<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                                        
                             Washington, D.C. 20549
                                        
                                    FORM 10-Q
                                        
                                   (Mark one)

X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
  ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996

                                       OR
                                        
_ TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE  SECURITIES
  EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM     TO

  Commission File Number 1-9208

                           NRG Generating (U.S.) Inc.
               (Exact name of Registrant as Specified in Charter)
                                        
             Delaware                            59-2076187
   (State or other jurisdiction               (I.R.S. Employer
         of incorporation)                   Identification No.)
                                ___________
                                        
                       1221 Nicollet Mall, Suite 610
                        Minneapolis, Minnesota 55403
             (Address of principal executive offices) (Zip Code)
                                        
    Registrant's telephone number, including area code: (612) 373-5300
                                        
      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

      APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                     DURING THE PRECEDING FIVE YEARS:
                                        
      Indicate  by  check  mark  whether the registrant  has  filed  all
documents and reports required to be filed by Sections 12, 13  or  15(d)
of the Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.  X  Yes      No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
                                        
      Indicate the number of shares outstanding of each of the  issuer's
classes  of  common stock as of the latest practicable  date:  6,440,762
shares  of  Common Stock, $0.01 par value per share, as of November  11,
1996.
   
<PAGE>
                           NRG GENERATING (U.S.) INC.
                                    FORM 10-Q
                               September 30, 1996
                                        
                                      INDEX
                                        
                                        
                                                                   Page
Part I - Financial Information:

     Item 1.  Financial Statements                                   2

     Consolidated Statements of Operations -
     Three months ended September 30, 1996 and September 30, 1995    2
          Consolidated Balance Sheets -
            September 30, 1996 and June 30, 1996                     3
          Consolidated Statements of Cash Flows -
     Three months ended September 30, 1996 and September 30, 1995    4
          Notes to Consolidated Financial Statements                 5

     Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations                    7


Part II - Other Information

     Item 1.  Legal Proceedings                                     13

     Item 6.  Exhibits and Reports on Form 8-K                      13

     Signature                                                      14

     Exhibit Index                                                  15

                                    1

<PAGE>
                                     PART 1

                              FINANCIAL INFORMATION
                                        
   Item 1.  FINANCIAL STATEMENTS

                           NRG GENERATING (U.S.) INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                  (Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                          September 30,     September 30,
                                                              1996              1995

<S>                                                   <C>               <C>              
REVENUES:                                                                                
 Energy.........................................        $        11,564   $        19,776
 Equipment, sales and services..................                  6,552             5,701
 Rental.........................................                    596               509
 Development fees and other.....................                    997               837
                                                                                         
   Total revenues...............................                 19,709            26,823
                                                                                         
COST OF SALES:                                                                           
 Energy.........................................                  4,155             9,886
 Equipment, sales and services..................                  5,222             5,072
 Rental.........................................                    462               337
 Development fees and other.....................                    981               777
                                                                                         
   Total cost of sales..........................                 10,820            16,072
                                                                                         
   Gross profit.................................                  8,889            10,751
                                                                                         
 Selling, general and                                                                    
  administrative expenses.......................                  2,281             2,391
                                                                                         
   Income from operations.......................                  6,608             8,360
                                                                                         
 Interest and other income......................                    167               333
 Reorganization costs...........................                      -            (1,176)
 Interest and debt expense......................                 (3,374)           (4,648)
                                                                                         
   Earnings before income taxes.................                  3,401             2,869
                                                                                         
PROVISION FOR INCOME TAXES......................                    238               298
                                                                                         
   Income before extraordinary item.............                  3,163             2,571
                                                                                         
Extraordinary item, net of income taxes.........                  1,643                 -
                                                                                         
   Net income...................................        $         4,806   $         2,571
                                                                                         
Net income per share............................        $          0.75   $          0.69
                                                                                         
                                                                                         
Weighted average shares outstanding.............                  6,422             3,712
</TABLE>


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

                                    2

<PAGE>
                           NRG GENERATING (U.S.) INC.
                           CONSOLIDATED BALANCE SHEETS
                    (Dollars in thousands, except share data)
<TABLE>
<CAPTION>
                                     ASSETS
                                                                     September 30,       June 30,
                                                                         1996              1996
                                                                      (Unaudited)            

<S>                                                              <C>                <C>           
Current assets:                                                                                   
  Cash and cash equivalents....................................    $        10,517    $      5,022
  Restricted cash and cash equivalents.........................              7,904           8,719
  Accounts receivable, net.....................................             14,315          11,627
  Receivables from related parties.............................                239             461
  Notes receivable, current....................................              1,033           1,029
  Inventories..................................................              2,003           2,995
  Other current assets.........................................              1,874           1,721
                                                                                                  
    Total current assets.......................................             37,885          31,574
                                                                                                  
Property, plant and equipment, net.............................            132,715         134,694
Equipment held for sale........................................              2,678           2,678
Project development costs......................................                253             253
Notes receivable, noncurrent...................................                 83              86
Investments in equity affiliates...............................              3,491           3,449
Deferred financing costs, net..................................              5,633           4,630
Other noncurrent assets........................................                959             798
                                                                                                  
    Total assets...............................................    $       183,697    $    178,162
</TABLE>

<TABLE>
<CAPTION>
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                              <C>                <C>           
Current liabilities:                                                                              
  Accounts payable.............................................    $         7,910    $      8,708
  Current portion of loans due NRG Energy, Inc.................                  -           4,750
  Current portion of recourse long-term debt...................             10,966           7,115
  Accrued interest payable.....................................              5,102           5,895
  Prepetition liabilities......................................              1,735           1,735
  Short-term borrowings........................................              2,458           1,793
  Other current liabilities....................................              7,189           7,789
                                                                                                  
    Total current liabilities..................................             35,360          37,785
                                                                                                  
Loans due NRG Energy, Inc., net of current portion.............             14,388          96,929
Recourse long-term debt, net of current portion................            152,338          66,789
Deferred income taxes..........................................             14,128          14,182
Other noncurrent liabilities...................................                 50              50
                                                                                                  
    Total liabilities..........................................            216,264         215,735
                                        
                                                                                                  
Stockholders' equity:                                                                             
  Preferred stock, par value $.01 per share, authorized                                           
    20,000,000 shares; none issued and outstanding.............                  -               -
  Common stock, par value $.01 per share, authorized                                              
    50,000,000 shares; issued 6,474,814 shares, and                                               
    outstanding 6,422,014 shares as of September 30, 1996                                         
    and June 30, 1996, respectively............................                 64              64
  Additional paid-in capital...................................             62,515          62,515
  Accumulated deficit..........................................            (94,561)        (99,367)
  Other........................................................               (585)           (785)
                                                                                                  
    Total stockholders' equity (deficit).......................            (32,567)        (37,573)
                                                                                                  
    Total liabilities and stockholders' equity (deficit).......    $       183,697    $    178,162
</TABLE>

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

                                    3

<PAGE>
                           NRG GENERATING (U.S.) INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                             (Dollars in thousands)
<TABLE>
<CAPTION>
                                                                             Three Months Ended             
                                                                      September 30,     September 30,
                                                                           1996              1995

<S>                                                               <C>               <C>              
Cash Flows from Operating Activities:                                                                
 Net income.....................................................    $         4,806   $         2,571
 Adjustments to reconcile net income to net                                                          
  cash provided by operating activities:                                                             
   Extraordinary item...........................................             (1,643)                -
   Depreciation and amortization................................              2,019             1,897
   Amortization of debt discount and deferred financing costs...                142               109
   Deferred tax (benefit) expense...............................                (54)              226
   Other, net...................................................               (822)             (635)
   Changes in operating assets and liabilities:                                                      
     Accounts receivable, net...................................             (2,688)           (4,958)
     Inventories................................................                992               (20)
     Receivables from related parties...........................                222              (426)
     Notes receivable, net......................................                 (1)                6
     Accounts payable...........................................               (922)           (2,089)
     Accrued interest payable...................................               (679)            4,056
       Net cash provided by operating activities................              1,372               737
                                                                                                     
Cash Flows from Investing Activities:                                                                
 Capital expenditures...........................................                (12)             (314)
 Withdrawals from restricted cash accounts, net.................                815             1,436
 Other, net.....................................................                  -              (361)
       Net cash provided by investing activities................                803               761
                                                                                                     
Cash Flows from Financing Activities:                                                                
 Proceeds from long-term debt...................................             95,000                 -
 Repayments of NRG Energy, Inc. loans...........................            (87,291)                -
 Repayments of recourse long-term debt..........................             (3,925)           (2,443)
 Net proceeds of short-term borrowings..........................                665               527
 Deferred financing costs.......................................             (1,129)                -
       Net cash provided by (used in) financing activities......              3,320            (1,916)
                                                                                                     
Net increase (decrease) in cash and cash equivalents............              5,495              (418)
Cash and cash equivalents, beginning of period..................              5,022             4,083
Cash and cash equivalents, end of period........................    $        10,517   $         3,665
</TABLE>



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

                                    4

<PAGE>
                                        
                           NRG GENERATING (U.S.) INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
                               SEPTEMBER 30, 1996
                             (Dollars in thousands)
                                        
1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    NRG  Generating (U.S.) Inc. and its subsidiaries (the  "Company"  or
"NRGG"),  formerly known as O'Brien Environmental Energy, Inc.  ("OEE"),
develop  and  own  cogeneration and waste-heat recovery  projects  which
produce  electricity  and  thermal energy for  sale  to  industrial  and
commercial  users  and  public utilities.   In  addition,  the  Company,
through its subsidiaries, sells and rents power generation, cogeneration
and standby/peak shaving equipment and services.

    Basis of Presentation

    The  consolidated financial statements include the accounts  of  the
Company  and all significant subsidiaries which are more than 50 percent
owned   and   controlled.   Intercompany  transactions  and   unrealized
intercompany  profits  and  losses on transactions  with  equity  method
investees  have been eliminated in consolidation.  Foreign  subsidiaries
with  periods  ending  on  June  30 are  included  in  the  consolidated
financial  statements.  If events occurred between June 30 and September
30  which  materially  affect  the consolidated  financial  position  or
results  of  operations,  they would be reflected  in  the  consolidated
financial statements.  Investments in less than majority-owned  entities
are  recorded  at  cost plus equity in their undistributed  earnings  or
losses since acquisition.

    The  accompanying  unaudited consolidated financial  statements  and
notes should be read in conjunction with the Company's  Report  on  Form
10-K for the year ended June 30, 1996. In the opinion of management, the
consolidated financial statements reflect all adjustments necessary  for
a  fair  presentation  of  the interim periods  presented.   Results  of
operations  for  an  interim period may not give a  true  indication  of
results for the year.

    Net Income Per Share

    Net  income  per share is calculated by dividing net income  by  the
weighted  average  shares of common stock and common  stock  equivalents
outstanding.   Fully  diluted  net income per  share  is  not  presented
because  conversion  of any common stock equivalents  does  not  have  a
material  dilutive effect on reported net income per share.  Net  income
per share has been restated for all periods presented to reflect the new
common shares issued on April 30, 1996 pursuant to the terms of the plan
of  reorganization (the "Plan") approved on January 18, 1996 by the U.S.
Bankruptcy Court for the District of New Jersey.

2.  RECOURSE LONG-TERM DEBT

    On  May  17,  1996,  the  Company's wholly-owned  subsidiaries,  NRG
Generating  (Newark) Cogeneration, Inc. ("Newark")  and  NRG  Generating
(Parlin) Cogeneration, Inc. ("Parlin")   entered into a Credit Agreement
(the  "Credit  Agreement")  with a new  lender.   The  Credit  Agreement
established  provisions for a $155,000 fifteen-year loan  and  a  $5,000
five-year debt service reserve line of credit.  The interest rate on the
outstanding  principal  is variable based on,  at  Newark  and  Parlin's
option, LIBOR plus a 1.125% margin or a defined base rate plus a  0.375%
margin.   Nominal  margin increases for both the LIBOR and  the  defined
base rate will occur in year six and eleven.  Concurrent with the Credit
Agreement,  Newark  and  Parlin  entered  into  an  interest  rate  swap
agreement with respect to

                                    5

<PAGE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
                               SEPTEMBER 30, 1996
                             (Dollars in thousands)

2.  RECOURSE LONG-TERM DEBT (Continued)

50%  of  the  principal amount outstanding under the  Credit  Agreement.
This  interest  rate swap agreement  fixes the interest rate  on 50%  of
the  principal amount outstanding at 6.9% plus the margin.  On July  11,
1996,  all  borrowings under the Credit Agreement  became  a  joint  and
several  liability  of  Newark and Parlin.   On  May  23,  1996,  Newark
borrowed  $60,000 in the form of a temporary six-month term  loan  under
the terms of the Credit Agreement.  The proceeds were used primarily  to
repay  certain  preexisting obligations of the Company.  Also  effective
May 23, 1996, NRG Energy, Inc. ("NRG Energy") guaranteed payment of pre-
existing  liabilities of Newark and Parlin up to $5,000.  The  guarantee
amount  of  $5,000  will  be reduced as certain defined  milestones  are
reached and eliminated no later than May 23, 2001.

    On July 11, 1996, an additional $95,000 was borrowed pursuant to the
Credit  Agreement  and combined with Newark's six-month  term  loan  and
converted  to a $155,000 fifteen-year term loan (the "Term Loan").   The
Term  Loan will be amortized as specified under the terms of the  Credit
Agreement.  Proceeds of the $95,000 borrowing were used to repay $53,388
advanced  by  NRG  Energy  on  June 28,  1996  in  connection  with  the
refinancing  of  certain  nonrecourse debt  of  Parlin  and  $33,903  of
outstanding indebtedness to NRG Energy.  The remaining balance was  used
for  various  obligations  of the Company as  well  as  funding  certain
restricted cash reserve accounts required to be maintained by Newark and
Parlin  under  the  terms  of  the Credit  Agreement.   Also,  effective
July 11, 1996, the Company guaranteed repayment of up to $25,000 of  the
Term  Loan  and payment of all income and franchise taxes of Newark  and
Parlin  as  they  come  due.  Collateral for the Term  Loan  includes  a
perfected first security interest on all assets of Newark and Parlin and
a pledge of all capital stock of Newark and Parlin.

3.  LOANS DUE NRG ENERGY, INC.

    Of the $95,000 received on July 11, 1996 under the Credit Agreement,
the  Company  used  $87,291  to repay loans  due  to  NRG  Energy.   The
September  30,  1996 loan balance of $14,388 due to  NRG  Energy  has  a
maturity date of April 30, 2001.
   
4.  EXTRAORDINARY ITEM

    During the quarter ended September 30, 1996, the Company  negotiated
a buyout of a subsidiary's capital lease obligation.  The  lender agreed
to accept a $1,100  payment  in  full satisfaction  of  the  lease.  The
transaction resulted in an extraordinary gain of $1,643 (net of $124  of
state income taxes).

5.  PROVISION FOR INCOME TAXES

    No  provision for federal income taxes has been recorded  since  the
Company has net federal operating loss carryforwards which have not been
recognized in prior periods.

                                    6

<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

    The information contained in this Item 2 updates, and should be read
in  conjunction with, the information set forth in Part II, Item  7,  of
the  Company's  Report on Form 10-K for the year ended  June  30,  1996.
Capitalized terms used in this Item 2 which are not defined herein  have
the  meaning  ascribed  to  such terms in the  Notes  to  the  Company's
financial  statements included in Part I, Item 1 of  this  Report.   All
dollar amounts set forth in this Item 2 are in thousands.

Overview

    NRG  Generating (U.S.) Inc. and its subsidiaries, formerly known  as
O'Brien  Environmental Energy, Inc., develop and  own  cogeneration  and
waste-heat  recovery  projects  which produce  electricity  and  thermal
energy for sale to industrial and commercial users and public utilities.
In  addition,  the Company, through its subsidiaries,  sells  and  rents
power  generation, cogeneration and standby/peak shaving  equipment  and
services.

    On April 30, 1996, OEE, the parent company, emerged from bankruptcy.
The  Plan, approved on January 18, 1996 by the U.S. Bankruptcy Court for
the  District of New Jersey, awarded NRG Energy the rights to acquire  a
41.86%  equity interest in the Company and generally provided  for  full
and  immediate  payment  of all undisputed prepetition  liabilities  and
included  a  provision  for  post-petition interest.   The  Company  was
renamed on the April 30, 1996 closing date to NRG Generating (U.S.) Inc.

    On  April  30,  1996,  NRG Energy funded approximately  $107,418  in
accordance  with the Plan and acquired a 41.86% equity interest  in  the
Company.  All common shares of OEE were canceled and replaced by  a  new
issue  of  common stock of NRGG.  Net income per share has been restated
for  all periods presented to reflect the new common shares issued under
the terms of the Plan.

    Additionally, under the terms of the Plan, NRG Energy  acquired  the
stock  of ten wholly-owned subsidiaries from the Company on the  closing
date  which  included all of the Company's landfill gas projects  (those
operating  and those in development), the general partner holding  a  3%
equity  interest in the Artesia Cogeneration partnership and  a  standby
power project.  The Company believes that the sale of these subsidiaries
will  not  have a material adverse effect on the results from operations
in future years.

    The  Company currently owns and operates two cogeneration facilities
with   an  electric  generating  capacity  of  174  megawatts  and   two
standby/peak shaving facilities with a capacity of 22 megawatts in which
the  Company  has an 83% interest.  On May 1, 1996, Newark and  Parlin's
amended  Power  Purchase Agreements ("PPAs") became  effective  and  the
quarter ended September 30, 1996, is the first full quarter which Parlin
and  Newark operated under these PPAs with Jersey Central Power &  Light
Company,  the  primary  customer  of  both  projects.   Although  energy
revenues  as  well  as the cost of energy revenues decreased  under  the
amended  PPAs,  management believes that operating gross profit  margins
will remain similar to historical results.  However, margin fluctuations
attributable to periodic swings in fuel costs have been eliminated.

                                    7

<PAGE>

    Equipment  sales, rentals and services is the Company's  demand-side
management  business  through which the Company provides  standby  power
equipment  and services to customers for a fee.  The Company is  also  a
one-third  partner  in  a 150 megawatt cogeneration  facility  currently
under construction.

    Both  the  Parlin and Newark Projects were previously  certified  as
qualifying   facilities  ("QFs")  by  the  Federal   Energy   Regulatory
Commission  ("FERC") under the Public Utilities Regulatory Policies  Act
of  1978.   The effect of QF status is generally to exempt  a  project's
owners  from  relevant provisions of the Federal Power Act,  the  Public
Utility  Holding  Company Act of 1935 ("PUHCA"), and state  utility-type
regulation.   However, as permitted under the terms of its  renegotiated
PPAs,  Parlin  has  chosen to file rates with FERC as a  public  utility
under  the  Federal  Power  Act.   The effect  of  this  filing  was  to
relinquish  Parlin's  claim to QF status.  FERC  has  approved  Parlin's
rates  effective  April 30, 1996, and given certain other  approvals  to
Parlin  in conjunction with the bankruptcy reorganization.  In addition,
FERC  has determined Parlin to be an exempt wholesale generator ("EWG").
As  an EWG, Parlin is exempt from PUHCA, and the ownership of Parlin  by
the  Company  does  not subject the Company to regulation  under  PUHCA.
Finally,  as a seller of power exclusively at wholesale, Parlin  is  not
generally  subject to state regulation and, in any case,  complies  with
all applicable requirements of state utility law.
     
    On  November  8,  1996, Power Operations, Inc., a  new  wholly-owned
subsidiary of the Company, assumed the operations and maintenance of the
Newark  facility, replacing Stewart and Stevenson Operations, Inc.   The
Company believes that there will be no material financial impact on  the
operations of the facility.

Revenues

    Energy  revenues for the quarters ended September 30, 1996 and  1995
were  $11,564  and  $19,776,  respectively.  Energy  revenues  primarily
reflect  billings  associated with the Newark  and  Parlin  cogeneration
projects,  the  Company's Philadelphia Water Department standby  project
and until April 30, 1996, the landfill gas facilities.  The decrease  in
energy  revenues in the quarter ended September 30, 1996 as compared  to
the  same period one year ago was primarily attributable to the  amended
PPAs  affecting both Newark and Parlin.  Additionally, a portion of  the
decrease  is  attributable  to the negative impact  of  unit  fuel  cost
fluctuations  on  the energy rate (price per megawatt hour)  calculation
under Parlin's previous PPA.

    Revenues  recognized  at  Parlin were $5,803  and  $10,813  for  the
quarters  ended  September  30,  1996 and  1995,  respectively.   Parlin
revenues  decreased in the quarter ended September 30, 1996 as  compared
to  the  same  period  one year ago primarily due to  the  amended  PPA.
Additionally, Parlin's fiscal 1996 revenues were affected by a  decrease
in  the energy rate under the previous PPA adjusted quarterly based  on,
in  part, the average cost of fuel over the preceding year.  A mild 1995
winter  resulted in unusually low natural gas costs which after  a  five
quarter lag lowered the energy rate received during fiscal 1996.

   Revenues recognized at the Newark facility were $4,708 and $7,550 for
the  quarters  ended  September 30, 1996 and  1995,  respectively.   The
decrease in revenues in the quarter ended September 30, 1996 as compared
to the same period one year ago is primarily attributable to the amended
PPA.

                                    8

<PAGE>

   Energy   revenues  from the Company's Philadelphia  Water  Department
standby  facility project for the quarters ended September 30, 1996  and
1995  were  $1,053 and $1,024, respectively.  Energy revenues  from  the
Company's  landfill  gas projects for the quarters ended  September  30,
1996  and  1995 were $0 and $389, respectively.  On April 30, 1996,  the
landfill  gas companies were sold to NRG Energy in accordance  with  the
Plan.

   Equipment sales and service revenues for the quarters ended September
30,  1996 and 1995 were $6,552 and $5,701, respectively, which primarily
reflects  the  operations of the Company's equipment sales and  services
operations;  O'Brien  Energy Services, O.B. Power  Plant  (UK  Holdings)
Limited  ("O.B.  Power  Plant") and American  Hydrotherm.   The  Company
attributes the revenue increase in the quarter ended September 30,  1996
from  the  comparable quarter one year ago primarily to its  O.B.  Power
Plant operation.

   O'Brien Energy Services equipment sales and services revenues for the
quarters  ended  September  30, 1996 and  1995  were  $922  and  $1,243,
respectively.   American  Hydrotherm revenues  for  the  quarters  ended
September  30,  1996  and  1995 were $1,238  and  $1,472,  respectively.
Equipment sales and services of O.B. Power Plant for the quarters  ended
September 30, 1996 and 1995 were $4,392 and $2,986, respectively.

   Rental   revenues for the quarters ended September 30, 1996 and  1995
were $596 and $509, respectively.

   Development  fees and other revenues were $997 and $837 for  quarters
ended  September  30,  1996  and 1995, respectively.   The  increase  in
revenues in the quarter ended September 30, 1996 as compared to the same
period  one year ago was attributable primarily to higher gas  sales  to
the Artesia Cogeneration partnership.

Costs and Expenses

   Cost  of  energy sales for the quarters ended September 30, 1996  and
1995 were $4,155 and $9,886, respectively.  The decrease in the cost  of
energy for the quarter ended September 30, 1996 as compared to the  same
period  one  year  ago was primarily the result of the amended  PPAs  in
which  Jersey Central Power & Light Company began assuming the  cost  of
fuel for the Newark and Parlin facilities.

   Cost of equipment sales and services for the quarters ended September
30,   1996   and  1995  were  $5,222  and  $5,072,  respectively.    The
fluctuations in cost of equipment sales and services between the quarter
ended  September 30, 1996 as compared to the same period  one  year  ago
primarily correlate to the changes in sales volume at O.B. Power Plant.

   Cost  of rental  sales for the quarters ended September 30, 1996  and
1995  were  $462  and  $337, respectively.   The  increase  in  cost  of
equipment rentals relates to the increase in the sales volume.

   Cost  of  development  fees and other  were $981  and  $777  for  the
quarters  ended September 30, 1996 and 1995, respectively.  These  costs
consist  principally  of  costs associated  with  the  sale  of  various
projects  either under development or in operation and costs  associated
with  a  gas  supply  management  agreement  with  the  California  Milk
Producers project.

                                    9

<PAGE>

    The  Company's gross margins were $8,889 (45% of sales) and  $10,751
(40%  of  sales)  for the quarters ended September 30,  1996  and  1995,
respectively.   The gross margin increase is primarily  attributable  to
the  Company's  energy  segment.  The gross margin  percentage  for  the
quarter ended September 30, 1995 was lower due to the lagging effect  of
how fuel costs were reflected in energy pricing in the prior PPAs.

Selling, General and Administrative Expenses

    Selling,  general  and  administrative  expenses  ("SG&A")  for  the
quarters  ended  September 30, 1996 and 1995  were  $2,281  and  $2,391,
respectively.   SG&A expenses benefited in the quarter  ended  September
30,  1996 as compared to the same period one year ago from lower payroll
and  related tax costs as well as reduced insurance expenses, accounting
and technical consulting fees.

Interest and Other Income

    Interest and other income for the quarters ended September 30,  1996
and  1995 was $167 and $333, respectively.  The decrease in other income
was  primarily  attributable to a one time gain of $214 in  the  quarter
ended  September  30,  1995 which is offset by an increase  in  interest
income earned on escrow account balances established in connection  with
the recourse financing on the Newark and Parlin facilities.

Reorganization Costs

    Reorganization costs represent all costs incurred after  filing  for
bankruptcy that relate to the Company's reorganization and restructuring
efforts.  Reorganization costs for the quarter ended September 30,  1995
were  $1,176.   These  costs  consist  primarily  of  professional   and
administrative fees and expenses.

Interest and Debt Expense

    Interest and debt expense for the quarters ended September 30,  1996
and  1995 were $3,374 and $4,648, respectively.  The decline in interest
and  debt  expense  is  due  primarily  to  post-petition  interest   on
prepetition  liabilities  included in the quarter  ended  September  30,
1995.   In addition, the average interest rate was lower in the  quarter
ended September 30, 1996 than in the comparable period one year ago  due
to the refinancing of the Newark and Parlin projects.

Extraordinary Income

    During the quarter ended September 30, 1996, the Company  negotiated
a buyout of a subsidiary's capital lease obligation.  The lender  agreed
to accept a $1,100  payment in  full satisfaction  of  the  lease.   The
transaction resulted in an extraordinary gain of $1,643 (net of $124  of
state income taxes).

                                   10

<PAGE>

Net Income Per Share

    Net  income  per share is calculated by dividing net income  by  the
weighted  average  shares of common stock and common  stock  equivalents
outstanding.   Fully  dilutive net income per  share  is  not  presented
because  conversion  of any common stock equivalents  does  not  have  a
material  dilutive  effect on reported net income per  share.   Weighted
average  shares increased significantly for the quarter ended  September
30,  1996 from the quarter ended September 30, 1995 primarily due to the
purchase of 2,710 common shares by NRG Energy on April 30, 1996.

Liquidity and Capital Resources

    On April 30, 1996, NRG Energy funded $107,418 in accordance with the
Plan.   The Company received $99,918 of which $71,240 was advanced under
the  terms of three loan agreements between the Company and NRG  Energy;
$21,178 represented the purchase of new common stock of NRGG and  $7,500
was  designated  as  the  proceeds for  the  sale  of  ten  wholly-owned
subsidiaries  sold  to NRG Energy.  In addition, NRG Energy  transferred
$7,500  directly  to the Company's stock transfer agent  representing  a
cash distribution by NRG Energy to the OEE common stockholders.

    In  May  1996,  the Company's wholly-owned subsidiaries  Newark  and
Parlin  entered into the Credit Agreement with a new lender.  The Credit
Agreement established provisions for a $155,000 fifteen-year loan and  a
$5,000 five-year debt service reserve line of credit.  The interest rate
on  the  outstanding principal is variable based on, at  the  option  of
Newark  and  Parlin, LIBOR plus a 1.125% margin or a defined  base  rate
plus  a  0.375% margin, with nominal margin increases in the  sixth  and
eleventh year.  Concurrent with the Credit Agreement, Newark and  Parlin
entered into an interest rate swap agreement with respect to 50% of  the
principal amount outstanding under the Credit Agreement.  This  interest
rate  swap agreement fixes the interest rate on the 50% portion  of  the
principal amount outstanding at 6.9% plus the margin.

    On  May  23 1996, Newark borrowed $60,000 in the form of a six-month
term  loan  under  the  terms  of  the  Credit  Agreement,  pending  the
availability of the remaining total loan commitment.  On July 11,  1996,
the remaining $95,000 loan commitment was borrowed and combined with the
$60,000 into a $155,000, fifteen year new term loan.

    The  Company used the proceeds of the new term loan to repay certain
preexisting obligations of the Company including $87,291 of indebtedness
to NRG Energy.  NRG Energy provided the Company with loans during fiscal
1996  of  which $101,679 was outstanding at June 30, 1996.  At  November
11, 1996, loans of $14,388 remain outstanding to NRG Energy.

    NRG  Energy has provided additional loan commitments to the Company.
A  $10,000  loan  agreement  negotiated  between  NRG  Energy  and  NRGG
Schuylkill  Cogeneration, Inc. (formerly known as  O'Brien  (Schuylkill)
Cogeneration,   Inc.)  ("NSC"),  a  wholly-owned  subsidiary,   provides
funding,  if needed, for an NSC capital contribution obligation  to  the
Grays  Ferry Partnership.  NSC owns a one-third partnership interest  in
the  Grays Ferry Cogeneration project currently under construction.   In
March  1996, the partnership entered into a credit agreement with  Chase
Manhattan  Bank  N.A.  to  finance the project.   The  credit  agreement
obligates  a  $10,000 capital contribution from each  of  the  projects'
three  partners prior to the commercial operation of the facility, which
is anticipated  to occur

                                   11

<PAGE>

by  the  end  of 1997.  In addition, there remains $13,615 in  available
borrowings under the terms of one of the Plan loan agreements to provide
funding for any bankruptcy obligation shortfalls.

    Except   for  the  historical  information  contained  within   this
Management's Discussion and Analysis of Financial Condition and  Results
of  Operations, the accompanying consolidated financial statements,  and
the Notes to Consolidated Financial Statements, the matters reflected or
discussed  in  this  quarterly  report which  relate  to  the  Company's
beliefs, expectations, plans, future estimates and the like are forward-
looking  statements that involve risks and uncertainties  including  but
not  limited to: business conditions and growth in the general  economy;
volatility in gross margins caused by seasonal factors that can  not  be
controlled by the Company; competitive factors, such as price pressures;
the   success  of  the  Company's  business  partners;  the   successful
construction  of  the  Grays Ferry project and other  factors  discussed
herein and in the sections of the Company's Report on  Form 10-K for the
year  ended  June  30,  1996 entitled "Item 1 -  Business  -  Liquidity:
Emergence  from  Chapter 11 Bankruptcy," "Item 1 -  Business  -  Capital
Requirements,"  and "Item 1 - Business - Energy Price  Fluctuations  and
Fuel  Supply."  Such factors may cause the Company's actual  results  to
differ  materially  from those discussed herein and  in  forward-looking
statements herein.

                                   12

<PAGE>
                                        
                                  PART II
                                        
                             OTHER INFORMATION
                                        
ITEM 1  Legal Proceedings

            In the Company's Report on Form 10-K for the year ended June
        30,   1996,   the  Company  reported  that  Calpine  Corporation
        ("Calpine") had filed claims against the Company in relation  to
        its  bankruptcy  case,   In re:  O'Brien  Environmental  Energy,
        Case  No.  94-26723, U.S. Bankruptcy Court for the  District  of
        New  Jersey, filed September 29, 1994.  Calpine, an unsuccessful
        bidder for the acquisition of OEE, had filed an application  for
        allowance   of   an   administrative  claim  for   approximately
        $4,500,000  in  break-up  fees and expenses  in  the  bankruptcy
        case.   On  November  8,  1996, the  Court  entered  an  Opinion
        denying  the  claim of Calpine in its entirety.  Once  an  Order
        has  been  entered denying Calpine's request, Calpine will  have
        ten  days  to appeal.  It is expected that an Order,  consistent
        with the Opinion, will be entered in the next few days.

ITEM 6  Exhibits and Reports on Form 8-K

   (a)  Exhibits

        The  "Index  to  Exhibits"  following  the  signature  page   is
        incorporated herein by reference.

   (b)  Reports on Form 8-K

        The  following Reports on Form 8-K were filed by the  registrant
        during the fiscal quarter ended September 30, 1996:

        1. Current Report  on Form 8-K dated August 22, 1996,  reporting
           information under Item 5.
     
        2. Current  Report  on  Form  8-K  dated  September  16,   1996,
           reporting  information under Item 5 and  including  financial
           statements for the fiscal year ended June 30, 1995.

                                   13

<PAGE>
                                        
                                SIGNATURE

      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 hereunto duly authorized.


                                       NRG GENERATING (U.S.), INC.
                                                Registrant

Date:  November 13, 1996           /s/ Timothy P. Hunstad
                                       Timothy P. Hunstad
                            Vice President and Chief Financial Officer
                                (Chief Financial Officer and Chief
                                          Accounting Officer)

                                   14

<PAGE>
                                        
                             INDEX TO EXHIBITS


2.1  Amended  and  Restated Stock Purchase and Reorganization  Agreement
     (including, without limitation, Exhibit A (Co-Investment  Agreement
     between NRG Energy and the Company dated April 30, 1996); Exhibit B
     (Chapter 11 Financing Agreement between NRG Energy and the  Company
     dated  August  30,  1996); Exhibit C (Liquidating Asset  Management
     Agreement   between  NRG  Generating  (U.S.),  Inc.   and   Wexford
     Management  Corp. dated April 30, 1996) and Exhibit  D  (Management
     Services  Agreement) dated as of January 31, 1996, by  and  between
     NRG  Energy, Inc. and O'Brien Environmental Energy, Inc.) filed  as
     Exhibit  10.1  to the Company's Current Report on  Form  8-K  dated
     February 13, 1996 and incorporated herein by this reference.

2.2  Order  Confirming  Composite Fourth Amended and  Restated  Plan  of
     Reorganization  for  O'Brien  Proposed  by  O'Brien,  the  Official
     Committee of Equity Security Holders, Wexford Management Corp., and
     NRG  Energy  dated February 13, 1996 and entered  on  February  22,
     1996,  and filed as Exhibit 2.1 to the Company's Current Report  on
     Form  8-K dated February 13, 1996 and incorporated herein  by  this
     reference.

2.3  Composite  Fourth  Amended and Restated Plan of Reorganization  for
     O'Brien  Environmental  Energy,  Inc.,  dated  January  31,   1996,
     proposed   by  O'Brien  Environmental  Energy,  Inc.  the  Official
     Committee of Equity Security Holders, Wexford Management Corp., and
     NRG Energy, Inc., and filed as Exhibit 2.2 to the Company's Current
     Report  on Form 8-K dated February 13, 1996 and incorporated herein
     by this reference.

3.1  Amended  and  Restated Certificate of Incorporation of the  Company
     filed  as  Exhibit 3.1 to the Company's Current Report on Form  8-K
     dated April 30, 1996 and incorporated herein by this reference.

3.2  Bylaws of the Company filed as Exhibit 3.2 to the Company's Current
     Report on Form 8-K dated April 30, 1996 and incorporated herein  by
     this reference.

3.3  Preferred Stock Certificate of Designation of the Company filed  as
     Exhibit 3.3 to the Company's Current Report on Form 8-K dated April
     30, 1996 and incorporated herein by this reference.

27   Financial Data Schedule.

                                   15