<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549
   
                                 FORM 10-Q/A
                               AMENDMENT NO. 1
    
                               --------------

                                  (Mark one)

  X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 ---   SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
       JUNE 30, 1998

                                      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

                     COGENERATION CORPORATION OF AMERICA
              (Exact name of Registrant as Specified in Charter)


              DELAWARE                               59-2076187
    (State or other jurisdiction                  (I.R.S. Employer
         of incorporation)                      Identification No.)

                               --------------

                         ONE CARLSON PARKWAY, SUITE 240
                       MINNEAPOLIS, MINNESOTA 55447-4454
              (Address of principal executive offices) (Zip Code)

      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (612) 745-7900

     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.    X    Yes          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: 6,836,769 shares
of Common Stock, $0.01 par value per share, as of August 10, 1998.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


<PAGE>

   
     The Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998 is hereby amended and restated in its entirety by this
Amendment No. 1 on Form 10-Q/A ("Amendment No. 1"). The purpose of this
Amendment No. 1 is to add Note 4 "INVESTMENT IN GRAYS FERRY" to the Notes to
Consolidated Financial Statements.
    
   
                     COGENERATION CORPORATION OF AMERICA
                                 FORM 10-Q/A
                                JUNE 30, 1998
    
                                    INDEX

<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>                                                                       <C>
PART I - FINANCIAL INFORMATION:

  Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . . .    3

          Consolidated Balance Sheets -
            June 30, 1998 and December 31, 1997. . . . . . . . . . . . .    3
          Consolidated Statements of Operations -
            Three months and six months ended June 30, 1998 and
            June 30, 1997. . . . . . . . . . . . . . . . . . . . . . . .    4
          Consolidated Statements of Cash Flows -
            Six months ended June 30, 1998 and June 30, 1997 . . . . . .    5
          Notes to Consolidated Financial Statements . . . . . . . . . .    6

  Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations. . . . . . . . . . . . . .   10

PART II - OTHER INFORMATION

  Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . .   19

  Item 3. Default Upon Senior Securities . . . . . . . . . . . . . . . .   21

  Item 4. Submission of Matters to a Vote of Security Holders. . . . . .   22

  Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . .   22

  Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23

  Index to Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . .   24
</TABLE>


                                      2

<PAGE>

                                    PART 1
                            FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
                     COGENERATION CORPORATION OF AMERICA
                         CONSOLIDATED BALANCE SHEETS
                            (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                    ASSETS
                                                                    JUNE 30,    DECEMBER 31,
                                                                      1998          1997
                                                                  -----------   -----------
                                                                  (UNAUDITED)    
<S>                                                               <C>           <C>
Current assets:
  Cash and cash equivalents....................................    $   5,114     $   3,444
  Restricted cash and cash equivalents.........................        9,278         8,527
  Accounts receivable, net.....................................        9,881        11,099
  Receivables from related parties.............................          245            87
  Notes receivable, current....................................            3            27
  Inventories..................................................        2,439         2,134
  Other current assets.........................................        1,229         1,022
                                                                   ---------     ---------
    Total current assets.......................................       28,189        26,340

Property, plant and equipment, net.............................      124,063       127,574
Property under construction....................................       80,847        46,247
Project development costs......................................          129           129
Investments in equity affiliates...............................       16,022        13,381
Deferred financing costs, net..................................        5,389         5,643
Deferred tax assets, net.......................................        7,996         7,996
Other assets...................................................          543           584
                                                                   ---------     ---------
    Total assets...............................................    $ 263,178     $ 227,894
                                                                   ---------     ---------
                                                                   ---------     ---------

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 Current liabilities:
  Current portion of loans and payables due NRG Energy, Inc....    $   1,596     $   2,864
  Current portion of nonrecourse long-term debt................        9,068         8,525
  Current portion of recourse long-term debt...................          415           495
  Short-term borrowings........................................        1,524         1,313
  Accounts payable.............................................       16,713        20,582
  Prepetition liabilities......................................          789           775
  Other current liabilities....................................        2,681         3,083
                                                                   ---------     ---------
    Total current liabilities..................................       32,786        37,637

Loans due NRG Energy, Inc......................................        4,439         4,439
Nonrecourse long-term debt.....................................      201,077       165,020
Recourse long-term debt........................................       25,000        25,000
                                                                   ---------     ---------
    Total liabilities..........................................      263,302       232,096
                                                                   ---------     ---------
Stockholders' equity (deficit):                                                  
  Preferred stock, par value $.01, 20,000,000 shares                             
    authorized; none issued or outstanding.....................            -             -
  New common stock, par value $.01, 50,000,000 shares                            
    authorized, 6,871,069 shares issued,                                         
    6,836,769 shares outstanding as of                                           
    June 30, 1998 and December 31, 1997, respectively..........           68            68
  Additional paid-in capital...................................       65,715        65,715
  Accumulated deficit..........................................      (65,540)      (69,592)
  Accumulated other comprehensive income (loss)................         (367)         (393)
                                                                   ---------     ---------
    Total stockholders' equity (deficit).......................         (124)       (4,202)
                                                                   ---------     ---------
    Total liabilities and stockholders' equity (deficit).......    $ 263,178     $ 227,894
                                                                   ---------     ---------
                                                                   ---------     ---------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

                                      3
<PAGE>

                     COGENERATION CORPORATION OF AMERICA
              CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED        SIX MONTHS ENDED
                                          --------------------     --------------------
                                          JUNE 30,    JUNE 30,     JUNE 30,    JUNE 30,
                                            1998        1997         1998        1997
                                          --------    --------     --------    --------
<S>                                       <C>         <C>          <C>         <C>
REVENUES:
 Energy revenues.......................   $ 10,518    $  9,002     $ 21,801    $ 21,393
 Equipment sales and services..........      2,863       4,586        8,334       9,192
 Rental revenues.......................        606         467        1,481         927
                                          --------    --------     --------    --------
                                            13,987      14,055       31,616      31,512

COST OF REVENUES:
 Cost of energy revenues...............      4,187       4,072        7,700       7,232
 Cost of equipment sales and services..      2,729       3,662        7,468       7,561
 Cost of rental revenues...............        524         440        1,174         823
                                          --------    --------     --------    --------
                                             7,440       8,174       16,342      15,616

   Gross profit........................      6,547       5,881       15,274      15,896

 Selling, general and
  administrative expenses..............      2,429       1,663        4,536       3,916
                                          --------    --------     --------    --------
   Income from operations..............      4,118       4,218       10,738      11,980
                                          --------    --------     --------    --------
 Interest and other income.............        251         227          469         389
 Equity in earnings of affiliates......      1,639           4        2,646          43
 Interest and debt expense.............     (3,486)     (3,794)      (7,039)     (7,331)
                                          --------    --------     --------    --------
   Income before income taxes..........      2,522         655        6,814       5,081
                                          --------    --------     --------    --------
Provision for income taxes.............      1,143         184        2,762         523
                                          --------    --------     --------    --------
   Net income..........................   $  1,379    $    471     $  4,052    $  4,558
                                          --------    --------     --------    --------
                                          --------    --------     --------    --------
Basic earnings per share...............   $   0.20    $   0.07     $   0.59    $   0.71
                                          --------    --------     --------    --------
                                          --------    --------     --------    --------
Diluted earnings per share.............   $   0.20    $   0.07     $   0.58    $   0.69
                                          --------    --------     --------    --------
                                          --------    --------     --------    --------
Weighted average shares
 outstanding (Basic)...................      6,837       6,441        6,837       6,441
                                          --------    --------     --------    --------
                                          --------    --------     --------    --------
Weighted average shares
 outstanding (Diluted).................      6,987       6,578        6,999       6,566
                                          --------    --------     --------    --------
                                          --------    --------     --------    --------
</TABLE>

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


                                      4

<PAGE>

                     COGENERATION CORPORATION OF AMERICA
              CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                            (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                     SIX MONTHS ENDED
                                                                   --------------------
                                                                   JUNE 30,    JUNE 30,
                                                                     1998        1997
                                                                   --------    --------
<S>                                                                <C>         <C>
Cash Flows from Operating Activities:
 Net income...................................................     $  4,052    $  4,558
 Adjustments to reconcile net income to net
   cash provided by operating activities:

     Depreciation and amortization............................        4,234       3,774
     Equity in earnings of affiliates.........................       (2,646)        (43)
     (Gain) loss on disposition of property and equipment.....         (137)        491
     Other, net...............................................           31         (38)
     Changes in operating assets and liabilities:
       Accounts receivable, net...............................        1,218       1,183
       Inventories............................................         (305)       (121)
       Receivables from related parties.......................         (158)        121
       Other assets...........................................         (223)         23
       Accounts payable and other current liabilities.........          662      (2,067)
                                                                   --------    --------
         Net cash provided by operating activities............        6,728       7,881
                                                                   --------    --------

Cash Flows from Investing Activities:
 Capital expenditures.........................................      (35,557)     (1,277)
 Proceeds from disposition of property and equipment..........          686         600
 Investment in equity affiliates..............................            -      (1,100)
 Project development costs....................................            -         (15)
 Collections on notes receivable..............................           24       1,122
 Deposits into restricted cash accounts, net..................        (737)      (1,158)
                                                                   --------    --------
         Net cash used in investing activities................      (35,584)     (1,828)
                                                                   --------    --------
Cash Flows from Financing Activities:
 Proceeds from long-term debt.................................       34,672       1,100
 Repayments of long-term debt.................................       (4,353)     (6,016)
 Net proceeds (repayments) of short-term borrowings...........          211        (415)
 Net repayments of prepetition liabilities....................            -      (1,732)
 Deferred financing costs.....................................          (4)           -
                                                                   --------    --------
         Net cash provided by (used) in financing activities..       30,526      (7,063)
                                                                   --------    --------

Net increase in cash and cash equivalents.....................        1,670      (1,010)
Cash and cash equivalents, beginning of period................        3,444       3,187
                                                                   --------    --------
Cash and cash equivalents, end of period......................     $  5,114    $  2,177
                                                                   --------    --------
                                                                   --------    --------

Supplemental disclosure of cash flow information:
  Interest paid...............................................     $  7,306    $  8,040
  Income taxes paid...........................................          648       1,030
  Transfer of construction payables into long-term debt.......        6,201           -
</TABLE>

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


                                      5

<PAGE>

                     COGENERATION CORPORATION OF AMERICA
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                JUNE 30, 1998
                            (DOLLARS IN THOUSANDS)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Cogeneration Corporation of America ("CogenAmerica" or the "Company" 
formerly NRG Generating (U.S.) Inc.) and its subsidiaries develop and own 
cogeneration 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 all 
majority-owned subsidiaries and all significant intercompany accounts and 
transactions have been eliminated.  Investments in companies, partnerships 
and projects that are more than 20% but less than majority-owned are 
accounted for by the equity method.

     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 December 31, 1997.  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.

     RECLASSIFICATIONS

     Certain reclassifications have been made to conform prior years' data to 
the current presentation.  These reclassifications had no impact on 
previously reported net income or stockholders' deficit.

     NET EARNINGS PER SHARE

     Basic earnings per share includes no dilution and is computed by dividing
net income available to common stockholders by the weighted average shares 
outstanding. Diluted earnings per share is computed by dividing net income by 
the weighted average shares of common stock and dilutive common stock 
equivalents outstanding. The Company's dilutive common stock equivalents 
result from stock options and are computed using the treasury stock method.

<TABLE>
<CAPTION>
                                               Three Months Ended                             Three Months Ended
                                                  June 30, 1998                                  June 30, 1997
                                  --------------------------------------------   --------------------------------------------
                                      Income          Shares                        Income            Shares
                                    (Numerator)    (Denominator)        EPS        (Numerator)     (Denominator)       EPS
                                  -------------- -----------------   ---------   --------------  -----------------  ---------
<S>                               <C>            <C>                 <C>         <C>             <C>                <C>
Net income:
 Basic EPS                         $      1,379            6,837      $  0.20     $        471              6,441    $  0.07
 Effect of dilutive
   stock options                              -              150                             -                137
                                   -------------  ----------------                -------------   ----------------
 Diluted EPS                       $      1,379            6,987      $  0.20     $        471              6,578    $  0.07
                                   -------------  ----------------                -------------   ----------------
                                   -------------  ----------------                -------------   ----------------
</TABLE>


                                      6

<PAGE>



             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                  JUNE 30, 1998
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                               Six Months Ended                               Six Months Ended
                                                 June 30, 1998                                  June 30, 1997
                                  --------------------------------------------   --------------------------------------------
                                      Income          Shares                        Income            Shares
                                    (Numerator)    (Denominator)        EPS        (Numerator)     (Denominator)       EPS
                                  -------------- -----------------   ---------   --------------  -----------------  ---------
<S>                               <C>            <C>                 <C>         <C>             <C>                <C>
Net income:
 Basic EPS                         $      4,052            6,837      $  0.59     $      4,558              6,441    $  0.71
 Effect of dilutive
   stock options                              -              162                             -                125
                                   ------------- -----------------                -------------   ----------------

 Diluted EPS                       $      4,052            6,999      $  0.58     $      4,558              6,566    $  0.69
                                   ------------- -----------------                -------------   ----------------
                                   ------------- -----------------                -------------   ----------------
</TABLE>


2.   LOANS DUE NRG ENERGY, INC.

     Of the June 30, 1998 loan balance of $4,439 due to NRG Energy, Inc. 
("NRG Energy"), $2,539 has a maturity date of April 30, 2001 and $1,900 has a 
maturity date of July 1, 2005.

3.   COMPREHENSIVE INCOME

     Effective January 1, 1998, the Company adopted the provisions of 
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive 
Income" ("SFAS 130") which established new rules for the reporting and 
display of comprehensive income and its components in a full set of 
general-purpose financial statements. Adoption of SFAS 130 had no impact on 
the Company's net income or stockholders' equity.  Total comprehensive income 
for the quarter ended June 30, 1998 and 1997 was $1,370 and $520, 
respectively.  Total comprehensive income for the six months ended June 30, 
1998 and 1997 was $4,078 and $4,536, respectively.  The difference between 
total comprehensive income and net income for the above periods was due to 
foreign currency translation adjustments.

   
4.   INVESTMENT IN GRAYS FERRY
    
   
     CogenAmerica Schuylkill Inc., a wholly-owned subsidiary ("CSI"), has a 
one-third partnership interest in the Grays Ferry Cogeneration Partnership 
("Grays Ferry Partnership"). The other partners are affiliates of PECO Energy 
Company ("PECO") and Trigen Energy Corporation ("Trigen"). Grays Ferry has 
constructed a 150 MW cogeneration facility located in Philadelphia. Grays 
Ferry has a 25-year contract to supply all the steam produced by the project 
to an affiliate of Trigen through January 2023 and a 20-year contract to 
supply all the electricity produced by the project to PECO through January 
2018.
    
   
     The Company accounts for its investment in Grays Ferry by the equity 
method. The investment in Grays Ferry was $15,476 and $12,845 at June 30, 
1998 and December 31, 1997, respectively. The Company's equity in the 
earnings of Grays Ferry was $1,645 and $2,631 for the quarter and six months 
ended June 30, 1998. Grays Ferry commenced commercial operations in January 
1998 and therefore had no earnings in 1997. Summarized income statement 
information of Grays Ferry for 1998 is presented below.
    


                                      7

<PAGE>

   
<TABLE>
<CAPTION>
                                             Grays Ferry
                                    ----------------------------
                                    Three Months      Six Months
                                       Ended            Ended
                                      June 30,         June 30,
                                        1998             1998
                                    ------------      ----------
     <S>                            <C>               <C>
     Net revenues                    $ 20,430          $ 37,463
     Cost of sales                     11,746            22,609
     Operationg income                  7,552            12,724
     Partnership net income             5,157             8,115
</TABLE>
    

   
5.   LITIGATION
    
     GRAYS FERRY LITIGATION.  The Company's wholly-owned subsidiary through 
which it owns a one-third interest in the Grays Ferry Cogeneration 
Partnership (the "Grays Ferry Partnership"), filed suit as one of three 
Plaintiffs (including the Grays Ferry Partnership) in an action brought 
against PECO Energy Company ("PECO") on March 9, 1998, in the United States 
District Court for the Eastern District of Pennsylvania, for PECO's refusal 
to pay the partnership the electricity rates set forth in the power purchase 
agreements.  On March 19, 1998, the federal district court dismissed the 
federal lawsuit for lack of subject matter jurisdiction.  On March 27, 1998, 
the Plaintiffs filed a motion for reconsideration and leave to file an 
amended complaint.  On April 13, 1998 the federal district court judge denied 
the Plaintiffs' motion.  The Plaintiffs thereafter filed a new lawsuit in 
state court in Pennsylvania seeking, among other things, to enjoin PECO from 
terminating its power purchase agreements with the partnership and to compel 
PECO to pay the electricity rates set forth in the agreements.  On May 5, 
1998, the Grays Ferry Partnership obtained a preliminary injunction enjoining 
PECO from terminating the power purchase agreements and ordering PECO to 
comply with the terms of the power purchase agreements pending the outcome of 
the litigation.  The Court of Common Pleas in Philadelphia also ordered PECO 
to abide by all of the terms and conditions of the power purchase agreements 
and pay the rates set forth in the agreements. The Plaintiffs were required 
to post a bond in the amount of $50 in connection with the preliminary 
injunction.  On May 8, 1998, PECO filed a motion to stay the preliminary 
injunction order.  On May 13, 1998, the Grays Ferry Partnership filed an 
emergency petition for contempt to compel PECO to pay the amounts due and 
owing under the power purchase agreements.  On May 20, 1998, the Court of 
Common Pleas granted the motion for civil contempt and ordered PECO to pay 
$50 for each day that PECO failed to comply with the court's order.  The 
power purchaser, in response to the preliminary injunction, has made all past 
due payments under protest and continues to make payments to the Grays Ferry 
Partnership under protest according to the terms of the power purchase 
agreements. PECO has filed a notice of appeal from the court's preliminary 
injunction order.  On July 7, 1998 PECO withdrew its appeal of the 
preliminary injunction.   The trial date of March 31, 1999 has been 
established and the discovery phase of the litigation is progressing. The 
Grays Ferry Partnership is vigorously pursuing the litigation and expects to 
achieve a favorable result.

     As a result of the power purchasers actions, the Grays Ferry Partnership 
is currently in default of its project financing credit agreement.  The debt 
under the credit agreement is secured only by the partnership's assets and 
the partners' ownership interest in the partnership.  The lenders have not 
accelerated the debt as a result of the default.  However, the Grays Ferry 
Partnership is currently prohibited from making certain 


                                      8

<PAGE>

distributions to its owners and other parties.  At June 30, 1998 the 
Company's investment in the Grays Ferry Partnership, which is accounted for 
by the equity method, was $15.5 million.  While it is possible that the 
Company's investment could become impaired, the Company does not believe that 
is likely and no provision for loss has been recorded.

     NRG ENERGY ARBITRATION.  On January 30, 1998, the Company gave notice to 
NRG Energy of a dispute to be arbitrated pursuant to the terms of its 
Co-Investment Agreement with the Company.  With certain exceptions, the 
Co-Investment Agreement obligates NRG Energy to offer to sell to the Company 
"eligible projects," which are defined in the Co-Investment Agreement as 
certain facilities which generate electricity for sale through the combustion 
of natural gas, oil or any other fossil fuel.  The Co-Investment Agreement 
provides that if NRG Energy offers to sell an eligible project to the Company 
and the Company declines to purchase the project, NRG Energy then has the 
right to sell the project to a third party at a price which equals or exceeds 
that offered to the Company.  See "Business -- Project Development Activities 
-- Co-Investment Agreement with NRG Energy."  In the arbitration proceeding, 
the Company contended that NRG Energy breached the Co-Investment Agreement 
by, among other things, agreeing to sell to OGE Energy Corp., an affiliate of 
Oklahoma Gas and Electric Company a 110 MW cogeneration project in Oklahoma 
without first offering the project to the Company at the same price.  The 
Company requested specific performance of NRG Energy's obligations under the 
Co-Investment Agreement.  NRG Energy argued that it had no obligation to 
offer the project to the Company.  On June 8, 1998, the arbitration panel 
reviewing the matter issued a preliminary injunction prohibiting NRG Energy 
from closing the sale of the project to OGE Energy Corp., pending the outcome 
of the arbitration and subject to the Company's posting of a $500 bond, which 
the Company posted.

     On July 31, 1998 the arbitration panel held that NRG Energy had not 
fulfilled its obligations under the Co-Investment Agreement by failing to 
offer the project to CogenAmerica under the terms of the Co-Investment 
Agreement.  The arbitration panel ordered NRG Energy to offer the project to 
CogenAmerica.  Specifically the order provided for a permanent injunction 
enjoining the closing of the sale of the project to OGE Energy Corp.  In 
addition, the bond that CogenAmerica posted for the preliminary injunction 
was released and no additional bond or security was required.  By August 30, 
1998, NRG Energy is required to make a written offer of the project to 
CogenAmerica on the same terms, price and structure as offered to OGE Energy 
Corp.  In addition, the offer is required to include seller financing, based 
on a good faith standard, as required by the Co-Investment Agreement. 
CogenAmerica will have thirty days from receipt of the reoffer to inform NRG 
Energy if it intends to purchase the project.

     On August 4, 1998 NRG Energy made an offer to sell the facility to 
CogenAmerica as required by the arbitration panel's order.  As of the date of 
this Report, CogenAmerica has made no determination whether to accept NRG 
Energy's offer.

     For additional information see "Part I -- Financial Information -- Item 
2. Management's Discussion and Analysis of Financial Condition and Results of 
Operations -- Liquidity and Capital Resources;" "Part II -- Other Information 
-- Item 1. Legal Proceedings;" and "Part II - Other Information - Item 3. 
Defaults Upon Senior Securities."

   
6.   REVOLVING CREDIT FACILITY
    

     On December 17, 1997, the Company entered into a credit agreement 
providing for a $30,000 reducing revolving credit facility.  The facility 
reduces by $2,500 on the first and second anniversaries of the agreement and 
repayment of the outstanding balance is due on the third anniversary of the 
agreement.  At June 30, 1998, borrowings of $25,000 were outstanding.  The 
facility is secured by the assets and cash flows of the Philadelphia PWD 
Project as well as the distributable cash flows of the Newark and Parlin 
Projects and the Grays Ferry Partnership.

     The credit agreement includes cross-default provisions that cause 
defaults to occur in the event certain defaults or other adverse events occur 
under certain other instruments or agreements (including financing and other 
project documents) to which the Company or one or more of its subsidiaries or 
other entities in which it owns an ownership interest is a party.  The 
actions taken by the power purchaser of the Grays Ferry Project have resulted 
in a cross default under the revolving credit facility.  Repayment of the 
revolving credit facility has not been accelerated and the lender has waived 
such default through July 1, 1999.  The Company has agreed not to draw any 
additional amounts under the revolving credit facility.


                                      9

<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 December 31, 1997.  
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 on Form 10-Q/A.  All 
dollar amounts (except per share amounts) set forth in this Report are in 
thousands.
    

     Except for the historical information contained in this Report, the 
matters reflected or discussed in this Report which relate to the Company's 
beliefs, expectations, plans, future estimates and the like are 
forward-looking statements within the meaning of Section 27A of the 
Securities Act of 1933, as amended, and Section 21E of the Securities 
Exchange Act of 1934, as amended.  Such forward-looking statements are not 
guarantees of future performance and are subject to risks, uncertainties and 
other factors that may cause the actual results, performance or achievements 
of the Company to differ materially from historical results or from any 
results expressed or implied by such forward-looking statements.  Such 
factors include, without limitation, uncertainties inherent in predicting the 
outcome of litigation and other factors discussed in this report and the 
Company's Report on Form 10-K for the year ended December 31, 1997 entitled 
"Item 1.  Business -- Risk Factors."  Many of such factors are beyond the 
Company's ability to control or predict, and readers are cautioned not to put 
undue reliance on such forward-looking statements.  The Company disclaims any 
obligation to update or review any forward-looking statements contained in 
this Report or in any statement referencing this Report, whether as a result 
of new information, future events or otherwise.

GENERAL

     The Company is engaged primarily in the business of developing, owning 
and operating cogeneration projects, which produce electricity and thermal 
energy for sale under long-term contracts with industrial and commercial 
users and public utilities.  In addition to its energy business, the Company 
sells and rents power generation and cogeneration equipment through 
subsidiaries located in the United States and the United Kingdom.

     In its role as a developer and owner of energy projects, the Company has 
developed the following projects in which it currently has an ownership 
interest:

     (a)  The 52 megawatt ("MW") Newark Boxboard Project (the "Newark 
          Project"), located in Newark, New Jersey, began operations in 
          November 1990, and is owned by the Company's wholly-owned 
          subsidiary CogenAmerica Newark, Inc. ("Newark");

     (b)  The 122 MW E.I. du Pont de Nemours Parlin Project (the "Parlin 
          Project"), located in Parlin, New Jersey, began operations in June 
          1991, and is owned by the Company's wholly-owned subsidiary 
          CogenAmerica Parlin, Inc. ("Parlin");

     (c)  The 22 MW Philadelphia Cogeneration Project (the "Philadelphia PWD 
          Project"), located in Philadelphia, Pennsylvania, began operations 
          in May 1993.  The principal project agreements relating to the 
          Philadelphia PWD Project are held by an 83%-owned subsidiary of the 
          Company; and


                                     10

<PAGE>

     (d)  The 150 MW Grays Ferry Project, located in Philadelphia, 
          Pennsylvania, began operations in January 1998.  The Company owns a 
          one-third interest in the Grays Ferry Partnership, which owns the 
          Grays Ferry Project.

     In December 1997, the Company acquired from NRG Energy a 117 MW steam 
and electricity cogeneration project located in Morris, Illinois (the "Morris 
Project").  The Morris Project is currently under construction with 
commercial operation currently expected to occur during the fourth quarter of 
1998.

     The Company's power purchase agreements ("PPAs") with utilities have 
typically contained, and may in the future contain, price provisions which in 
part are linked to the utilities' cost of generating electricity.  In 
addition, the Company's fuel supply prices, with respect to future projects, 
may be fixed in some cases or may be linked to fluctuations in energy prices. 
These circumstances can result in high volatility in gross margins and 
reduced operating income, either of which could have a material adverse 
effect on the Company's financial position or results of operations.  
Effective April 30, 1996, the Company renegotiated its PPAs with Jersey 
Central Power and Light Company ("JCP&L"), the primary electricity purchaser 
from its Newark and Parlin Projects.  Under the amended PPAs, JCP&L is 
responsible for all natural gas supply and delivery.  Management believes 
that this change in these PPAs has reduced its historical volatility in gross 
margins on revenues from such projects by eliminating the Company's exposure 
to fluctuations in the price of natural gas that must be paid by its Newark 
and Parlin Projects.

     Both the Newark and Parlin Projects were previously certified as 
qualifying facilities ("QFs") by the Federal Energy Regulatory Commission 
("FERC") under the Public Utility Regulatory Policies Act of 1978 ("PURPA").  
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 PPA, 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 the Parlin Project's claim to QF 
status.  The FERC approved Parlin's rates effective April 30, 1996 and 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, management believes that Parlin complies with 
all applicable requirements of state utility law.

     In addition to the energy business, the Company sells and rents power 
generation and cogeneration equipment and provides related services.  The 
Company operates its equipment sales, rentals and services business 
principally through two subsidiaries.  In the United States, the equipment 
sales, rentals and services business operates under the name of O'Brien 
Energy Services Company ("OES").  NRG Generating Limited, a wholly-owned 
United Kingdom subsidiary, is the holding company for a number of 
subsidiaries that operate in the United Kingdom under the common name of Puma 
("Puma").  The Company has determined that OES and Puma are no longer a part 
of its strategic plan, and the Company is currently pursuing alternatives for 
the disposition of these businesses.  The disposition of these businesses is 
not expected to have a material impact on the Company's results of operations 
or financial position.


                                     11

<PAGE>

NET INCOME AND EARNINGS PER SHARE

     Pre-tax earnings for the 1998 second quarter were $2,522 compared to 
$655 in the prior year comparable quarter.  Pre-tax earnings for the first 
six months of 1998 were $6,814 compared to $5,081 in the prior year 
comparable period.  Net income for the 1998 second quarter was $1,379, or 
diluted earnings per share of $0.20, compared to second quarter 1997 net 
income of $471, or diluted earnings per share of $0.07.  Net income for the 
first six months of 1998 was $4,052, or diluted earnings per share of $0.58, 
compared to net income of $4,558 in the prior year comparable period, or 
diluted earnings per share of $0.69.  The increase in net income for the 
second quarter is primarily due to higher earnings from the Newark and Parlin 
Projects and the equity in earnings from the Grays Ferry Project, which 
commenced operations in January 1998, offset by lower earnings from the 
equipment sales, rental and services segment and higher income tax expense.  
Net income for the first six months of 1998 was lower than the prior year 
period primarily due to lower earnings from the equipment sales, rental and 
services segment and higher income tax expense, offset by the positive impact 
of earnings from the Grays Ferry Project. Diluted earnings per share for the 
1998 second quarter increased from the prior comparable quarter due to higher 
net income, offset by an increase in the weighted average shares outstanding. 
Diluted earnings per share for the first six months of 1998 decreased from 
the prior year comparable period due to lower net income and an increase in 
the weighted average shares outstanding.  Weighted average shares outstanding 
increased primarily due to the conversion by NRG Energy in October 1997 of 
$3,000 of borrowings to the Company into 396,255 shares of the Company's 
common stock.

     During the 1997 fourth quarter, the Company recorded an income tax 
benefit by reducing the valuation allowance previously established for 
federal and state net operating loss carryforwards and other deferred tax 
assets.  Consequently, although the net operating loss carryforwards continue 
to reduce income taxes currently payable, 1998 earnings are generally 
fully-taxed.  In the quarter and six months ended June 30, 1997, which was 
prior to reversal of the valuation allowance, net operating loss 
carryforwards were recognized each period as a reduction of income tax 
expense based on pretax income.  On a comparable basis, net income for the 
quarter and six months ended June 30, 1997 would have been $358 and $3,021, 
or diluted earnings per share of $0.05 and $0.46, respectively, assuming the 
same effective tax rate as in the 1998 periods.

REVENUES

     Energy revenues for the second quarter 1998 of $10,518 increased from 
revenues of $9,002 for the comparable period in 1997.  Energy revenues for 
the first six months of 1998 of $21,801 increased from $21,393 for the 
comparable period in 1997. Energy revenues primarily reflect billings 
associated with the Newark and Parlin Projects and the Company's Philadelphia 
PWD Project.  The increase in energy revenues for the second quarter 1998 was 
primarily attributable to seasonal capacity revenues and due to a major 
maintenance outage at the Newark Project in the second quarter 1997.

     Revenues recognized at Parlin and Newark were $5,127 and $4,343 for the 
second quarter 1998 and $4,317 and $3,615 for the comparable period in 1997, 
respectively. Revenues recognized at Parlin and Newark were $10,513 and 
$9,188 for the first six months of 1998 and $10,606 and $8,709 for the 
comparable period in 1997, respectively.  The increases were primarily due to 
seasonal capacity revenues and due to a major maintenance outage at the 
Newark Project in the second quarter 1997.


                                     12

<PAGE>

     Energy revenues from the Company's Philadelphia Water Department standby 
facility project for the second quarter 1998 of $1,048 decreased slightly 
from revenues of $1,070 for the comparable period in 1997.  Energy revenues 
from this project for the first six months of 1998 of $2,100 increased 
slightly from the $2,078 of revenues for the comparable period in 1997.

     Equipment sales and services revenues for the second quarter 1998 of 
$2,863 decreased from revenues of $4,586 for the comparable period in 1997.  
Equipment sales and services revenues for the first six months of 1998 of 
$8,334 decreased from the $9,192 of revenues for the comparable period in 
1997.  The decreases wee primarily attributable to lower sales volume in the 
second quarter 1998.

     OES equipment sales and services revenues for the second quarter 1998 of 
$1,208 decreased from revenues of $1,440 for the comparable period in 1997.  
OES equipment sales and services revenues for the first six months of 1998 of 
$3,456 increased from the $2,728 of revenues for the comparable period in 
1997.  The increase for the first six months is primarily due to higher sales 
volume. Puma equipment sales and services revenues for the second quarter 
1998 of $1,655 decreased from revenues of $3,146 for the comparable period in 
1997.  Puma equipment sales and services revenues for the first six months of 
1998 of $4,878 decreased from the $6,464 of revenues for the comparable 
period in 1997.  The decreases were primarily due to lower sales volumes in 
some of Puma's Asian markets.

     Rental revenues for the second quarter 1998 of $606 increased from 
revenues of $467 for the comparable period in 1997.  Rental revenues for the 
first six months of 1998 of $1,481 increased from the $927 of revenues for 
the comparable period in 1997.  The increases were due primarily to higher 
sales volume due to ice storms in the northeastern United States and Canada.

COSTS AND EXPENSES

     Cost of energy revenues for the second quarter 1998 of $4,187 increased 
from costs of $4,072 for the comparable period in 1997.  Cost of energy 
revenues for the first six months of 1998 of $7,700 increased from the $7,232 
of costs for the comparable period in 1997.  The increases were primarily the 
result of depreciation associated with equipment capitalized at the Newark 
and Parlin facilities in periods subsequent to the first quarter of 1997.

     Cost of equipment sales and services for the second quarter 1998 of 
$2,729 decreased from costs of $3,662 for the comparable period in 1997.  
Cost of equipment sales and services for the first six months of 1998 of 
$7,468 decreased from the $7,561 of costs for the comparable period in 1997.  
The decreases were primarily due to lower sales volume at Puma.

     Cost of rental revenues for the second quarter 1998 of $524 increased 
from costs of $440 for the comparable period in 1997.  Cost of rental 
revenues for the first six months of 1998 of $1,174 increased from the $823 
of costs for the comparable period in 1997.  The increases were primarily due 
to increased sales volume due to ice storms in the northeastern United States 
and Canada.

     The Company's gross profit for the second quarter 1998 of $6,547 (46.8% 
of sales) increased from the second quarter 1997 gross profit of $5,881 
(41.8% of sales).  Gross profit for the first six months of 1998 of $15,274 
(48.3% of sales) decreased from gross 


                                     13

<PAGE>

profit of $15,896 (50.4% of sales) for the first six months of 1997.  The 
gross profit increase for the second quarter is primarily attributable to 
energy segment seasonal capacity revenues.  The gross profit decrease for the 
first six months of 1998 is primarily due to lower equipment sales.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses ("SG&A") for the second 
quarter 1998 of $2,429 increased from second quarter 1997 SG&A expenses of 
$1,663.  SG&A for the first six months of 1998 of $4,536 increased from SG&A 
of $3,916 for the comparable period in 1997.  The increase is primarily due 
to higher legal expenses, offset in part by lower insurance costs.

INTEREST AND OTHER INCOME

     Interest and other income for the second quarter 1998 of $251 increased 
from interest and other income of $227 for the comparable period in 1997.  
Interest and other income for the first six months of 1998 of $469 increased 
from interest and other income of $389 for the comparable period in 1997.  
The increase for the six month period is primarily attributable to a gain on 
the disposal of equipment.

EQUITY IN EARNINGS OF AFFILIATES

     Equity in earnings of affiliates for the second quarter 1998 of $1,639 
increased from second quarter 1997 equity in earnings of affiliates of $4.  
Equity in earnings of affiliates for the first six months of 1998 of $2,646 
increased from equity in earnings of affiliates of $43 for the comparable 
period in 1997.  The increases were primarily due to earnings from the Grays 
Ferry Project, which commenced operations in January 1998, of $1,646 and 
$2,632 for the second quarter and first six months of 1998, respectively.  
The earnings of the Grays Ferry Project reflect the contract price of 
electricity under the terms of the power purchase agreements.  The electric 
power purchaser has asserted that such power purchase agreements are not 
effective and that the power purchaser is not obligated to pay the rates set 
forth in the agreements, and the Company and the Grays Ferry Partnership are 
in litigation with the power purchaser over that issue.  For additional 
information see "Part I -- Financial Information" and "Part II -- Other 
Information -- Item 1.  Legal Proceedings."

INTEREST AND DEBT EXPENSE

     Interest and debt expense for the second quarter 1998 of $3,486 
decreased from interest and debt expense of $3,794 for the comparable period 
in 1997. Interest and debt expense for the first six months of 1998 of $7,039 
decreased from interest and debt expense of $7,331 for the comparable period 
in 1997.  The decrease is primarily attributable to lower average outstanding 
debt at Parlin and Newark as well as reduced interest rates on the Company's 
borrowings.

INCOME TAXES

     During the 1997 fourth quarter, the Company reduced the valuation 
allowance established for tax benefits attributable to net operating loss 
carryforwards and other deferred tax assets, resulting in recognition of most 
remaining operating loss carryforwards in 1997 fourth quarter earnings.  
Consequently, beginning with the 1998 


                                     14

<PAGE>

first quarter, income taxes are generally charged against pre-tax earnings 
without any reduction for operating loss carryforwards that continue to be 
used to reduce income taxes currently payable.  Prior to the 1997 fourth 
quarter, net operating loss carryforwards were recognized each period as a 
reduction of income tax expense based on pre-tax income.

     The consolidated effective tax rate for the quarters ended June 30, 1998 
and 1997 was 45.3% and 28.1%, respectively.  The consolidated effective tax 
rate for the six months ended June 30, 1998 and 1997 was 40.5% and 10.3%, 
respectively.  The higher effective rates in 1998 were due to the 
above-mentioned reduction in the valuation allowance and foreign losses at 
the Puma subsidiary for which a tax benefit was not recorded.

LIQUIDITY AND CAPITAL RESOURCES

     In May 1996, the Company's wholly-owned subsidiaries Newark and Parlin 
entered into a Credit Agreement (the "Credit Agreement") which established 
provisions for a $155,000 fifteen-year loan (of which $139,190 was 
outstanding at June 30, 1998) and a $5,000 five-year debt service reserve 
line of credit. The loan is secured by all of Newark's and Parlin's assets 
and a pledge of the capital stock of such subsidiaries.  The Company has 
guaranteed repayment of up to $25,000 of the amount outstanding under the 
Loan.  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. For any quarterly period where the debt service coverage 
ratio is in excess of 1.4:1, both margins are reduced by 0.125%.  
Concurrently with entering into 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 such principal amount ($69,595 at 
June 30, 1998) at 6.9% plus the margin.

     CogenAmerica Schuylkill, Inc. ("CSI"), a wholly owned subsidiary of the 
Company, owns a one-third partnership interest in the Grays Ferry Project.  
In March 1996, the Grays Ferry Partnership entered into a credit agreement 
with The Chase Manhattan Bank N.A. to finance the project.  The credit 
agreement obligated each of the project's three partners to make a $10,000 
capital contribution prior to the commercial operation of the facility.  The 
Company made its required capital contribution in 1997.

     NRG Energy entered into a loan commitment to provide CSI the funding, if 
needed, for the CSI capital contribution obligation to the Grays Ferry 
Partnership. CSI borrowed $10,000 from NRG Energy under this loan agreement 
in 1997, of which $1,900 remained outstanding to NRG Energy at June 30, 1998, 
and contributed the proceeds to the Grays Ferry Partnership as part of the 
above-referenced capital contribution.  In connection with this loan 
commitment for the Grays Ferry Project, the Company granted NRG Energy the 
right to convert $3,000 of borrowings under the commitment into 396,255 
shares of common stock of the Company.  In October 1997, NRG Energy exercised 
such conversion right in full.

     In connection with its acquisition of the Morris Project, CogenAmerica 
Funding Inc. (a wholly-owned subsidiary of the Company) ("CogenAmerica 
Funding") assumed all of the obligations of NRG Energy to provide future 
equity contributions to the project, which obligations are limited to the 
lesser of 20% of the total project cost or $22,000 and are expected to be 
required to be funded starting in September 1998.  NRG Energy has guaranteed 
to the Morris Project's lenders that CogenAmerica Funding will make these 
future equity contributions, and the Company has guaranteed to NRG Energy the 
obligation of CogenAmerica 


                                     15

<PAGE>

Funding to make these future equity contributions (which guarantee is secured 
by a second priority lien on the Company's interest in the Morris Project).  
NRG Energy has committed in a Supplemental Loan Agreement between the 
Company, CogenAmerica Funding and NRG Energy to loan CogenAmerica Funding and 
the Company (as co-borrower) the full amount of such equity contributions by 
CogenAmerica Funding, subject to certain conditions precedent, at 
CogenAmerica Funding's option.  Any such loan will be secured by a second 
priority lien on all of the membership interests of the project and will be 
recourse to CogenAmerica Funding and the Company. The Company anticipates 
that certain of such equity contributions will be financed through the 
Supplemental Loan Agreement.  However, the Company is continuing to pursue 
alternative sources of financing for either CogenAmerica Funding or itself 
(the terms and manner of which have not been determined by the Company) to 
fund the remainder of the required future equity contributions by 
CogenAmerica Funding to the Morris Project, which financing may include a 
refinancing of any amounts borrowed under the Supplemental Loan Agreement.

     On December 17, 1997, the Company entered into a credit agreement 
providing for a $30,000 reducing revolving credit facility with a new lender. 
The facility is secured by the assets and cash flows of the Philadelphia PWD 
Project as well as the distributable cash flows of the Newark and Parlin 
Projects, and the Grays Ferry Partnership.  On December 19, 1997 the Company 
borrowed $25,000 under this facility.  The proceeds were used to repay 
$16,949 to NRG Energy, to repay $6,551 of obligations of the Philadelphia PWD 
Project and $1,500 for general corporate purposes.  As a consequence of the 
pending Grays Ferry Partnership litigation, however, the Company has agreed 
not to draw additional funds under this facility.  In the absence of a waiver 
which the Company has obtained, the actions taken by the power purchaser from 
the Grays Ferry Project would have resulted in cross-defaults under this 
facility.  The Company is unable to predict whether or when additional funds 
may become available under this facility.  The $30,000 facility reduces by 
$2,500 on the first and second anniversaries of the agreement and repayment 
of the outstanding balance is due on the third anniversary of the agreement.  
Interest is based, at the Company's option, on LIBOR plus a margin ranging 
from 1.50% to 1.875% or the prime rate plus a margin ranging from 0.75% to 
1.125%.  The interest rate resets on a monthly basis.  The interest rate was 
7.31% at June 30, 1998.  The facility provides for commitment fees of 0.375% 
on the unused facility.

     The electric power purchaser from the Grays Ferry Project has asserted 
that its power purchase agreements are not effective and that the power 
purchaser is not obligated to pay the rates set forth in the agreements.  The 
Company and the Grays Ferry Partnership are in litigation with the power 
purchaser over its obligations under such agreements.  After initially 
refusing to pay the rates set forth in the power purchase agreements, the 
power purchaser has been ordered by the court in which the litigation is 
pending to comply with the power purchase agreements pending the outcome of 
the litigation. As a consequence of such order, the power purchaser is 
currently paying the contracted rates for electric power under protest.  
However, the power purchaser has filed a notice of appeal and motion to stay 
the court's order, and there can be no assurance that such order will not be 
stayed or reversed on appeal.  Moreover, as a result of the power purchasers 
actions, the Grays Ferry Partnership is in default of its principal credit 
agreement, and the lenders thereunder have the ability to prevent the Grays 
Ferry Partnership from distributing or otherwise disbursing cash held or 
generated by the Grays Ferry Project.  Such rights, if exercised by such 
lenders, could prevent the Grays Ferry Partnership from meeting its 
obligations to suppliers and others and from distributing cash to its 
partners during the pendency of the litigation.  Any such actions by the 
Grays Ferry Partnership's lenders could materially disrupt the Grays Ferry 
Partnership's relations with its suppliers and 


                                     16

<PAGE>

could have other potentially material adverse effects on its operations and 
profitability and on the Company. The Company believes that as long as the 
Grays Ferry Partnership continues to receive the contracted amounts due under 
the power purchase agreements, such lenders are unlikely to cause such 
adverse effects to occur.  While the Grays Ferry Partnership's lenders have 
allowed the partnership to meet its obligations to suppliers, the partnership 
received a notice of default from the lenders on June 22, 1998, for the 
failure to timely convert the loan used for construction purposes to a term 
loan.  Such failure occurred due to the Event of Default created by the 
alleged termination of the power purchase agreements by the electric power 
purchaser and due to the inability of the Grays Ferry Partnership to declare 
either provisional or final acceptance of the Grays Ferry Project due to the 
endurance of certain unresolved issues between the Grays Ferry Partnership 
and Westinghouse Electric Corporation ("Westinghouse") regarding completion 
and testing of the Grays Ferry Project, which issues are the subject of an 
ongoing arbitration proceeding between the partnership and Westinghouse. 
Based on discussions with representatives of the lenders to the Grays Ferry 
Partnership, the Company believes that until there is a satisfactory 
resolution of the litigation the lenders will continue to fund the operations 
of the project but will not allow distributions for the payment of 
subordinated fees, payments to the subordinated debt lender or equity 
distributions to the partners.  In lieu of making these payments, the Company 
anticipates that the Grays Ferry Partnership will be required to apply such 
amounts to the repayment of the loan.  The Company further expects that at 
the time the litigation is resolved the loan will be restructured.  For 
additional information see "Part II -- Item 1. Legal Proceedings" and "Part 
II -- Item 3. Defaults Upon Senior Securities."

     The Company believes that the Grays Ferry Partnership is likely either 
to prevail in the pending litigation with its electric power purchaser or 
otherwise to achieve a favorable resolution of this dispute.  However, the 
Company believes that if the power purchaser's position ultimately were to be 
sustained, the Grays Ferry Partnership would cease to be economically viable 
as currently structured and the Company's earnings and financial position 
could be materially adversely affected.  In addition, the Company could incur 
other material costs associated with such litigation, which would not be 
recovered and could suffer cross-defaults under one or more of its credit 
agreements. While the Company intends to continue to pursue a rapid and 
favorable resolution of the litigation with the power purchaser, there can be 
no assurance that such an outcome will be obtained.

YEAR 2000

     The Year 2000 issue refers generally to the data structure problem that 
will prevent systems from properly recognizing dates after the year 1999.  
For example, computer programs and various types of electronic equipment that 
process date information by reference to two digits rather than four to 
define the applicable year may recognize a date using "00" as the year 1900 
rather than the year 2000.  The Year 2000 problem could result in system 
failures or miscalculations causing disruptions of operations.  The Year 2000 
problem may occur in computer software programs, computer hardware systems 
and any device that relies on a computer chip if that chip relies on date 
information.  There can be no assurance that the Company's systems nor the 
systems of other companies with whom the Company conducts business will be 
properly remediated as required prior to December 31, 1999.  The failure of 
any such system could have a material adverse effect on the Company's 
business, operating results and financial condition.


                                     17

<PAGE>

NEW ACCOUNTING STANDARDS

     On June 15, 1998, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards No. 133, "Accounting for 
Derivative Instruments and Hedging Activities" ("SFAS 133").  SFAS 133 is 
required to be adopted for fiscal years beginning after June 15, 1999 (fiscal 
year 2000 for the Company).  SFAS 133 requires that all derivative 
instruments be recorded on the balance sheet at their fair value.  Changes in 
the fair value of derivatives are to be recorded each period in current 
earnings or other comprehensive income, depending on whether a derivative is 
designated as part of a hedge transaction and, if it is, the type of hedge 
transaction.  Management has not yet determined the impact that adoption of 
SFAS 133 will have on its earnings or financial position.

     In June 1997, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards No. 131, Disclosures about Segments of an 
Enterprise and Related Information ("SFAS 131").  SFAS 131, which supersedes 
SFAS No. 14, "Financial Reporting for Segments of a Business Enterprise," 
establishes standards for the way that public companies report information 
about operating segments in annual financial statements and requires 
reporting of selected information about operating segments in interim 
financial statements issued to the public.  It also establishes standards for 
disclosures regarding products and services, geographic areas and major 
customers.  The Company is required to first adopt the provisions of SFAS 131 
in its financial statements for the year ending December 31, 1998, and 
provide comparative information for earlier years.  Management believes that 
adoption of SFAS 131 will require minimal, if any, additional disclosures in 
its annual financial statements.


                                     18

<PAGE>

                                   PART II

                              OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.

     ALL DOLLAR AMOUNTS ARE IN THOUSANDS.

     GRAYS FERRY COGENERATION PARTNERSHIP, TRIGEN-SCHUYLKILL COGENERATION, 
INC., COGENAMERICA (SCHUYLKILL) INC. AND TRIGEN-PHILADELPHIA ENERGY CORP. v. 
PECO ENERGY COMPANY, ADWIN (SCHUYLKILL) COGENERATION, INC. AND THE 
PENNSYLVANIA PUBLIC UTILITY COMMISSION, Court of Common Pleas Philadelphia 
County, April Term 1998, No. 544, filed April 9, 1998. This action arose out 
of PECO Energy Company's ("PECO") notification to the Grays Ferry 
Cogeneration Partnership (the "Grays Ferry Partnership") that PECO believes 
its power purchase agreements with the Grays Ferry Partnership relating to 
the Grays Ferry Cogeneration Project (the "Grays Ferry Project") are no 
longer effective and PECO's refusal to pay the electricity rates set forth in 
the agreement based on its allegations that the Pennsylvania Public Utility 
Commission has denied cost recovery of the power purchase agreements in  
retail electric rates.  The Grays Ferry Partnership's complaint against PECO 
asserts claims which include breach of contract, fraud, breach of implied 
covenant of good faith, conversion, breach of fiduciary duties and tortious 
interference with contract.  The Plaintiffs are seeking to enjoin PECO from 
terminating the power purchase agreements and to compel PECO to pay the rates 
set forth therein.  The Plaintiffs also are seeking actual and punitive 
damages and attorneys' fees and costs.  On April 22, 1998, the court allowed 
the Grays Ferry Partnership to file an amended complaint to discontinue the 
suit against the Pennsylvania Public Utility Commission without prejudice. On 
May 5, 1998, the Grays Ferry Partnership obtained a preliminary injunction 
pending the outcome of the litigation enjoining PECO from terminating the 
power purchase agreements and ordering PECO to comply with the terms of the 
power purchase agreements.  The Court of Common Pleas in Philadelphia also 
ordered PECO to abide by all of the terms and conditions of the power 
purchase agreements and pay the rates set forth in the agreements.  The 
Plaintiffs were required to post a bond in the amount of $50 in connection 
with the preliminary injunction.  On May 8, 1998, PECO filed a notice of 
appeal and a motion to stay the preliminary injunction order.  On May 13, 
1998, the Grays Ferry Partnership filed an emergency petition for contempt to 
compel PECO to pay the amounts due and owing under the power purchase 
agreements. On May 20, 1998, the Court of Common Pleas granted the motion for 
civil contempt and ordered PECO to pay $50 for each day that PECO failed to 
comply with the court's order. The power purchaser, in response to the 
preliminary injunction, has made all past due payments and continues to make 
payments to the Grays Ferry Partnership according to the terms of the power 
purchase agreements.  PECO has filed a notice of appeal from the court's 
preliminary injunction order.  On July 7, 1998 PECO withdrew its appeal of 
the preliminary injunction.  The trial date of March 31, 1999 has been 
established and the discovery phase of the litigation is progressing. The 
Grays Ferry Partnership is vigorously pursuing the litigation and expects to 
achieve a favorable result.

     NRG ENERGY ARBITRATION. On January 30, 1998, the Company gave notice to NRG
Energy of a dispute to be arbitrated pursuant to the terms of its Co-Investment
Agreement with the Company.  With certain exceptions, the Co-Investment
Agreement obligates NRG Energy to offer to sell to the Company "eligible
projects," which are defined in the Co-Investment Agreement as certain
facilities, which generate electricity for sale through the combustion 


                                     19

<PAGE>

of natural gas, oil or any other fossil fuel.  The Co-Investment Agreement 
provides that if NRG Energy offers to sell an eligible project to the Company 
and the Company declines to purchase the project, NRG Energy then has the 
right to sell the project to a third party at a price which equals or exceeds 
that offered to the Company.  See "Business -- Project Development Activities 
-- Co-Investment Agreement with NRG Energy."  In the arbitration proceeding, 
the Company contended that NRG Energy breached the Co-Investment Agreement 
by, among other things, agreeing to sell to OGE Energy Corp., an affiliate of 
Oklahoma Gas and Electric Company a 110 MW cogeneration project in Oklahoma 
without offering the project to the Company at the same price.  The Company 
requested specific performance of NRG Energy's obligations under the 
Co-Investment Agreement.  NRG Energy argued that it had no obligation to 
offer the project to the Company.  On June 8, 1998, the arbitration panel 
reviewing the matter issued a preliminary injunction prohibiting NRG Energy 
from closing the sale of the project to OGE Energy Corp., pending the outcome 
of the arbitration and subject to the Company's posting of a $500 bond, which 
the Company posted.

     On July 31, 1998 the arbitration panel held that NRG Energy had not 
fulfilled its obligations under the Co-Investment Agreement by failing to 
reoffer the project to CogenAmerica under the terms of the Co-Investment 
Agreement.  The arbitration panel ordered NRG Energy to reoffer the project 
to CogenAmerica.  Specifically the order provided for a permanent injunction 
enjoining the closing of the sale of the project to OGE Energy Corp., 
replacing the preliminary injunction issued on June 8, 1998.  In addition, 
the bond that CogenAmerica posted for the preliminary injunction was released 
and no additional bond or security was required.  By August 30, 1998, NRG 
Energy is required to make a written reoffer of the project to CogenAmerica 
on the same terms, price and structure as offered to OGE Energy Corp.  In 
addition, the reoffer is required to include seller financing, based on a 
good faith standard, as required by the Co-Investment Agreement.  
CogenAmerica then will have thirty days from receipt of the reoffer to inform 
NRG Energy if it intends to purchase the project.

     On August 4, 1998 NRG Energy made an offer to sell the facility to 
CogenAmerica.  As of the date of this Report, CogenAmerica has made no 
determination whether to accept any reoffer of the project by NRG Energy as 
required by the arbitration panel's order.


                                     20

<PAGE>

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

ALL DOLLAR AMOUNTS ARE IN THOUSANDS.

GRAYS FERRY COGENERATION PARTNERSHIP

     CogenAmerica Schuylkill Inc., a wholly owned subsidiary of the Company, 
owns a one-third partnership interest in the Grays Ferry Partnership, which 
owns the Grays Ferry Project.  The Grays Ferry Partnership and The Chase 
Manhattan Bank N.A. ("Chase"), as Agent bank for the Lenders (as defined 
therein), are parties to a Credit Agreement dated March 1, 1996 to finance 
the Grays Ferry Project (the "Chase Facility"), of which $113,000 was 
outstanding as of June 30, 1998.  Certain actions taken by PECO, the electric 
power purchaser under two power purchase agreements with the Grays Ferry 
Partnership have caused certain defaults to occur under the Chase Facility.  
Such defaults have included defaults in the obligation to make interest 
payments thereon as well as certain other defaults resulting directly or 
indirectly from the actions taken by PECO. All payment defaults subsequently 
were cured by the Grays Ferry Partnership when the agent for the lenders 
under the Chase Facility permitted the release of cash held by the Grays 
Ferry Partnership for the purpose of making such interest payments. For 
additional information see "Part I -- Financial Information --Item 2. 
Management's Discussion and Analysis of Financial Condition and Results of 
Operations -- Liquidity and Capital Resources" and "Part II -- Other 
Information -- Item 1. Legal Proceedings."

     On June 22, 1998, the lenders under the Chase Facility gave notice to 
the Grays Ferry Partnership of a default under the Chase Facility arising out 
of the failure to timely convert the loan used for construction purposes to a 
term loan.  Such failure occurred due to the Event of Default created by the 
alleged termination of the power purchase agreements by the electric power 
purchaser and due to the inability of the Grays Ferry Partnership to declare 
either provisional or final acceptance of the Grays Ferry Project due to the 
endurance of certain unresolved issues regarding completion and testing of 
the Grays Ferry Project.  The Grays Ferry Partnership and Westinghouse are in 
arbitration over these unresolved issues.  See "Part II -- Other Information 
-- Item 1. Legal Proceedings."

THE COMPANY

     The Company, MeesPierson Capital Corp. ("MeesPierson") and certain other 
Lenders (as defined therein) are parties to a Credit Agreement dated as of 
December 17, 1997 which provides for a $30,000, three-year reducing, 
revolving credit facility agreement (the "MeesPierson Facility"), of which 
$25,000 was outstanding on June 30, 1998.  The MeesPierson Facility includes 
cross-default provisions that cause defaults to occur under the MeesPierson 
Facility in the event certain defaults or other adverse events occur under 
certain other instruments or agreements (including financing and other 
project documents) to which the Company or one or more of its subsidiaries or 
other entities in which it owns an ownership interest is a party.  In the 
absence of a waiver the actions taken by PECO would have resulted in certain 
cross-defaults under the MeesPierson Facility.  As of the date of this 
Report, MeesPierson, as Agent under the MeesPierson Facility, has waived 
through July 1, 1999 all such cross-defaults.  For additional information see 
"Part I -- Financial Information -- Item 2. Management's Discussion and 
Analysis of Financial Condition and Results of Operations -- Liquidity and 
Capital Resources."


                                     21

<PAGE>

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

     At the Annual Meeting of Stockholders of the Company held on May 22, 
1997 (the "Meeting"), the following directors were elected, each of whom will 
serve until the 1998 annual meeting of stockholders and until their successor 
is elected and qualified:

<TABLE>
<CAPTION>
NOMINEE                      AFFIRMATIVE        NEGATIVE
                                VOTES             VOTES         ABSTENTIONS
                            -------------      -----------      -----------
<S>                         <C>                <C>              <C>
David H. Peterson             6,118,142           9,377               -
Julie A. Jorgensen            6,118,955           8,564               -
Lawrence I. Littman           6,118,955           8,564               -
Craig A. Mataczynski          6,118,955           8,564               -
Robert T. Sherman, Jr.        6,118,955           8,564               -
Spyros S. Skouras, Jr.        6,118,955           8,564               -
Charles J. Thayer             6,118,955           8,564               -
Ronald J. Will                6,118,955           8,564               -
</TABLE>

     In addition, the following proposals were approved at the Meeting:

     Ratification of the selection of PricewaterhouseCoopers LLP as the 
Company's independent public accountants.

<TABLE>
<CAPTION>
                AFFIRMATIVE        NEGATIVE
                   VOTES             VOTES         ABSTENTIONS
               -------------      -----------      -----------
               <S>                <C>              <C>
                 6,115,221           1,650            10,648
</TABLE>

     Approval of the amendment to the Company's Certificate of Incorporation 
to change the Company's name to Cogeneration Corporation of America.

<TABLE>
<CAPTION>
                AFFIRMATIVE        NEGATIVE
                   VOTES             VOTES         ABSTENTIONS
               -------------      -----------      -----------
               <S>                <C>              <C>
                 6,109,280           4,408            13,831
</TABLE>

     Approval of the Company's 1998 Stock Option Plan authorizing the Company 
to grant options to purchase up to 250,000 shares of the Company's Common 
Stock to members of the Board of Directors, officers, key employees of the 
Company or its subsidiaries and other individuals who occupy responsible 
managerial, professional or advisory or other positions and who have made or 
have the capability of making a substantial contribution to the success of 
the Company.

<TABLE>
<CAPTION>
                AFFIRMATIVE        NEGATIVE
                   VOTES             VOTES         ABSTENTIONS
               -------------      -----------      -----------
               <S>                <C>              <C>
                 5,947,174          162,623           17,722
</TABLE>

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

          None.

                                     22
<PAGE>

                                  SIGNATURE

   
     Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this amendment to be signed on its behalf by the 
undersigned hereunto duly authorized.
    

                     Cogeneration Corporation of America
                 -------------------------------------------
                                  Registrant

   
Date:  December __, 1998                         By: /s/ Timothy P. Hunstad 
                                                 ------------------------------
    
                               Timothy P. Hunstad
                   VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
                   (Principal Financial Officer and Duly Authorized Officer)


                                     23

<PAGE>

                              INDEX TO EXHIBITS

   
3.1  Amended and Restated Certificate of Incorporation of the Company filed 
     as Exhibit 3.1 to the Company's Form 10-Q for the quarter ended June 30, 
     1998 and incorporated herein by this reference.
    

3.2  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.

3.3  Restated Bylaws of the Company filed as Exhibit 3.3 to the Company's Annual
     Report on Form 10-K for the fiscal year ended December 31, 1997 and
     incorporated herein by this reference.

27   Financial Data Schedule for the six months ended June 30, 1998 (for SEC
     filing purposes only).


                                     24