<PAGE>

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                                  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 MARCH 31, 1999

                                       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 19-34 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: 6,857,269 shares 
of common stock, $0.01 par value per share (the "Common Stock"), as of April 
27, 1999.

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<PAGE>

                       COGENERATION CORPORATION OF AMERICA
                                    FORM 10-Q
                                 MARCH 31, 1999

                                      INDEX

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

   Item 1.      Financial Statements.........................................  3
                Consolidated Balance Sheets -
                  March 31, 1999 and December 31, 1998.......................  3
                Consolidated Statements of Operations -
                  Three months ended March 31, 1999 and March 31, 1998.......  4
                Consolidated Statements of Cash Flows -
                  Three months ended March 31, 1999 and March 31, 1998.......  5
                Notes to Consolidated Financial Statements...................  6

   Item 2.      Management's Discussion and Analysis of Financial
                  Condition and Results of Operations........................ 11

   Item 3.      Quantitative and Qualitative Disclosures about Market Risk... 22


PART II - OTHER INFORMATION

   Item 1.      Legal Proceedings............................................ 23

   Item 6.      Exhibits and Reports on Form 8-K............................. 24

   Signature................................................................. 25

   Index to Exhibits......................................................... 26
</TABLE>

                                       2
<PAGE>

                                     PART 1
                              FINANCIAL INFORMATION

       ITEM 1.  FINANCIAL STATEMENTS

                       COGENERATION CORPORATION OF AMERICA
                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

                                     ASSETS
<TABLE>
<CAPTION>
                                                                         MARCH 31,          DECEMBER 31,
                                                                           1999                 1998
                                                                      ----------------    ----------------
                                                                         (UNAUDITED)
<S>                                                                   <C>                 <C>
Current assets:
  Cash and cash equivalents....................................       $         4,338     $         3,568
  Restricted cash and cash equivalents.........................                15,364              12,135
  Accounts receivable, net.....................................                20,605              14,326
  Receivables from related parties.............................                    61                 130
  Inventories..................................................                 2,269               2,683
  Other current assets.........................................                   304                 640
                                                                      ----------------    ----------------
    Total current assets.......................................                42,941              33,482

  Property, plant and equipment, net of accumulated
   depreciation of $50,969 and $47,819, respectively...........               241,733             244,040
  Investments in equity affiliates.............................                18,823              18,179
  Deferred financing costs, net................................                 6,111               6,503
  Other assets.................................................                16,468              16,470
                                                                      ----------------    ----------------
    Total assets...............................................       $       326,076     $       318,674
                                                                      ----------------    ----------------
                                                                      ----------------    ----------------

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Current portion of loans and payables due NRG Energy, Inc....       $         9,591     $         7,020
  Current portion of nonrecourse long-term debt................                 7,849               8,060
  Current portion of recourse long-term debt...................                 1,509               1,550
  Short-term borrowings........................................                 2,128               1,887
  Accounts payable.............................................                 9,033               8,800
  Prepetition liabilities......................................                   811                 803
  Other current liabilities....................................                 3,653               4,227
                                                                      ----------------    ----------------
    Total current liabilities..................................                34,574              32,347

  Loans due NRG Energy, Inc....................................                42,263              36,123
  Nonrecourse long-term debt...................................               187,684             189,848
  Recourse long-term debt......................................                45,225              45,225
  Deferred tax liabilities, net................................                 2,793               2,793
  Other liabilities............................................                 7,298               8,525
                                                                      ----------------    ----------------
    Total liabilities..........................................               319,837             314,861

Stockholders' equity (deficit):
  Common stock, par value $.01, 50,000,000 shares authorized
   6,871,069 shares issued, 6,857,269 and 6,836,769 shares
   outstanding as of March 31, 1999 and December 31, 1998,
   respectively................................................                    68                  68
  Additional paid-in capital...................................                65,813              65,715
  Accumulated deficit.                                                        (59,190)            (61,590)
  Accumulated other comprehensive income (loss)................                  (452)               (380)
                                                                      ----------------    ----------------
    Total stockholder's equity (deficit).......................                 6,239               3,813
                                                                      ----------------    ----------------
    Total liabilities and stockholders' equity (deficit).......       $       326,076     $       318,674
                                                                      ----------------    ----------------
                                                                      ----------------    ----------------
</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
                                                                  --------------------------------
                                                                    MARCH 31,          MARCH 31,
                                                                      1999                1998
                                                                  ------------        ------------
<S>                                                               <C>                <C>
        REVENUES:
         Energy revenues...........................               $   22,745          $   11,283
         Equipment sales and services..............                    3,807               5,471
         Rental revenues...........................                        -                 875
                                                                  ------------        ------------
                                                                      26,552              17,629

        COST OF REVENUES:
         Cost of energy revenues...................                   12,803               3,513
         Cost of equipment sales and services......                    3,327               4,739
         Cost of rental revenues...................                        -                 650
                                                                  ------------        ------------
                                                                      16,130               8,902
                                                                  ------------        ------------

           Gross profit............................                   10,422               8,727

         Selling, general and
          administrative expenses..................                    1,683               2,107
                                                                  ------------        ------------

           Income from operations..................                    8,739               6,620
                                                                  ------------        ------------

         Interest and other income.................                      125                 218
         Equity in earnings of affiliates..........                      670               1,007
         Interest and debt expense.................                   (5,706)             (3,553)
                                                                  ------------        ------------

           Income before income taxes..............                    3,828               4,292

         Provision for income taxes................                    1,428               1,619
                                                                  ------------        ------------

           Net income..............................               $    2,400          $    2,673
                                                                  ------------        ------------
                                                                  ------------        ------------

         Basic earnings per share..................               $     0.35          $     0.39
                                                                  ------------        ------------
                                                                  ------------        ------------

         Diluted earnings per share................               $     0.35          $     0.38
                                                                  ------------        ------------
                                                                  ------------        ------------

         Weighted average shares
          outstanding (Basic)......................                    6,847               6,837
                                                                  ------------        ------------
                                                                  ------------        ------------

         Weighted average shares
          outstanding (Diluted)....................                    6,918               7,010
                                                                  ------------        ------------
                                                                  ------------        ------------
</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>
                                                                            THREE MONTHS ENDED
                                                                     --------------------------------
                                                                         MARCH 31,        MARCH 31,
                                                                           1999             1998
                                                                     ---------------   --------------
<S>                                                                  <C>               <C>
Cash Flows from Operating Activities:
 Net income...................................................       $        2,400    $       2,673
 Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation and amortization............................                3,542            2,106
     Equity in earnings of affiliates.........................                 (644)          (1,007)
     Gain on disposition of property and equipment............                    -              (67)
     Other, net...............................................                    -               29
     Changes in operating assets and liabilities:
       Accounts receivable, net...............................               (6,270)            (302)
       Inventories............................................                  381                3
       Receivables from related parties.......................                   69               22
       Other assets...........................................                  339              325
       Accounts payable and other current liabilities.........                 (188)          (1,303)
                                                                     ---------------   --------------

         Net cash provided by (used in) operating activities..                 (371)           2,479
                                                                     ---------------   --------------

Cash Flows from Investing Activities:
 Capital expenditures.........................................               (2,071)         (25,314)
 Proceeds from disposition of property and equipment..........                    -               71
 Collections on notes receivable..............................                    -               26
 Deposits into restricted cash accounts, net..................               (3,221)            (102)
                                                                     ---------------   --------------

         Net cash used in investing activities................               (5,292)         (25,319)
                                                                     ---------------   --------------

Cash Flows from Financing Activities:
 Proceeds from long-term debt.................................               12,874           23,387
 Repayments of long-term debt.................................               (6,780)          (2,176)
 Net proceeds of short-term borrowing.........................                  241            3,168
 Deferred financing costs.....................................                    -               (4)
 Purchase of treasury stock...................................                  (50)               -
 Proceeds from issuance of common stock.......................                  148                -
                                                                     ---------------   --------------

         Net cash provided by financing activities............                6,433           24,375
                                                                     ---------------   --------------

Net increase in cash and cash equivalents.....................                  770            1,535
Cash and cash equivalents, beginning of period................                3,568            3,444
                                                                     ---------------   --------------
Cash and cash equivalents, end of period......................       $        4,338    $       4,979
                                                                     ---------------   --------------
                                                                     ---------------   --------------

Supplemental disclosure of cash flow information:
  Interest paid...............................................       $        3,786    $       3,237
  Income taxes paid...........................................                   38              347
</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)
                                 MARCH 31, 1999
                             (DOLLARS IN THOUSANDS)

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       Cogeneration Corporation of America ("CogenAmerica" or the "Company") 
is an independent power producer pursuing "inside-the-fence" cogeneration 
products in the U.S. The Company is engaged primarily in the business of 
developing, owning and managing the operation of cogeneration projects which 
produce electricity and thermal energy for sale under long-term contracts 
with industrial and commercial users and public utilities. The Company is 
currently focusing on natural gas-fired cogeneration projects with long-term 
contracts for substantially all of the output of such projects. In addition 
the Company sells and rents power generation and standby/peak shaving 
equipment and services through several wholly owned subsidiaries operating 
under the common name "PUMA".

       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, 1998. In the opinion of management, the consolidated 
financial statements reflect all adjustments necessary for a fair 
presentation of the interim periods presented. Results of operations for an 
interim period may not give a true indication of results for the year.

       NET EARNINGS PER SHARE

       Basic earnings per share ("EPS") includes no dilution and is computed 
by dividing net income (loss) by the weighted average share of common stock 
outstanding. Diluted EPS is computed by dividing net income (loss) 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
                                        MARCH 31, 1999                                        MARCH 31, 1998
                      ----------------------------------------------------  ----------------------------------------------------
                           INCOME               SHARES                           INCOME               SHARES
                         (NUMERATOR)         (DENOMINATOR)         EPS         (NUMERATOR)         (DENOMINATOR)         EPS
                      ------------------  --------------------  ----------  ------------------  --------------------  ----------
<S>                   <C>                 <C>                   <C>         <C>                 <C>
Net income:
 Basic EPS            $       2,400       $         6,847       $ 0.35      $      2,673        $         6,837      $  0.39
 Effect of dilutive
   stock options                  -                    71                              -                    173
                      ------------------  --------------------              ------------------  --------------------

 Diluted EPS          $       2,400       $         6,918       $ 0.35      $      2,673        $         7,010      $  0.38
                      ------------------  --------------------              ------------------  --------------------
                      ------------------  --------------------              ------------------  --------------------
</TABLE>

                                       6
<PAGE>

2.     LOANS AND PAYABLES DUE NRG ENERGY, INC.

       Amounts owed to NRG Energy, Inc. are comprised of the following:

<TABLE>
<CAPTION>
                                                                                     THREE MONTHS ENDED
                                                                           --------------------------------------
                                                                               MARCH 31,           DECEMBER 31,
                                                                                 1999                  1998
                                                                           -----------------    -----------------
<S>                                                                        <C>                  <C>
Long-term debt:
 Note due April 30, 2001                                                   $         2,539      $         2,539
 Grays Ferry note due July 1, 2005                                                   1,900                1,900
 Pryor note due September 30, 2004                                                  23,415               23,947
 Morris note due December 31, 2004                                                  21,069               12,027
                                                                           -----------------    -----------------
                                                                                    48,923               40,413
    Less current portion                                                            (6,660)              (4,290)
                                                                           -----------------    -----------------
                                                                          $         42,263     $         36,123
                                                                           -----------------    -----------------
                                                                           -----------------    -----------------

Current maturities of loans and accounts payable:
 Current maturities:
   Morris note                                                             $         4,149      $         2,104
   Pryor note                                                                        2,511                2,186
 Accounts payable:
   Management services, operations and other                                         2,931                2,730
                                                                           -----------------    -----------------
                                                                           $         9,591      $         7,020
                                                                           -----------------    -----------------
                                                                           -----------------    -----------------
</TABLE>

3.     COMPREHENSIVE INCOME

       The Company's comprehensive income is comprised of net income and 
other comprehensive income, which consists solely of foreign currency 
translation adjustments. Income taxes have not been provided on the foreign 
currency translation adjustments as the earnings of the foreign subsidiary 
are considered permanently reinvested. The components of comprehensive 
income, for the first quarter of 1999 and 1998 were as follows:

<TABLE>
<CAPTION>
                                                                                THREE MONTHS ENDED
                                                                         -------------------------------
                                                                            MARCH 31,        MARCH 31,
                                                                              1999             1998
                                                                         -------------     -------------
<S>                                                                      <C>               <C>
                   Net income                                            $     2,400       $     2,673
                   Foreign currency translation                                  (72)               35
                   gain (loss)
                                                                         -------------     -------------
                   Comprehensive income                                  $     2,328       $     2,708
                                                                         -------------     -------------
                                                                         -------------     -------------
</TABLE>

4.       INVESTMENT IN EQUITY AFFLIATES

         Investments in equity affiliates consist of the following:

<TABLE>
<CAPTION>
                                                                          MARCH 31,        DECEMBER 31,
                                                                             1999              1998
                                                                         --------------------------------
<S>                                                                      <C>              <C>
                   Grays Ferry (33% owned)                               $    18,234       $    17,603
                   PoweRent Limited (50% owned)                                  589               576
                                                                         -------------     -------------
                                                                         $    18,823       $    18,179,
                                                                         -------------     -------------
                                                                         -------------     -------------
</TABLE>

                                       7
<PAGE>

GRAYS FERRY

       On March 31, 1999, CogenAmerica Schuylkill, a wholly-owned subsidiary 
of the Company, had a one-third partnership interest in the Grays Ferry 
Cogeneration Partnership("Grays Ferry"). The other partners as of such date 
were affiliates of PECO Energy Company ("PECO")and Trigen Energy Corporation 
("Trigen"). Grays Ferry has constructed a 150 MW cogeneration facility 
located in Philadelphia which began commercial operations in January 1998. 
Grays Ferry has a 25-year contract to supply all the steam produced by the 
project to an affiliate of Trigen through 2022 and two 20-year contracts 
("PPAs") to supply all of the electricity produced by the project to PECO 
through 2017.

       The Company accounts for its investment in Grays Ferry by the equity 
method. The Company's equity in earnings of the partnership was $631 and $986 
for the three months ended March 31, 1999 and 1998, respectively.

       On April 23, 1999, Grays Ferry and PECO reached final settlement on 
the resolution of litigation concerning the parties' Power Purchase 
Agreements. Under the terms of the settlement, PECO transferred its one-third 
ownership interest in the 150-megawatt project to Grays Ferry. As a result, 
the Company's respective interest in Grays Ferry increased to 50% effective 
April 23, 1999 (See Note 6). Summarized financial information for Grays Ferry 
for the three months ended March 31, 1999 and 1998 is presented below:

<TABLE>
<CAPTION>
                                                                                THREE MONTHS ENDED
                                                                         -------------------------------
                                                                           MARCH 31,         MARCH 31,
                                                                             1999               1998
                                                                         -------------     -------------
<S>                                                                      <C>               <C>
                   Current assets                                        $    30,595       $    28,137
                   Non-current assets                                    $   157,505       $   161,944
                   Current liabilities                                   $   136,493       $   151,680
                   Non-current liabilities                               $         -       $         -

                   Net revenues                                          $    19,174       $    17,033
                   Cost of sales                                         $    11,803       $    10,863
                   Operating income                                      $     4,539       $     5,172
                   Partnership net income                                $       869       $     2,958
</TABLE>

POWERENT LIMITED

       PoweRent Limited ("PoweRent") is a 50% owned United Kingdom Company 
owned by PUMA that sells and rents power generation equipment. The Company 
accounts for its investment by the equity method. The Company's equity in 
earnings was $13 and $27 for the three months ended March 31, 1999 and 1998, 
respectively.

       The Company has determined and previously announced that its equipment 
sales, rental and services business is not a part of its strategic plan. The 
Company is currently pursuing several avenues for the disposition of PUMA, 
which is not expected to have a material adverse effect on the Company's 
final position or results of operations.

                                       8
<PAGE>

5.     SEGMENT INFORMATION

       The Company is engaged principally in developing, owning and managing 
cogeneration projects and the sale and service of cogeneration related 
equipment. The Company has classified its operations in the following 
segments: energy, and equipment sales, rental and service. The energy segment 
consists of cogeneration and standby/peak shaving projects. The equipment 
sales, rental and service segment consists of PUMA, the Company's 
wholly-owned subsidiary based in the United Kingdom and O'Brien Energy 
Services Company ("OES") until its sale in November 1998. Summarized 
information about the Company's operations in each industry segment are as 
follows:

<TABLE>
<CAPTION>
                                                                                      QUARTER ENDED MARCH 31, 1999
                                                                  ------------------------------------------------------------------
                                                                                     EQUIPMENT
                                                                                   SALES, RENTAL
                                                                    ENERGY           & SERVICE              OTHER           TOTAL
                                                                  ----------       --------------        -----------     -----------
<S>                                                               <C>              <C>                   <C>             <C>
Revenues                                                          $ 22,745         $      3,807          $      -        $  26,552
Depreciation & amortization                                          3,123                   27                 -            3,150
Other cost of revenues                                               9,680                3,300                 -           12,980
                                                                  ----------       --------------        -----------     -----------
Gross profit                                                         9,942                  480                 -           10,422
Selling, general & administrative expenses                           1,121                  354               208            1,683
                                                                  ----------       --------------        -----------     -----------
Income (loss) from operations                                        8,821                  126              (208)           8,739
Interest & other income                                                 76                    -                49              125
Interest & debt expense                                             (5,212)                 (72)             (422)          (5,706)
Equity in earning of affiliates                                        630                   40                 -              670
                                                                  ----------       --------------        -----------     -----------
Income (loss) before taxes                                        $  4,315         $         94          $   (581)       $   3,828
                                                                  ----------       --------------        -----------     -----------
                                                                  ----------       --------------        -----------     -----------

Identifiable assets                                               $260,688         $      7,428          $ 57,960        $ 326,076
Capital expenditures                                                   962                   22                 3              987

<CAPTION>
                                                                                      QUARTER ENDED MARCH 31, 1998
                                                                  ------------------------------------------------------------------
                                                                                     EQUIPMENT
                                                                                   SALES, RENTAL
                                                                    ENERGY           & SERVICE              OTHER           TOTAL
                                                                  ----------       --------------        -----------     -----------
<S>                                                               <C>              <C>                   <C>             <C>
Revenues                                                          $ 11,283         $      6,346          $      -        $  17,629
Depreciation & amortization                                          1,899                   50                 -            1,949
Other cost of revenues                                               1,614                5,339                 -            6,953
                                                                  ----------       --------------        -----------     -----------
Gross profit                                                         7,770                  957                 -            8,727
Selling, general & administrative expenses                           1,238                  579               290            2,107
                                                                  ----------       --------------        -----------     -----------
Income (loss) from operations                                        6,532                  378              (290)           6,620
Interest & other income                                                124                    5                89              218
Interest & debt expense                                             (3,131)                 (79)             (343)          (3,553)
Equity in earning of affiliates                                        987                   20                 -            1,007
                                                                  ----------       --------------        -----------     -----------
Income (loss) before taxes                                        $  4,512         $        324          $   (544)       $   4,292
                                                                  ----------       --------------        -----------     -----------
                                                                  ----------       --------------        -----------     -----------

Identifiable assets                                               $182,169         $      9,274          $ 62,240        $ 253,683
Capital expenditures                                                   212         $         76          $      -        $     288
</TABLE>

                                       9
<PAGE>

6.     SUBSEQUENT EVENTS

SETTLEMENT BETWEEN GRAYS FERRY COGENERATION PARTNERSHIP AND PECO

       On April 23, 1999, Grays Ferry and PECO reached a final settlement in 
the Common Pleas Court in Philadelphia on the resolution of litigation 
concerning the parties' Power Purchase Agreements ("PPAs").

       The settlement calls for PECO and Grays Ferry to specifically perform 
the existing PPAs as amended, under an order from the Court. This includes 
PECO paying for capacity and electric energy purchases from Grays Ferry at the 
specific contract prices set out in the PPAs for the 1998-2000 time period.

       The energy pricing under the original terms of the PPAs after the year 
2000 was based upon a percentage of the PJM market price, which is the local 
wholesale market price. This market-based pricing is expected to produce 
substantially lower revenues than the more favorable rates of the early 
contract years. As part of the settlement, the PPAs were amended to modify 
the percentage of the PJM market price to lessen the impact in the early 
years of market-index pricing.

       Under the terms of the settlement, PECO will also transfer its 
one-third ownership interest in the 150-megawatt project to Grays Ferry. As a 
result, CogenAmerica and Trigen Energy Corporation's respective interest in 
Grays Ferry will increase from 33% to 50%. PECO will transfer its interest to 
Grays Ferry at no cost. The transfer is effective with the final settlement 
on April 23, 1999.

       As a result of the settlement, CogenAmerica will record a one-time 
gain in the second quarter of 1999, based upon the fair market value of the 
additional ownership interest. Management currently estimates the after-tax 
gain will be approximately $5 to $6 million.

       Additionally, the settlement resolves litigation against PECO by the 
Chase Manhattan Bank and Westinghouse Power Generation and arbitration 
between Grays Ferry and Westinghouse regarding the construction contract.

MORRIS OUTAGE

         The Morris facility experienced an unscheduled outage on April 20, 
1999 which resulted in service and business interruption to Equistar 
Chemicals LP ("Equistar"). In January 1999 there were two similar incidents. 
CogenAmerica, Equistar and NRG Energy, in its capacity as provider of 
construction management services and operation and maintenance services, are 
continuing to investigate the matter and are examining their respective 
rights and obligations with respect to each other and with respect to 
potentially responsible third parties, including insurers. CogenAmerica 
believes it is likely that additional capital from the construction 
contingency from the project financing will be expended to enhance 
reliability. The Company does not believe that there will be a material 
adverse impact on the Company's financial statements, however, no assurance 
can be given as to the ultimate outcome of this matter.

                                       10
<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, 1998. 
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 consolidated 
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. Without limiting the generality of the 
foregoing, the words "believe," "anticipate," "estimate," "expect," "intend," 
"plan," "seek" and similar expressions, when used in this Report and in such 
other statements, are intended to identify forward-looking statements. These 
forward looking statements include, among others, the Company's estimates of 
the impact of the Grays Ferry settlement on its net income and earnings per 
share. Such forward-looking statements 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, operating risks and uncertainties 
which tend to be greater with respect to new facilities, such as the risk 
that the breakdown or failure of equipment or processes or unanticipated 
performance problems may result in lost revenues or increased expenses, and 
other factors discussed in this Report and the Company's Report on Form 10-K 
for the year ended December 31, 1998 in the section 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. By making these forward-looking 
statements, the Company does not undertake to update them in any manner 
except as may be required by the Company's disclosure obligations in filings 
it makes with the Securities and Exchange Commission under the Federal 
securities laws.

GENERAL

       CogenAmerica is an independent power producer pursuing 
"inside-the-fence" cogeneration projects in the U.S. The Company is engaged 
primarily in the business of developing, owning and managing the operation of 
cogeneration projects which produce electricity and thermal energy for sale 
under long-term contracts with industrial and commercial users and public 
utilities. The Company is currently focusing on natural gas-fired 
cogeneration projects with long-term contracts for substantially all of the 
output of such projects. The Company's strategy is to develop, acquire and 
manage the operation of such cogeneration projects and to provide U.S. 
industrial facilities and utilities with reliable and competitively priced 
energy from its power projects.

       CogenAmerica has substantial expertise in the development and 
operation of power projects. The Company's project portfolio as of March 31, 
1999 consisted of:

                                       11
<PAGE>

       (i)    a 122 MW cogeneration facility in Parlin, New Jersey (the "Parlin
              Project"), which began commercial operation in June 1991 and is
              owned through its wholly-owned subsidiary, CogenAmerica Parlin;

       (ii)   a 58 MW cogeneration facility in Newark, New Jersey (the "Newark
              Project"), which began commercial operation in November 1990 and
              is owned through its wholly-owned subsidiary, CogenAmerica Newark;

       (iii)  a 117 MW cogeneration facility in Morris, Illinois (the "Morris
              Project"), which began commercial operation in November 1998 and
              is owned through its wholly-owned subsidiary, CogenAmerica Morris.
              See "Part I - Item 1. - Subsequent Events";

       (iv)   a 110 MW cogeneration facility in Pryor, Oklahoma (the "Pryor
              Project"), which had been in commercial operation prior to
              acquisition by the Company in October 1998, and is owned through
              the Company's wholly-owned subsidiary, Oklahoma Loan Acquisition
              Corporation;

       (v)    two standby/peak shaving facilities with an aggregate capacity
              of 22 MW in Philadelphia, Pennsylvania (the "PWD Project"), which
              began commercial operation in September 1993, the principal
              project agreements of which are held by O'Brien (Philadelphia)
              Cogeneration, Inc., an 83%-owned subsidiary of the Company; and

       (vi)   a one-third partnership interest in a 150 MW cogeneration facility
              located at Grays Ferry in Philadelphia, Pennsylvania (the "Grays
              Ferry Project"), which began operation in January 1998.
              CogenAmerica's partnership interest increased to 50% on April 23,
              1999. See "Part I - Item 1. - Subsequent Events."

       Each of the projects is currently producing revenues under long-term 
power sales agreements that expire at various times.

       Energy and capacity payment rates are generally negotiated during the 
development phase of a cogeneration project and are finalized prior to 
securing project financing and the start of a plant's commercial operation. 
Pricing provisions of each of the Company's project power sales agreements 
contain unique features. As a result, different rates exist for each plant 
and customer pursuant to the applicable power sales agreement.

       However, in general, revenues for each of the Company's cogeneration 
projects consist of two components: energy payments and capacity payments. 
Energy payments are based on the power plant's actual net electrical output, 
expressed in kilowatt-hours of energy, purchased by the customer. Capacity 
payments are based on the net electrical output the power plant is capable of 
producing (or portion thereof) and which the customer has contracted to have 
available for purchase. Energy payments are made for each kilowatt-hour of 
energy delivered, while capacity payments, under certain circumstances, are 
made whether or not any electricity is actually delivered.

                                       12
<PAGE>

       The projects' energy and capacity payments are generally based on 
scheduled prices and/or base prices subject to periodic indexing mechanisms, 
as specified in the power sales agreements. In general terms, energy and 
capacity payments are intended to recover the variable and fixed costs of 
operating the plant, respectively, plus a return.

       A power plant may be characterized as one or more of the following: a 
"base-load" facility, a "dispatchable" facility, a combination 
"base-load/dispatchable" facility or a "merchant" facility. Such 
characterization depends upon the manner in which the plant will be used and 
the requirements of the related power sales agreement(s). A "base-load" 
facility generally means that the plant is operated continuously to produce a 
fixed amount of energy and capacity for one or more customers. A 
"dispatchable" facility generally means that the customer(s) purchased the 
right to a fixed amount of available capacity, which must be produced if and 
when requested by the customer(s). A combination "base-load/dispatchable" 
facility is a plant that operates in both modes, with a portion of the 
plant's capacity designated as base-load and the remainder available for 
dispatch. A "merchant" facility generally refers to a plant that operates and 
sells its output to various customers at prevailing market prices rather than 
pursuant to a long-term power sales agreement.

       Under a power sales agreement with Jersey Central Power and Light 
Company ("JCP&L") extending into 2011, CogenAmerica Parlin has committed 114 
MW of the Parlin facility's generating capacity to JCP&L, of which 41 MW are 
committed as base capacity and 73 MW as dispatchable capacity. JCP&L must 
purchase energy from the base capacity whenever such energy is available from 
the Parlin facility. Energy from the dispatchable capacity is purchased by 
JCP&L only when requested (dispatched) by JCP&L.

       The Parlin PPA provides for curtailment by JCP&L under such typical 
conditions as emergencies, inspection and maintenance. In addition, JCP&L may 
also reduce base capacity during periods of low load on the PJM (the local 
wholesale market) by up to 600 hours in any calendar year, of which 400 may 
be during on-peak periods, but only when all PJM member utilities are 
required to reduce generation to minimum levels and PJM has requested JCP&L 
to reduce or interrupt external generation purchases. The Parlin PPA also 
provides for an annual average heat rate adjustment that will increase or 
decrease JCP&L's payments to CogenAmerica Parlin, depending upon whether the 
average heat rate of the Parlin Project is below or above average 9,500 Btu 
per kWh (higher heating value). The actual adjustment is calculated by 
applying a ratio based on this differential to a fuel cost calculation.

       CogenAmerica Newark has a power sales agreement with JCP&L extending 
through 2015 whereby it has committed to sell all of the Newark facility's 
generating capacity to JCP&L, up to a maximum of 58 MW per hour. The Newark 
Project is effectively a base-load unit and JCP&L must purchase the energy 
whenever such energy is available from the Newark facility.

       Under the terms of the Newark PPA, JCP&L, in its sole discretion, is 
allowed to curtail production at the facility for 700 hours per year provided 
that the duration of each curtailment is a minimum of six hours and all 
curtailments occur only during Saturdays, Sundays and Holidays. Since 
contract inception in 1996, JCP&L have fully utilized this curtailment option 
annually and the Company expects JCP&L will continue to do so in future 
years. JCP&L may also disconnect from CogenAmerica Newark for emergencies, 
inspections and maintenance for up to 400 hours per year if all PJM 

                                       13
<PAGE>

member utilities are required to reduce generation to minimum levels and 
JCP&L has been requested by PJM to reduce or interrupt external generation 
purchases. The Newark PPA provides for an annual average heat rate adjustment 
that will increase or decrease JCP&L's payments to CogenAmerica Newark 
depending upon whether the average heat rate of the Newark Project is below 
or above 9,750 Btu per kWh (higher heating value). The actual adjustment is 
calculated by applying a ratio based upon this differential to a fuel cost 
calculation.

       Morris LLC has an Energy Service Agreement ("ESA") with Equistar 
through 2023 to provide base-load power and steam. Equistar has agreed to 
purchase the entire requirements of Equistar's plant (subject to certain 
exceptions) for electricity up to the full electric output of two of the 
three combustion turbines at the Morris Project. In addition, the Morris 
Project has an arrangement with the local utility to provide standby power. 
Each combustion turbine at the Morris facility has a nominal rating of 39 MW. 
The Morris Project designed redundancy into the energy production capability 
of the facility in order to meet Equistar's demand. The cost of installing 
and maintaining the reserve capacity was taken into account when the energy 
services agreement was negotiated.

       CogenAmerica Morris is permitted to arrange for the sale to third 
parties of interruptible capacity and/or energy from the third turbine and to 
the extent available, any excess power from the two turbines required to 
supply Equistar with its actual requirements. CogenAmerica Morris is in the 
process of contracting with a third-party power marketer for the sale of this 
excess capacity/energy.

         CogenAmerica Pryor has a power sales agreement with Oklahoma Gas and 
Electric Company ("OG&E") through 2008 to provide 110 MW of dispatchable 
capacity, with a maximum dispatch of 1,500 hours per year. The facility also 
sells electricity to Public Service Company of Oklahoma ("PSO") when not 
dispatched by OG&E. The Pryor Project purchases natural gas from Dynegy and 
Aquila. Under the terms of the agreement with PSO, the pricing of energy 
sales is indexed to a market fuel rate. Under terms of the agreement with 
OG&E, energy sales are linked to the average cost of fuel.

         The power sales agreements for the Parlin, Newark, and Morris 
projects are structured to avoid or minimize the impact on the Company's 
revenues from fluctuations in fuel costs. Since the power sales agreements 
were amended in April 1996, JCP&L is responsible for the supply and 
transportation of natural gas required to operate the Parlin and Newark 
plants. Thus, revenues from the Parlin and Newark plants exclude any amounts 
attributable to recovery of fuel costs. Prior to the contract amendments, 
Parlin and Newark cost of revenues included fuel and related costs and 
contract provisions for delayed recovery of such costs in revenues caused 
variability in the projects' gross profit.

         Under the terms of the Morris ESA with Equistar, Equistar is the 
fuel manager and all of the costs of supplying the fuel are effectively a 
pass-through to Equistar. As a result, although fuel costs are included in 
the Morris Project revenues and costs of revenues, the Company believes it 
has minimized any impact on gross profit from fluctuations in the price of 
natural gas purchases and supply for the Morris Project.

         The Grays Ferry Project has a gas sales agreement with Aquila 
providing for the purchase of natural gas to meet the power plant's 
requirements. For the period from 

                                       14
<PAGE>

commercial operations in January 1998 until the end of the year 2000, the 
partnership has purchased a natural gas collar with a cap in order to limit 
the volatility of natural gas purchases. Beginning in 2001, the price for 
natural gas supplied by Aquila is indexed to a market electricity rate.

         During 1998, the Company also sold and rented power generation 
equipment and provided related services in the U.S. and international markets 
under the names OES and PUMA. As previously announced, the Company has 
determined that its equipment sales rental and service segment is no longer a 
part of its strategic plan. Accordingly, on November 5, 1998 the Company sold 
OES, a wholly-owned subsidiary of the Company, in a stock transaction to an 
unrelated third party. The Company is currently pursuing alternatives for the 
disposition of its remaining equipment sales and service business operated by 
PUMA. The Company expects that the disposition of PUMA will not have a 
material adverse effect on the Company's results of operations or financial 
condition. Although OES was sold in 1998, the equipment sales, rental and 
service segment has not been reported as a discontinued operation in the 
financial statements because specific plans regarding the timing and manner 
of ultimate disposition of PUMA are still under consideration.

NET INCOME AND EARNINGS PER SHARE

         Net income for the 1999 first quarter was $2,400, or diluted 
earnings per share of $0.35, compared to first quarter 1998 net income of 
$2,673, or diluted earnings per share of $0.38.

         The decrease in net income and earnings per share for first quarter 
was primarily due to outages at the Newark and Grays Ferry facilities.

REVENUES

         Energy revenues for the first quarter of 1999 of $ 22,745 increased 
from $11,283 for the comparable period in 1998. Energy revenues primarily 
reflect billings associated with the Parlin, Newark, Morris, Pryor and PWD 
Projects. The increase in energy revenues was primarily attributable to the 
acquisition of the Pryor Project in October 1998, and the commencement of 
Morris operations in November 1998. Energy revenues in the first quarter of 
1999 were negatively impacted by an outage at the Newark Project.

                             PROJECT ENERGY REVENUES

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED
                                             ---------------------------------
                                                MARCH 31,        MARCH 31,
                                                  1999              1998
                                             ---------------   ---------------
<S>                                          <C>               <C>
   Cogeneration Projects
       Parlin                                 $      5,380      $      5,386
       Newark                                        4,505             4,845
       Morris                                        7,982                 -
       Pryor                                         3,834                 -

   Standby/Peak Shaving Facilities
       PWD                                           1,044             1,052
                                              --------------    --------------
                                              $     22,745      $     11,283
                                              --------------    --------------
                                              --------------    --------------
</TABLE>

       Equipment sales and services revenues for the first quarter 1999 of 
$3,807 decreased from $5,471 for the comparable period in 1998. The decrease 
was primarily 

                                       15
<PAGE>

attributable to the sale of OES in November 1998. PUMA equipment sales and 
services revenues for the first quarter 1999 of $3,807 increased from $3,223 
for the comparable period in 1998. The increase was primarily due to higher 
sales volume.

       Rental revenues in the 1998 first quarter were attributable to OES, 
which was sold in November 1998.

COSTS AND EXPENSES

       Cost of energy revenues for the first quarter 1999 of $12,803 
increased from $3,513 for the comparable period in 1998. The increase was 
primarily the result of commencement of the Morris operations, the Pryor 
acquisition and depreciation associated with equipment capitalized at the 
Parlin and Newark facilities in 1998.

       Cost of equipment sales and services for the first quarter 1999 of 
$3,327 decreased from $4,739 for the comparable period in 1998. The decrease 
was primarily due to the sale of OES.

       Cost of rental revenues in the 1998 first quarter were attributable to 
OES, which was sold in November 1998.

       The Company's gross profit for the first quarter 1999 of $10,422 
(39.3% of sales) increased from the first quarter 1998 gross profit of $8,727 
(49.5% of sales). The gross profit increase was primarily attributable to the 
addition of the Morris and Pryor Projects. The gross profit decrease, as a 
percentage of sales, for the first quarter was primarily attributable to the 
addition of the Morris and Pryor Projects which have lower operating margins 
than the Newark and Parlin Projects. It is expected that competition will 
continue to put pressure on these margins in the future as new projects are 
added.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

       Selling, general and administrative expenses ("SG&A") for the first 
quarter 1999 of $1,683 decreased from first quarter 1998 SG&A expenses of 
$2,107. The decrease was primarily due to lower legal expenses.

INTEREST AND OTHER INCOME

       Interest and other income for the first quarter 1999 of $125 decreased 
from interest and other income of $218 for the comparable period in 1998.

EQUITY IN EARNINGS OF AFFILIATES

       Equity in earnings of affiliates for the first quarter 1999 of $670 
decreased from $1,007 in the comparable period in 1998. The decrease was 
primarily due to combustion and steam turbine outages at the Grays Ferry 
facility. 1999 equity earnings include income of $341 to true up estimated 
earnings recorded by the Company in the 1998 fourth quarter. As a result of 
the Grays Ferry and PECO settlement, CogenAmerica will record a one-time gain 
in the second quarter of 1999 based upon the fair market value of the 
additional ownership interest. Management currently estimates the after-tax 
gain will be approximately $5 to $6 million.

                                       16
<PAGE>

INTEREST AND DEBT EXPENSE

       Interest and debt expense for the first quarter 1999 of $5,706 
increased from interest and debt expense of $3,553 for the comparable period 
in 1998. The increase was primarily attributable to the financing of the 
Pryor and Morris Projects, both of which were acquired and commenced 
commercial operations, respectively in the fourth quarter of 1998.

INCOME TAXES

       Income tax expense for the first quarter of 1999 of $ 1,428 decreased 
from $1,619 for the comparable period in 1998. The decrease was primarily due 
to lower pre-tax earnings.

       The consolidated effective tax rate for the quarters ended March 31, 
1999 and 1998 was 37.3% and 37.7%, respectively.

LIQUIDITY AND CAPITAL RESOURCES

       The development, construction and operation of cogeneration projects 
and other power generation facilities requires significant capital. 
Historically, the Company has employed substantial leverage at both the 
project and parent company level to finance its capital requirements. Debt 
financing at the project level is typically nonrecourse to the parent. 
Nonrecourse project financing agreements usually require initial equity 
investments at the project level. The Company has financed such equity 
investments through cash generated from operations and other borrowings, 
including borrowings at the parent level.

       Almost all of the Company's operations are conducted through 
subsidiaries and other affiliates. As a result, the Company depends almost 
entirely upon their earnings and cash flow to service consolidated 
indebtedness, including indebtedness of the parent, CogenAmerica. The 
nonrecourse project financing agreements of certain subsidiaries and other 
affiliates generally restrict their ability to pay dividends, make 
distributions or otherwise transfer funds to the parent prior to the payment 
of other obligations, including operating expenses, debt service and reserves.

       At March 31, 1999, cash and cash equivalents totaled $4,338 and 
restricted cash totaled $15,364. The restricted cash primarily represents 
escrow funds required by the terms of credit agreements for the Newark, 
Parlin and Morris projects.

       Cash provided by (used in) operating activities was $(371) and $2,479 
for the three months ended March 31, 1999 and 1998, respectively. Cash 
provided by operating activities decreased primarily due to accounts 
receivable balances relating to the Morris Project.

       Cash used in investing activities was $5,292 and $25,319 for the three 
months ended March 31, 1999 and 1998 respectively. Cash used by investing 
activities during the first quarter of 1999 primarily represents net deposits 
of $3,221 into restricted cash accounts as required by certain credit 
agreements.

       Cash provided by financing activities was $6,433 and $24,375 for the 
three months 

                                       17
<PAGE>

ended March 31, 1999 and 1998, respectively. During the first quarter of 
1999, proceeds from long-term debt totaled $12,874 consisting of loans due 
NRG Energy related to the Morris Project. Repayments of long-term debt 
totaled $6,780.

       In May 1996, the Company's wholly-owned subsidiaries CogenAmerica 
Newark and CogenAmerica Parlin entered into a credit agreement (the "Newark 
and Parlin Credit Agreement") which established provisions for a $155,000 
fifteen-year loan and a $5,000 five-year debt service reserve line of credit. 
The loan is secured by all of CogenAmerica Newark's and CogenAmerica Parlin's 
assets and a pledge of the capital stock of such subsidiaries. The Company 
has guaranteed repayment of $21,775 of the amount outstanding under the 
Credit Agreement. The interest rate on the outstanding principal is variable 
based on, at the option of CogenAmerica Newark and CogenAmerica 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 the Newark and Parlin Credit 
Agreement, CogenAmerica Newark and CogenAmerica 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 at 6.9% plus the margin. At 
March 31, 1999, the principal amount outstanding under the credit agreement 
was $132,524.

       CogenAmerica Schuylkill, a wholly-owned subsidiary of the Company, 
owned as of March 31, 1999, a one-third partnership interest in the Grays 
Ferry Project which commenced operation in January 1998. CogenAmerica's 
partnership interest increased to 50% on April 23, 1999. See "Part I - Item 
1. - Subsequent Events." In March 1996, the Grays Ferry Partnership entered 
into a credit agreement with Chase 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 CogenAmerica Schuylkill the funding, if 
needed, for the CogenAmerica Schuylkill capital contribution obligation to 
the Grays Ferry Partnership. Prior to December 31, 1997, CogenAmerica 
Schuylkill had borrowed $10,000 from NRG Energy under this loan agreement, of 
which $1,900 remained outstanding to NRG Energy at March 31, 1999.

       In connection with its acquisition of the Morris Project, CogenAmerica 
Funding, a wholly-owned subsidiary of the Company, 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. 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 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). In addition, 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-borrowers) 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. 
Effective November 30, 1998 the Company and NRG Energy agreed to a First 
Amendment to the Supplemental Loan Agreement that allowed the Company to 
contribute the $22,000 of 

                                       18
<PAGE>

equity in installments to match the construction draw payments. At March 31, 
1999, the entire $22,000 had been drawn and contributed as equity. The 
Supplemental Loan Agreement calls for an interest rate of prime plus 1.5%. 
Effective with the First Amendment the interest rate was changed to prime 
plus 3.5% until the possible event of default related to the Grays Ferry 
Project had been eliminated. On February 16, 1999 NRG Energy agreed to reduce 
the interest rate under the loan back to prime plus 1.5%. This adjustment was 
made effective January 1, 1999. At March 31, 1999, $21,069 was due NRG Energy 
under the Supplemental Loan Agreement.

       On September, 15, 1997, Morris LLC (which was at that time an 
affiliate of NRG Energy) entered into a $91,000 construction and term loan 
agreement (the "Agreement") to provide nonrecourse project financing for a 
major portion of the Morris Project. The Company assumed the Agreement in 
December 1997 upon acquiring Morris LLC. The Agreement provides $85,600 of 
20-month construction loan commitments and $5,400 in letter of credit 
commitments (the "LOC Commitment"). Upon satisfaction of all completion 
criteria as set forth in the Agreement, the construction loan is due and 
payable or, if certain criteria are satisfied, may be converted to a five 
year term loan based on a 25-year amortization with a balloon payment at 
maturity. Interest on the construction loan is variable based on, at the 
Company's option, either the base rate, as defined in the Agreement, or LIBOR 
plus 0.75%. The interest rate resets based on the Company's selection of the 
borrowing period ranging from one to six months. Borrowings are secured by 
CogenAmerica Funding's ownership interest in Morris LLC, its cash flows, 
dividends and any other property that CogenAmerica Funding may be entitled to 
as owner of Morris LLC. At March 31, 1999, $84,305 was outstanding under the 
construction loan and no amounts were pledged under the LOC Commitment.

       On December 17, 1997, the Company entered into the MeesPierson Credit 
Agreement providing for a $30,000 reducing revolving credit facility. The 
facility is secured by the assets and cash flows of the PWD Project as well 
as the distributable cash flows of the Parlin and Newark 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 PWD Project and $1,500 for general 
corporate purposes. The MeesPierson 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 resulted in a cross default under the MeesPierson Credit 
Agreement. On August 14, 1998 the lender agreed to waive the default until 
July 1, 1999 by imposing a 2.0% increase in the interest rate effective 
October 1, 1998. On February 12, 1999 the lender agreed to a permanent waiver 
of the Grays Ferry Project cross default and eliminated the 2.0% increase in 
the interest rate effective January 1, 1999. The Company also reduced the 
size of the facility to $25,000. The repayment of the $25,000 is due in full 
on December 17, 2000.

       The Company's principal credit agreements (including the Newark and 
Parlin Credit Agreement) include cross-default provisions that generally 
permit its lenders to accelerate the indebtedness owed thereunder, to decline 
to make available any additional amounts for borrowing thereunder, and to 
exercise certain other remedies in respect of any collateral securing such 
indebtedness in the event certain defaults or other adverse events occur 
under certain other instruments or agreements (including 

                                       19
<PAGE>

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. As a result, a default under one such other instrument or agreement 
could have a material adverse effect on the Company by causing one or more 
cross-defaults to occur under one or more of the Company's principal credit 
agreements, potentially having one or more of the effects set forth above and 
otherwise adversely affecting the Company's liquidity and capital position.

       During 1998 the Company incurred approximately $1,001 of third-party 
costs related to a capital markets financing transaction expected to be 
completed during 1999. These costs have been deferred and are included in the 
balance sheet as "Deferred financing costs, net." If the Company elects to 
pursue an alternative financing, such as through the commercial bank market, 
or if the financing currently contemplated for the capital markets is 
indefinitely delayed or discontinued, the Company will be required to expense 
the financing costs that have been deferred.

       In October 1998, NRG Energy loaned the Company and CogenAmerica Pryor 
approximately $23,900 to finance the acquisition of the Pryor Project. The 
loan is a six-year term facility calling for principal and interest payments 
on a quarterly basis, based on project cash flows. The interest rate on the 
note relating to such loan was initially set at prime rate plus 3.5% and such 
rate reduces by two percentage points upon the occurrence of certain events 
related to elimination of default risk under the loan. On February 16, 1999 
NRG Energy agreed to reduce the interest rate under the loan to prime plus 
1.5%. This adjustment was made effective January 1, 1999. At March 31, 1999, 
$23,415 was due NRG Energy under the loan.

YEAR 2000

       The Year 2000 issue refers generally to the data structure problem 
that may prevent systems from properly recognizing dates after the year 1999. 
The Year 2000 issue affects information technology ("IT") systems, such as 
computer programs and various types of electronic equipment that process date 
information by using only two digits rather than four digits to define the 
applicable year, and thus may recognize a date using "00" as the year 1900 
rather than the year 2000. The issue also affects some non-IT systems, such 
as devices which rely on a microcontroller to process date information. The 
Year 2000 issue could result in system failures or miscalculations, causing 
disruptions of a company's operations. Moreover, even if a company's systems 
are Year 2000 compliant, a problem may exist to the extent that the data that 
such systems process is not.

       The following discussion contains forward-looking statements 
reflecting management's current assessment and estimates with respect to the 
Company's Year 2000 compliance efforts and the impact of Year 2000 issues on 
the Company's business and operations. Various factors, many of which are 
beyond the control of the Company, could cause actual plans and results to 
differ materially from those contemplated by such assessments, estimates and 
forward-looking statements. Some of these factors include, but are not 
limited to, representations by the Company's vendors and counterparties, 
technological advances, economic considerations and consumer perceptions. The 
Company's Year 2000 compliance program is an ongoing process involving 
continual evaluation and may be subject to change in response to new 
developments.

                                       20
<PAGE>

       THE COMPANY'S STATE OF READINESS

       The Company has implemented a Year 2000 compliance program designed to 
ensure that the Company's computer systems and applications will function 
properly beyond 1999. The Company believes that it has allocated adequate 
resources for this purpose and expects its Year 2000 conversions to be 
completed on a timely basis. In light of its compliance efforts, the Company 
does not believe that the Year 2000 issue will materially adversely affect 
operations or results of operations, and does not expect implementation to 
have a material impact on the Company's financial statements. However, there 
can be no assurance that the Company's systems will be Year 2000 compliant 
prior to December 31, 1999, or that the failure of any such system will not 
have a material adverse effect on the Company's business, operating results 
and financial condition. In addition, to the extent the Year 2000 problem has 
a material adverse effect on the business, operations or financial condition 
of third parties with whom the Company has material relationships, such as 
vendors, suppliers and customers, the Year 2000 problem could have a material 
adverse effect on the Company's business, results of operations and financial 
condition.

       IT SYSTEMS. The Company has reviewed and continues to review all of 
its IT systems as they relate to the Year 2000 issue. The Company's 
accounting system has been upgraded to alleviate any potential Year 2000 
issues. The Company outsources its human resource and payroll systems and is 
in the process of working with the outside vendor to identify and correct any 
potential Year 2000 issues. This process is expected to be complete and any 
changes implemented by December 31, 1999. The Company's billing systems are 
either provided by the customer or are performed internally on microcomputer 
systems. In these cases, the collection of data is the most important feature 
and any impact from a Year 2000 issue is expected to be immaterial.

       NON-IT SYSTEMS. As indicated above, the Company is dependent upon some 
of its customers for billing data related to the amount of electricity and 
steam sold and delivered during the month. For the most part, the collection 
of this data is done mechanically rather than electronically. Only data 
storage is managed electronically. The collection of this data also occurs 
within the control systems of the Company's various facilities. The Company 
has requested that the control system vendors audit their software to 
identify any potential Year 2000 issues and provide recommendations for 
alleviating any potential problems. This process has been completed for all 
of the Company's facilities and the various solutions have been implemented. 
The Company does not believe that any further upgrades, if necessary, will be 
material to its financial condition or results of operation.

       YEAR 2000 ISSUES RELATING TO THIRD PARTIES. As described above, the 
Company, in some cases, is dependent upon certain customers to provide 
billing data. However, the Company also captures and processes this data as a 
redundancy. The Company's control systems have been upgraded as described 
above and the Company does not believe that any loss of data will occur due 
to a Year 2000 issue. In addition, the Company's third parties are major 
utilities and sophisticated industrial concerns who are participants in 
sophisticated Year 2000 readiness programs. The Company has participated in 
vendor surveys to determine the readiness of various Company systems for any 
potential Year 2000 issues. In addition, the Company has obtained written 
disclosure from a number of vendors relating to their Year 2000 preparedness.

                                       21
<PAGE>

       COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUES

       The Company's costs to review and assess the Year 2000 issue have not 
been material. The Company believes that its future costs to implement Year 
2000 solutions will also be immaterial to the financial statements.

       THE RISKS OF THE COMPANY'S YEAR 2000 ISSUES

       The Company believes that its most likely Year 2000 worst case 
scenario would be the loss of billing data to utilities and industrial 
companies which purchase the Company's electricity and steam. This billing 
information, as explained above, is also captured by the Company's control 
systems at its various facilities.

       THE COMPANY'S CONTINGENCY PLANS

       As described above, the contingency plan for the loss of billing data 
is to use the data provided by the Company's internal control systems which 
are in the process of being upgraded to eliminate any Year 2000 issues.

NEW ACCOUNTING STANDARDS

       In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative 
Instruments and Hedging Activities". SFAS No. 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 No. 133 
will have on its earnings or financial position, but it may increase earnings 
volatility.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       The Company's market risk is primarily impacted by changes in interest 
rates and changes in natural gas prices. The Company's market risk has not 
materially changed from that reported in Part II, Item 7a, of the Company's 
Report on Form 10-K for the year ended December 31, 1998.

                                       22
<PAGE>

                                     PART II

                                OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

       GRAYS FERRY COGENERATION PARTNERSHIP. Trigen-Schuylkill Cogeneration, 
Inc., NRGG (Schuylkill) Cogeneration, 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 matter was 
previously reported in the Company's Report on Form 10-K for the year ended 
December 31, 1998. On April 23, 1999 the Grays Ferry Cogeneration Partnership 
("Grays Ferry") and PECO Energy Company ("PECO") reached a final settlement 
of this litigation. The settlement calls for PECO and Grays Ferry to 
specifically perform their existing Power Purchase Agreements ("PPAs"), as 
amended, under an order from the Court. This includes PECO paying for 
capacity and electrical energy purchases from Grays Ferry at the specific 
contract prices set out in the PPAs for the 1998-2000 time period. The energy 
pricing under the original terms of the PPAs, after the year 2000 was based 
upon a percentage of the PJM market price, which is the local wholesale 
market price. This market-based pricing is expected to produce substantially 
lower revenues than the more favorable rates of the early contract years. As 
part of the settlement the PPAs were amended to modify the percentage of the 
PJM market price to lessen the impact in the early years of market-index 
pricing. Under the terms of the settlement, PECO will also transfer its 
one-third ownership interest in the 150-megawatt project to Grays Ferry. As a 
result, CogenAmerica and Trigen Energy Corporation's respective interest in 
Grays Ferry will increase from 33% to 50%. PECO will transfer its interest to 
Grays Ferry at no cost. The transfer is effective with the final settlement 
on April 23, 1999.

       The Company is subject from time to time to various other claims that 
arise in the normal course of business, and management believes that the 
outcome of any such matters as currently may be pending (either individually 
or in the aggregate) will not have a material adverse effect on the business 
or financial condition of the Company.




                                       23
<PAGE>

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

                On March 30, 1999, the Company filed a Report on Form 8-K/A
                dated October 9, 1998, which amended a Report on Form 8-K filed
                October 26, 1998, for the purpose of filing financial statements
                required under Item 7.





                                       24
<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: May 10,1999             By: /s/ Timothy P. Hunstad
                                  ------------------------------------------
                                              Timothy P. Hunstad
                                  VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
                                     (Principal Financial Officer and Duly 
                                             Authorized Officer)





                                       25
<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<S>      <C>
3.1      Amended and Restated Certificate of Incorporation of the Company filed
         as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the
         fiscal 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.

10.1     Agreement dated January 31, 1999 between the Company and Timothy P.
         Hunstad, Vice President and Chief Financial Officer.

10.2     Agreement dated January 31, 1999 between the Company and Richard C.
         Stone, Vice President Business Development and Marketing.

10.3     Agreement of Employment dated as of May 1, 1999 between the Company and
         Julie A. Jorgensen, President and Chief Executive Officer.

10.4     Second Amendment Agreement dated as of April 23, 1999 between Grays
         Ferry Cogeneration Partnership and PECO Energy Company.

27       Financial Data Schedule for the three months ended March 31, 1999 (for
         SEC filing purposes only).
</TABLE>





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