 million at December 31, 2006. Total
liabilities at September 30, 2007 increased by $43,000 from December 31, 2006 to
$51,000, due to an increase in accounts payable and accrued expenses and amounts
due to affiliates.


7
 Table of Contents





Three
months ended September 30, 2007 compared to the three months ended September 30,
2006





There
were no revenues during the three months ended September 30, 2007 or 2006 due to
the shutdown of Monterey’s operations.





General
and administrative expenses increased $95,000, to $150,000 in the three months
ended September 30, 2007, as compared to $55,000 for the same period in 2006.
 This was primarily due to increased legal fees related to the Monterey
litigation.





Liquidity
and Capital Resources





Nine
months ended September 30, 2007 compared to the nine months ended September 30,
2006





At
September 30, 2007, the Trust had cash and cash equivalents of $0.4 million,
which is comparable to the balance at December 31, 2006.




Cash
provided by operating activities for the nine months ended September 30, 2007
was $12,000 as compared to $0.1 million for the same period in 2006. The
decrease in cash flow of $0.1 million was primarily due to cash flows from gas
contracts that expired in 2006 that did not recur in 2007.





There
were no cash flows from either investing or financing activities during the nine
months ended September 30, 2007 and 2006.





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 operations of Monterey
have ceased. The Trust believes sufficient cash and cash equivalents will be
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 2006
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.





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 that information 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, 2007, 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.





Since the
review, the Trust has implemented the following to address the above
weaknesses:





·
            During
      the fourth quarter of 2007, the Trust expanded its disclosure controls and
      procedures. The Trust documented many of its existing informal procedures,
      established a compliance-focused disclosure committee, formalized monthly
      closing procedures, and implemented a corporate whistleblower
      policy.


8
 Table of Contents





The Trust
believes that the completion of the expansion of the accounting and financial
reporting staff and the implementation of the above 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 able
to make its Exchange Act filings on a timely basis.




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.




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, 2007 that has materially affected, or is
reasonably likely to materially affect, the Trust’s internal control over
financial reporting.





PART
II.   OTHER INFORMATION




ITEM 1.     LEGAL PROCEEDINGS





There
have been no material changes to the legal proceedings disclosed in the
Trust's 2006 Form 10-K.




ITEM 1A.  RISK FACTORS





There
have been no material changes to the risk factors previously disclosed in the
Trust's 2006 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.








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.




9
 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: 
      February 14, 2008
            By:
            /s/ 
      Randall D. HolmesRandall
      D. HolmesChief
      Executive Officer(Principal
      Executive Officer)






Date: 
      February 14, 2008
            By:
            /s/ 
      Jeffrey H. StrasbergJeffrey
      H. StrasbergExecutive
      Vice President andChief
      Financial Officer(Principal
      Financial and Accounting Officer)









10