UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                                     
                          Washington, D.C. 20549
                                     
                                 FORM 10-Q
                                ___________
                                     
                                (Mark one)
   
    X   QUARTERLY  REPORT  PURSUANT  TO SECTION  13  OR  15(d)  OF  THE
        SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD  ENDED
        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.
   
                    COGENERATION CORPORATION OF AMERICA
                                 FORM 10-Q
                               June 30, 1998
                                     
                                   INDEX
                                     
                                     
                                                                    Page
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

                                    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
</TABLE>

<TABLE>
<CAPTION>
              LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<S>                                                                <C>          <C>
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>                                               
Cash Flows from Operating Activities:                             <C>        <C>                    
 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 include no dilution and 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.   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

                                    7

<PAGE>

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 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

                                    8

<PAGE>

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."

5.   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.   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:

Nominee                   Affirmative     Negative
                             Votes          Votes      Abstentions

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           -

     In addition, the following proposals were approved at the Meeting:
     
     Ratification  of the selection of PricewaterhouseCoopers  LLP  as  the
Company's independent public accountants.

                Affirmative     Negative
                   Votes          Votes       Abstentions

                 6,115,221        1,650         10,648
     
     Approval   of   the   amendment  to  the  Company's   Certificate   of
Incorporation  to change the Company's name to Cogeneration Corporation  of
America.

                Affirmative     Negative
                   Votes          Votes      Abstentions

                 6,109,280        4,408         13,831

     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.

                Affirmative     Negative
                   Votes          Votes      Abstentions

                 5,947,174       162,623        17,722

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 report to be signed on its  behalf  by
the undersigned hereunto duly authorized.


                         Cogeneration Corporation of America
                                     Registrant

Date: August 14, 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.

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