SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended December 31, 2000

                           Commission File No. 0-24143

                        RIDGEWOOD ELECTRIC POWER TRUST V
             (Exact Name of Registrant as Specified in Its Charter)

        Delaware                           22-3437351
(State or Other Jurisdiction             (I.R.S. Employer Identification No.)
of Incorporation or Organization)

  c/o Ridgewood Power Corporation, 947 Linwood Avenue, Ridgewood, New Jersey
07450
  (Address of Principal Executive Offices)                        (Zip Code)

Registrant's Telephone Number, including Area Code:  (201) 447-9000

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

Investor Shares of Beneficial Interest
(Title of Class)

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[X]

     There is no market for the Shares. The aggregate capital contributions made
for the Registrant's  voting Shares held by  non-affiliates of the Registrant at
March 30, 2001 was $93,288,750.

Exhibit Index is located on page 53.
<PAGE>

PART I

Item 1.  Business.

Forward-looking statement advisory

         This Annual Report on Form 10-K, as with some other  statements made by
the Trust from time to time, has  forward-looking  statements.  These statements
discuss business trends and other matters relating to the Trust's future results
and the business climate.  In order to make these statements,  the Trust has had
to make assumptions as to the future.  It has also had to make estimates in some
cases about events that have already  happened,  and to rely on data that may be
found to be inaccurate at a later time. Because these forward-looking statements
are based on assumptions, estimates and changeable data, and because any attempt
to predict the future is subject to other  errors,  what happens to the Trust in
the future may be materially different from the Trust's statements here.

     The Trust  therefore  warns  readers of this  document that they should not
rely on these  forward-looking  statements without considering all of the things
that could make them  inaccurate.  The Trust's other filings with the Securities
and Exchange  Commission and its Confidential  Memorandum  discuss many (but not
all) of the risks and  uncertainties  that might  affect  these  forward-looking
statements.

     Some of these are changes in political and economic conditions,  federal or
state  regulatory  structures,   government  taxation,  spending  and  budgetary
policies,  government  mandates,  demand for electricity and thermal energy, the
ability of customers to pay for energy  received,  supplies and prices of fuels,
operational status of plant,  mechanical  breakdowns,  availability of labor and
the  willingness  of  electric  utilities  to perform  existing  power  purchase
agreements in good faith.  Some of these cautionary  factors that readers should
consider are  described  below at Item 1(c)(4) - Trends in the Electric  Utility
and Independent Power Industries.

     By making these  statements  now, the Trust is not making any commitment to
revise these forward-looking  statements to reflect events that happen after the
date of this document or to reflect unanticipated future events.

(a)  General Development of Business.

    Ridgewood  Electric Power Trust V, the  Registrant  hereunder (the "Trust"),
was organized as a Delaware  business  trust on March 12, 1996 to participate in
the  development,  construction  and operation of independent  power  generating
facilities  ("Independent  Power  Projects" or "Projects")  and similar  capital
projects (also,  "Projects").  Ridgewood Energy Holding Corporation  ("Ridgewood
Holding"), a Delaware corporation, is the Corporate Trustee of the Trust.

     The Trust sold whole and  fractional  shares of beneficial  interest in the
Trust  ("Investor  Shares") at $100,000 per Investor  Share,  and terminated its
private  placement   offering  on  April  15,  1998.  It  raised   approximately
$93,000,000.  Net of offering  fees,  commissions  and  expenses,  the  offering
provided  approximately  $76,000,000  for  investments  in the  development  and
acquisition of Independent Power Projects and operating expenses.  The Trust has
approximately  1613 holders of Investor Shares (the  "Investors").  As described
below in Item  1(c)(3),  as of  December  31,  2000 the  Trust had  invested  or
expended  substantially all of its funds in the acquisition of interests in four
sets of Independent Power Projects and in five other Projects.

         The  Trust  is  organized  to  be  similar  to a  limited  partnership.
Ridgewood Power LLC (the "Managing Shareholder"), a Delaware corporation, is the
Managing Shareholder of the Trust. For information about the merger of the prior
Managing Shareholder, Ridgewood Power Corporation, into Ridgewood Power LLC, see
Item 10(b) -  Directors  and  Executive  Officers of the  Registrant  - Managing
Shareholder.

     In general, the Managing Shareholder has the powers of a general partner of
a limited  partnership.  It has complete control of the day-to-day  operation of
the Trust and as to most  acquisitions.  The Trust also has an Independent Panel
which does not  exercise  general  oversight of the  Managing  Shareholder.  The
Independent  Panel Members do not have any management or  administrative  powers
over the Trust or its  property,  but approval of a majority of the  Independent
Panel  Members is required  for approval of  transactions  between the Trust and
other investment programs sponsored by the Managing  Shareholder.  The Corporate
Trustee  acts  on  the  instructions  of  the  Managing  Shareholder  and is not
authorized to take independent  discretionary action on behalf of the Trust. See
Item 10 - Directors and Executive Officers of the Registrant below for a further
description of the  management of the Trust.  The Managing  Shareholder  and the
Investors are collectively referred to as the "Shareholders."

     The Managing  Shareholder  is controlled  by Robert E. Swanson,  who is its
controlling equity owner, sole manager and chief executive officer.

     The Trust has a Corporate  Trustee,  Ridgewood Energy Holding  Corporation.
The Corporate  Trustee acts on the instructions of the Managing  Shareholder and
is not  authorized  to take  independent  discretionary  action on behalf of the
Trust. See Item 5 - Directors and Executive Officers of the Registrant below for
a further description of the management of the Trust.

         Robert E.  Swanson and certain  Swanson  family  trusts own 100% of the
equity of the following entities:

o Ridgewood Securities Corporation - Placement Agent ("Ridgewood Securities");
o Ridgewood Power Management, LLC - Operates the Projects owned by the Trust and
six other trusts ("RPM");
o  Ridgewood  Power  LLC -  Managing  Shareholder  of seven  trusts  ("Ridgewood
Power");
o Ridgewood Energy Holding  Corporation - Corporate  Trustee for all six trusts;
and
o Ridgewood  Capital  Management LLC - A marketing  affiliate and manager of six
venture capital funds ("Ridgewood Capital").

     Mr.  Swanson has sole voting and  investment  power over the Swanson family
trusts and is the sole manager, chief executive officer of the above entities.

         In  addition,  the  Trust  is  affiliated  with  the  following  trusts
organized by the Managing Shareholder:

o Ridgewood Electric Power Trust I ("Power I");
o Ridgewood Electric Power Trust II ("Power II");
o Ridgewood Electric Power Trust III ("Power III");
o Ridgewood Electric Power Trust IV ("Power IV");
o The Ridgewood Power Growth Fund (the "Growth Fund"); and
o Ridgewood/Egypt Fund ("Egypt Fund").

 (b)  Financial Information about Industry Segments.

     The  Trust  operates  in  only  one  industry  segment:  independent  power
generation and similar projects.

(c)  Narrative Description of Business.

(1)  General Description.

     The Trust was formed to participate in the  development,  construction  and
operation of Independent  Power Projects that generate  electricity  for sale to
utilities and other users,  and that might provide heat energy as well to users.
The Trust may also  invest  in other  projects  or  capital  projects  that have
similar  risk-return  characteristics  to those of independent  power  projects.
These  projects or  potential  investments  for the Trust will be referred to as
"Projects."

     The Maine Hydro  Projects are 14 small  hydroelectric  projects  located in
Maine.  In December 1996 the Trust and an  affiliate,  Power IV, each acquired a
50% interest in the limited  liability  company owning the Projects.  On July 1,
1997, the Trust and Power IV purchased a preferred membership interest in Indeck
Maine Energy,  L.L.C.,  an Illinois limited  liability  company ("Indeck Maine")
that owns two electric power  generating  stations  fueled by waste wood at West
Enfield and at Jonesboro, Maine (the "Maine Biomass Projects").

         On  June  4,  1999,  the  Trust  entered  into   agreements   with  the
stockholders of Combined Landfill Projects Limited ("CLP"), of London,  England,
for a $13.6 million  purchase of 100% of the equity  interest in four  operating
landfill gas power plants and one plant in the late stages of  construction,  as
well as the rights to develop and  construct  another 20 landfill  gas plants in
Great Britain (the "United Kingdom Landfill Projects"). The transfer closed June
30, 1999. In January 2000, the Growth Fund purchased a small equity  interest in
such projects.

         The Trust and the  Growth  Fund have also  funded  Ridgewood  Near East
Holdings,  LLC, a New Jersey limited liability company that has invested a total
of $24.7 million  through March 30, 2001 in developing  electric  generation and
distribution  systems and water purification  systems at Egyptian tourist resort
complexes  on the  coasts  of the Red Sea and  Sinai  Peninsula  (the  "Egyptian
Projects").  The Egyptian Projects  currently consist of four operating electric
generating plants and 11 operating water desalination  plants.  Four other water
desalination  plants and two electric  generating plants are under  construction
and are expected to be in  operation  by summer 2001.  When all these plants are
completed, the Egyptian Projects will have a total capacity of 23.4 megawatts of
electricity and 3,300,000 gallons a day of drinking water.

      The  Maine  Hydro  Projects  and  Maine  Biomass  (Indeck)   Projects  are
Qualifying Facilities.  Historically,  producers of electric power in the United
States  consisted of regulated  utilities  serving end use retail  customers and
certain  industrial users that produced  electricity to satisfy their own needs.
The  independent  power  industry  in the United  States was  created by federal
legislation  passed in  response to the energy  crises of the 1970s.  The Public
Utility  Regulatory  Policies  Act  of  1978,  as  amended  ("PURPA"),  requires
utilities to purchase electric power from "Qualifying Facilities" (as defined in
PURPA),  including  "cogeneration  facilities" and "small power  producers," and
also exempts  these  Qualifying  Facilities  from most federal and state utility
regulatory  requirements,  including the Public Utility  Holding  Company Act of
1935, as amended.  Furthermore,  PURPA generally  requires electric utilities to
purchase electricity produced by Qualifying  Facilities at the utility's avoided
cost of producing  electricity  (i.e.,  the incremental  costs the utility would
otherwise  face to  generate  electricity  itself or purchase  electricity  from
another source).  The Maine Hydro Projects are Qualifying  Facilities which have
long-term  agreements  with local  utilities  for the  purchase  of all of their
output ("Power  Contracts") at fixed prices. The Maine Biomass Projects are also
Qualifying Facilities but do not have long-term Power Contracts.

     The Trust also  invested in five  Projects  outside the  independent  power
industry:  Santee River Rubber Company, which is a facility in South Carolina to
recycle used auto and truck tires;  Ridgewood  WaterPure  Corporation,  which is
developing technologies to distill water efficiently;  MetaSound, Inc., which is
developing  hardware and software to present unique  programming for persons who
are on hold while calling  businesses;  Quantum  Conveyor  Systems,  Inc., which
developed and marketed proprietary  conveyor and package sorting equipment;  and
Global Fiber Group, which was planning to construct a fiber optic communications
cable under the western  portion of the  Mediterranean  Sea (the  "Mediterranean
Fiber Optic Project"). The Trust has written off all of these investments except
Ridgewood WaterPure Corporation.

(2)      The Trust's Investments.

         (i)      Maine Hydro Projects

         On December 23, 1996, the Trust purchased from Consolidated Hydro, Inc.
a 50% interest in 14 small hydroelectric  projects located in Maine. In order to
increase  diversification  of the Trust's  investments,  Power IV purchased  the
remaining  50%  interest.  Each  Trust  paid  approximately  $6,700,000  for its
interest. The jointly owned partnership that acquired the Project also assumed a
lease obligation in the amount of $1,005,000.

         The 14 hydroelectric  projects have an aggregate rated capacity of 11.3
megawatts.  All  electricity  generated by the projects over and above their own
requirements  is sold to either  Central  Maine  Power  Company or Bangor  Hydro
Company under long-term power purchase contracts. Eleven of the contracts expire
at the end of 2008  and the  remaining  three  expire  in 2007,  2014 and  2017.
Certain of the contracts are subject to price re-determinations in 2001 based on
the Maine Public Utilities Commission's computations of avoided cost.

         The Trusts have  entered  into a five year  operating  and  maintenance
agreement  with CHI Energy,  Inc.  under which a  subsidiary  of CHI Energy will
manage and administer the projects for a fixed annual fee of $307,500  (adjusted
upwards for inflation),  plus an annual incentive fee equal to 50% of the excess
of aggregate net cash flow over a target amount of $1.875  million per year. The
maximum  incentive  fee is $112,500 per year;  to the extent the annual net cash
flow exceeds $2.1 million,  the excess will be carried  forward to future years;
to the extent  that the annual net cash flow is less than  $1.875  million,  the
deficit will be carried forward to future years. In addition,  the operator will
be reimbursed for certain  operating and  maintenance  expenses.  The agreements
have a five-year  term,  expiring on June 30, 2001,  and can be extended for two
additional five-year terms by mutual consent.

 (ii) Maine Biomass Projects

         On July 1, 1997, the Trust and Power V purchased a preferred membership
interest in Indeck Maine Energy,  L.L.C.,  an Illinois limited liability company
("Indeck  Maine") that owns two electric  power  generating  stations  fueled by
waste  wood at West  Enfield  and at  Jonesboro,  Maine.  The  Trust and Power V
purchased  the interest  through a limited  liability  company  owned equally by
each.  The  Trust's  share of the  purchase  price  was  $7,298,000  and Power V
provided an equal amount of the total purchase price.

         Indeck Energy Services,  Inc.  ("Indeck"),  an entity unaffiliated with
the  Trust,  Power V or any of  their  affiliates,  owns the  junior  membership
interest in Indeck Maine. The preferred  membership  interest entitles the Trust
and Power V to receive  all net cash flow from  operations  each year until they
receive an 18% annual cumulative return on their capital contributions to Indeck
Maine.  Any  additional  net operating  cash flow in that year is paid to Indeck
until the total paid to it equals the amount of the 18% preferred  return to the
Trust and Power V for that year, without cumulation. Any remaining net operating
cash flow for the year is payable 25% to the Trust and Power V together  and 75%
to  Indeck,   unless  the  Trust  and  Power  V  have  recovered  their  capital
contributions  from proceeds of a capital event.  Thereafter,  these percentages
change to 50% each.  All  non-operating  cash flow,  such as proceeds of capital
events, is divided equally between (a) the Trust and Power V and (b) Indeck.

         Prior to March 1,  1999,  Indeck  Operations,  Inc.,  an  affiliate  of
Indeck,  managed  the plant and was  reimbursed  for its costs,  pursuant  to an
amended operating  agreement.  However,  by agreement of the Parties,  effective
March 1, 1999,  operating  control of the Projects was  transferred to the Trust
and Power V.  Subsequently,  the Trust and Power V engaged  RPM to  operate  the
Projects. RPM currently operates the Projects and charges its expenses to Indeck
Maine at its cost.

         Each of the Projects has a 24.5 megawatt  rated capacity and uses steam
turbines to generate electricity.  The fuel is waste wood chips, bark, brush and
similar  biomass.  Both projects are  Qualifying  Facilities.  The Maine Biomass
Projects are members of the New England Power Pool ("NEPOOL"), an association of
New England generators,  transmission utilities,  distribution utilities,  power
marketers and others.  NEPOOL's function is to run the New England electric grid
reliably and to reduce electric costs and  uncertainties.  NEPOOL's  control and
market  regulation  responsibilities  are managed by ISO-New  England,  Inc., an
independent, non-profit management company.

         Due to the high  costs  associated  with  their  operation,  the  Maine
Biomass  Projects are  generally  operated as peak load plants on those few days
per year  (typically  during summer heat waves) when there are power and reserve
shortages  in New  England.  During the rest of the year,  the Projects are shut
down but are capable of being restarted on several days' advance notice. Because
the  Projects are capable of  providing  electricity,  they are entitled to sell
their "installed capability," or "ICAP", a measurement of the rated ability of a
generating  plant to create  electric  power.  Power  plants are  credited  with
installed  capability  whether or not they run. A member of NEPOOL  that  serves
load (i.e.,  electric consumers) must own or purchase installed  capability on a
monthly  basis that at least equals its expected load for the month (the maximum
amount  of  power  that  its  customers  may  demand)  plus  mandated  reserves.
Generating  facilities may enter into contracts to sell installed  capability or
were able to purchase it through ISO auction.  However,  on June 28,  2000,  the
Federal Energy Regulatory Commission ("FERC") issued an order that permitted the
ISO to eliminate the ICAP auction market,  indicating that in effect the auction
was not  useful  and  tended  to  create  inflated  prices  for  ICAP.  The ICAP
requirement,  however,  was not  eliminated  and the ISO,  in response to FERC's
order,  instituted an  administratively  determined sanction for failure to have
sufficient ICAP and a ICAP deficiency charge.  Effective August 1, 2000, the ISO
ICAP  deficiency  charge was $.17  kw/month,  thereby  making  ICAP  essentially
worthless.  The ISO action was challenged and FERC  reinstated an $8.75 kw/month
ICAP deficiency  charge that had been  previously used by NEPOOL.  On rehearing,
the FERC  determined  that the $.17  kw/month  charge would apply for the period
August 1, 2000 through April 1, 2001, and then the $8.75 deficiency charge would
apply.  The effect of these  proceedings,  is that  subsequent to April 1, 2001,
ICAP will have a significant  market value and will be a valuable  product to be
sold by the  Maine  Biomass  Projects.  The  Projects  sold  ICAP in 2000 to one
utility buyer and earned revenues of approximately $1,000,000.

         With respect to sales of electric energy,  on November 28, 2000, Indeck
Maine entered into a "Power Sales  Confirmation  Agreement"  with  Constellation
Power Source, Inc.,  ("Constellation")  pursuant to which Indeck Maine will sell
power to  Constellation  from the West Enfield  Facility for a period  beginning
June 1, 2001 through  February 28, 2002.  The sale to  Constellation  is a "unit
contingent sale" meaning  essentially that Indeck Maine is not obligated to sell
and deliver power to  Constellation  if the West Enfield Facility is not capable
of producing such power. Moreover, Indeck Maine still has the Jonesboro Facility
uncommitted  and  available  for  sales  to the  ISO  during  peak  periods.  In
anticipation  of such sales,  Indeck Maine has begun certain  major  maintenance
activities  such as replacing the boiler control system and making certain other
repairs.  The budget for such maintenance for both facilities is estimated to be
$740,000,  but cost projections indicate that such maintenance will be completed
below budgeted costs.

         Indeck Maine funded the approximately  $1.1 million  difference between
the Maine Biomass  projects'  revenues and operating  expenses by borrowing from
its  members.  The Trust  provided 25% of the loans,  Power IV also  provided an
equal 25% and the remaining  50% was provided by Indeck,  all on the same terms.
Indeck Maine issued demand  promissory  notes bearing interest at 5% per year to
evidence the indebtedness. Neither Indeck nor its affiliates are affiliated with
or has any  material  relationship  with the  Trust,  Power IV,  their  Managing
Shareholder  or their  affiliates,  directors,  officers or  associates of their
directors and officers.

(iii)  Santee River Rubber Company

         The Trust and Power IV have purchased preferred membership interests in
Santee River Rubber Company,  LLC, a South Carolina  limited  liability  company
("Santee  River").  Santee  River has built a waste tire and  rubber  processing
facility  (the   "Facility")   located  in  Berkeley   County,   South  Carolina
approximately 90 miles north of Charleston,  South Carolina. The Trust and Power
IV purchased the interest through a limited  liability  company owned two-thirds
by the Trust and  one-third  by Power IV. The Trust's  share of the  $13,470,000
purchase  price for the  membership  interest in Santee River was $8,980,000 and
Power IV provided the remaining  $4,490,000 of the price.  The remaining  equity
interest in Santee River is owned by a wholly owned  subsidiary of Environmental
Processing Systems,  Inc. ("EPS") of Garden City, New York. EPS is the developer
of the Facility. EPS provided administrative services to Santee River during the
construction  of the Facility at its cost  (including  direct and indirect costs
and allocable  overhead).  Neither Santee River nor EPS is otherwise  affiliated
with or has any material  relationship with the Trust,  Power IV, their Managing
Shareholder  or their  affiliates,  directors,  officers or  associates of their
directors and officers. EPS contributed the contracts,  permits, plans and other
intangible  property for the  construction  of the Facility  that EPS  generated
prior to this transaction.  Until a default,  EPS has the right to designate two
of three managers of Santee River and effectively controls Santee River.

         At the same time as it sold the  Trust  and  Power IV their  membership
interest,  Santee River borrowed  $16,000,000  through  tax-exempt revenue bonds
sold  to  institutional   investors  and  another  $16,000,000  through  taxable
convertible bonds sold to qualified institutional  purchasers.  It also obtained
$4,500,000  of  subordinated  financing  from  the  general  contractor  for the
Facility,  which is only repayable if the Facility meets specified  construction
and performance criteria.

         The  Facility  was  constructed  by  Bateman  Engineering,   Inc.  (the
"Contractor")   pursuant  to  a  turnkey  construction   agreement  between  the
Contractor and Santee River for a fixed price of $30.5 million. The Contractor's
obligations under the Construction Contract will be guaranteed by its affiliate,
Bateman  Project  Holdings  Limited,  a South African  company.  Pursuant to the
Construction  Contract,  the  Contractor has agreed to defer $4.5 million of its
fixed  construction  price and to receive such amount during the initial 4 years
of Facility operation.

         The  Facility is designed to receive and process  waste tires and other
waste  rubber  products  and produce  fine crumb  rubber of various  sizes.  The
Facility  basically  freezes the tires,  using liquid  nitrogen  obtained from a
nearby  air-processing  plant, shatters the frozen rubber into small pieces, and
grinds and  processes  the pieces to remove  tire  cord,  steel  belts and other
non-rubber materials. The product is crumb-like pieces of rubber. The processing
system  includes both ambient and cryogenic  processing  equipment  using liquid
nitrogen.  In addition,  magnets and other  screening  equipment will be used to
separate and remove  ferrous  material and fibers from the rubber.  Santee River
believes  that the final  crumb  rubber  product  will be fine enough for use in
manufacturing  new tires or to replace virgin rubber in many  applications.  The
Facility is located on an  approximately  30-acre  site (the "Site") in Berkeley
County,  South Carolina owned by Santee River. The Site is mortgaged as security
for the bonds issued for the Facility.

         The Facility's performance test occurred in early August 2000. Although
the test was interrupted  several times due to insufficient  working capital and
problems  with the supply of used tires,  the test was  completed  on August 13,
2000.  However,  due to a severe  lack of capital  and  certain  other  material
problems,  the Project was shut down shortly  thereafter  except for care-taking
activities.  On August 25, 2000,  the Trustee of the  industrial  revenue  bonds
delivered a formal notice of default  declaring Santee River in violation of the
bond  indentures  and requiring that the violations be cured within 30 days. The
violations were not cured.

         During  the later  part of 2000,  the Trust and Power IV made  numerous
proposals to EPS to refinance  Santee River and provide  operational  management
expertise.   Such  proposals  were  rejected  by  EPS.   During  the  course  of
negotiations,  the  Trust and Power IV  became  aware of  possible  questionable
management  practices and other  transactions  involving  EPS.  Accordingly,  on
September 8, 2000, Ridgewood Charleston Rubber, LLC ("Ridgewood Charleston")(the
entity owned by the Trust and Power IV that holds the interest in Santee  River)
filed an action in the U.S.  District  Court for the District of South  Carolina
against  EPS,  its  principals  and certain  affiliates  alleging  self-dealing,
mismanagement,  breach  of  fiduciary  duty and  violation  of the  Racketeering
Influenced  and Corrupt  Organizations  Act  ("RICO").  The Trusts are  claiming
damages in the amount of their invested  capital,  lost profits and other costs.
On December 13, 2000, the Federal District Court Charleston, upon a motion filed
by EPS,  ordered  that all claims  alleged by Ridgewood  Charleston  and pending
before the Court, except for the RICO claims, be submitted to arbitration.

         On October 26, 2000, EPS, on behalf of Santee River, filed a Chapter 11
bankruptcy  proceeding  in U.S.  Bankruptcy  Court  for the  District  of  South
Carolina. The arbitration ordered by the Court has not yet commenced nor has the
litigation  instituted  by  Ridgewood  Charleston  been  stayed or closed in the
bankruptcy proceedings.  Ridgewood Charleston has decided to not actively pursue
discovery and take other actions  regarding  such  litigation or  arbitration in
light of the  bankruptcy  proceedings  and the  discovery  that  the  bankruptcy
Trustee has conducted and is pursuing.

         During  the third  quarter  of 2000,  the Trust  wrote  down its entire
investment in Santee River to zero.

(iv)     Quantum Conveyor Systems, LLC

     Quantum Conveyor Systems, LLC ("Quantum"),  a company located in Northvale,
New Jersey, had developed a process of integrating control technology,  software
and conveying  equipment into a modular,  cost-effective  conveying  system.  By
December  1999  Quantum had nearly  exhausted  its  capital  and was  requesting
additional  funds from its members or bank  lenders.  The  Managing  Shareholder
concluded  that  Quantum's  progress was  insufficient  to justify an additional
investment.  The two managers of Quantum's  five-member  board of managers  that
were appointed by the Trust's  subsidiary,  as well as Quantum's chief financial
officer, an employee of the Managing Shareholder, resigned.

     Quantum continued  operations on a limited scale during 2000 but was unable
to obtain sufficient long-term financing or orders to continue its business.  In
the first quarter of 2000, it ceased all material operations and the Trust wrote
off the entire  investment  for a loss of $2.8  million.  Information  as to the
structure of the Trust's  investment in Quantum is found in the Trust's previous
Annual Reports on Form 10-K.

(v) MetaSound Systems, Inc.

     MetaSound Systems,  Inc. was organized to develop "digital audio marketing"
systems  tied  into  the   Internet.   The  systems  were  designed  to  provide
digital-quality  messages,  music and sound  information to telephone callers on
hold or in a  call-center  queue while they wait or to  shoppers,  visitors  and
others in retail stores and waiting  areas.  Further  information on MetaSound's
business  and the  structure of the Trust's  investment  is found in the Trust's
previous Annual Reports on Form 10-K.

         MetaSound  was  unable  to  attract   sufficient   business  to  become
profitable and the Managing  Shareholder  concluded that additional funding from
the  Trust  was not  appropriate.  MetaSound  unsuccessfully  continued  to seek
additional  equity financing until its capital was exhausted in January 2000. On
December 31, 2000, the Trust wrote off the entire investment in MetaSound.

 (vi) Ridgewood Waterpure

     Ridgewood  Waterpure  Corporation  ("Ridgewood  Waterpure")  is a 54% owned
subsidiary of the Trust that is developing an advanced water distillation system
that  was  previously  developed  by  Superstill   Corporation   ("Superstill").
Superstill,  located  in  California,  became a debtor  under  Chapter 11 of the
Bankruptcy  Code  in  1997.  In  December  1998,  Ridgewood  Waterpure  acquired
substantially all of the assets of Superstill  (consisting primarily of patents,
intellectual  property rights and in-process  research and development)  under a
plan of  reorganization  approved by the U.S.  Bankruptcy Court for the Northern
District of California and Superstill's creditors.

     The Trust  invested  $3,500,000  and acquired 54% of Ridgewood  Waterpure's
common stock.  Creditors and  licensors of  intellectual  property to Superstill
received  the  remaining  46% of the common  stock in exchange  for their claims
against  Superstill.  The Trust's  invested  funds will be used by  Waterpure to
design,  develop and commercialize  water distillation and purification  systems
using the Superstill technology.

     The Trust caused Ridgewood  Waterpure to write off the entire amount of the
acquired  in-process  research  and  development  asset  ($1,970,000)  based  on
generally accepted accounting principles.

     The Trust  leased  manufacturing  space in Oak Harbor,  Ohio and  attempted
during  2000 to  commercialize  the  prototype  water  purification  unit it had
developed in 1999 and early 2000. To date,  WaterPure has been unable to produce
a unit  with a  commercially  acceptable  price and  operating  characteristics.
Although the WaterPure technology produces very pure water, it is more expensive
to build,  more  expensive to power and more  difficult  to maintain  than other
technologies that produce  acceptable  drinking water. The Trust has scaled back
development  efforts and does not expect commercial  production during the first
half  of  2001,  if at all.  The  Trust  is  considering  whether  a sale of the
technology would be advisable.

    The  minority  shareholder  of WaterPure  has brought an action  challenging
WaterPure's rights to license and sell its projects.  If determined adversely to
WaterPure,  this litigation  would have a material adverse effect on WaterPure's
business.

(vii) United Kingdom Landfill Projects

     The Trust and the Growth Fund have organized Ridgewood U.K. LLC, an English
limited  company  ("Ridgewood  U.K.") as a joint  venture  to  acquire  (through
subsidiaries)  certain  operating  landfill gas generating  projects  located in
England and Scotland (the "U.K. Projects").

         To date,  Ridgewood U.K. has acquired 10 U.K.  Projects housing a total
installed  capacity of approximately 20 megawatts.  Ridgewood U.K. also holds an
option to acquire up to an additional 21  developmental  projects  (representing
approximately  22  megawatts)  to the extent that such  additional  projects are
approved by Ridgewood U.K. and successfully completed. The total equity provided
by Ridgewood U.K. to acquire the U.K. Projects is approximately $20 million,  of
which $16  million was  furnished  by the Trust and $4 million was funded by The
Growth Fund. The remaining  portion of the purchase price for the U.K.  Projects
(approximately  $9.5  million)  was  furnished  under a 14 year credit  facility
provided to Ridgewood U.K. subsidiaries by The Bank of Scotland. Ridgewood Power
estimates that seven additional  projects requiring  approximately $5 million in
additional  equity will become  available to Ridgewood  U.K.  through the end of
2001.

         Each of the Trust and the Growth  Fund share an  undivided  interest in
all of the U.K. Projects in proportion to the amounts of capital  contributed by
each of the Trust and the Growth Fund for the acquisition of such projects.

     The  following is a list of the U.K.  Projects  owned by Ridgewood  U.K. at
December 31, 2000:

                                              Installed Capacity
Project Name                 Location           (Megawatts)
------------------------   -------------------      -----

Chelson Meadow .........   Devon, England            2.85
Chelson Meadow II ......   Devon, England            0.95
United Mines ...........   Cornwall, England         2.85
Whiney Hill ............   Lancashire, England       3.10
Belhouse ...............   Essex, England            2.85
Summerston .............   Glasgow, Scotland         2.85
                                                    -----
Total Installed Capacity                            15.45


     Since  January 1, 2001,  Ridgewood  U.K.  has acquired an  additional  four
projects:
                                                 Installed Capacity
Project Name                 Location              (Megawatts)
------------------------   -----------------------      ----

Queens York ............   Lancashire, England          1.64
Beighton ...............   Sheffield, England           0.95
Cotesbach ..............   Leicestershire, England      1.22
Skelbrooke .............   Yorkshire, England           0.95
                                                        ----
Total Installed Capacity                                4.76

         Operations and  maintenance  services for all of the U.K.  Projects are
provided by Ridgewood CLP Management  Limited,  an English limited company owned
by  the  Trust  and by  The  Growth  Fund  ("Ridgewood  Management").  Ridgewood
Management  has  subcontracted  such  responsibilities  to CLP Services  Limited
("CLPS"),  an English  limited  company which is affiliated with the development
company which  developed the projects and sold them to Ridgewood U.K. Under such
subcontract,  CLPS provides all operational and maintenance services for a fixed
amount  (approximately  1.2(cent) per kilowatt hour produced) plus an additional
amount of approximately  $112,000 per year for record keeping and administrative
services  performed for Ridgewood U.K. and the various  subsidiaries  which hold
title to the projects.  Such  subcontract may be terminated by Ridgewood U.K. if
the projects fail to meet certain agreed upon performance  standards (generally,
90% of projected cumulative project output).

(viii) Egyptian Projects

     The Trust and the Growth Fund began investigating Egyptian opportunities in
late 1998. The two Trusts  organized  Ridgewood  Near East Holdings,  LLC, a New
Jersey limited  liability  company  ("Holdings")  as a holding company for their
Egyptian investments and to date have contributed  approximately  $28,250,000 to
Holdings. Each Trust owns equity in Holdings in proportion to the capital it has
contributed.  Holdings in turn owns all of the equity in the Egyptian  operating
subsidiaries,  including Ridgewood Egypt For Infrastructure LTD ("REI").  Donald
Stewart,  who is not an employee of Ridgewood Egypt acts as its consultant.  Mr.
Stewart is reimbursed for his expenses but does not draw a salary. Instead, upon
successful  completion of a development  Project, he receives a commission equal
to 4% of the Project's cost. Since late 1998, the Trust and the Growth Fund have
investigated and developed  projects to supply  electricity and potable water to
the tourist industry on the Red Sea in Egypt. These projects consist of electric
generating  plants  supplying  either a  single  hotel  or a  series  of  hotels
connected by a  distribution  network,  reverse  osmosis  seawater  desalination
plants  supplying  either a single hotel or a series of hotels by a pipeline and
combinations of the above.

     As of January 31, 2001, the Trust and the Growth Fund together had 15 water
plants constructed or under  development,  with a total capacity of 12,530 cubic
meters per day of potable  water  production  (one cubic meter equals 264.2 U.S.
gallons) and 6 electric  generation plants constructed or under development with
a  total  capacity  of  23,400  kilowatts.  When  all of the  Egyptian  Projects
contemplated are fully  completed,  which is estimated to be April 30, 2001, the
total investment in these projects will be approximately $27,265,000. All of the
capital  needed to complete  these 21 projects will be provided by the Trust and
the Growth Fund from proceeds of their private offerings.

    REI has  identified  additional  projects,  which it  considers  to  provide
attractive returns and long-term growth potential. These projects include:

         1) The  acquisition of a water  desalination  plant with a 26 mile long
         pipeline serving  approximately  50% of the area of Sharm El Sheikh, an
         internationally  known  resort  area at the  southern  tip of the Sinai
         peninsula.

         2) The  construction  of a 528,000  gallons per day water  desalination
         plant in  Hurghada,  which  will  serve  small  hotels  and  commercial
         businesses.

         3) The  construction  of a 528,000  gallons per day water  desalination
         plant  and 5  mile  long  pipeline  to  serve  a  multi-hotel,  tourist
         development south of Hurghada.

          4) Expansion of existing  water and  electric  facilities  as existing
     hotels are expanded and new hotels constructed.

     The  Trust  and the  Growth  Fund do not  have  any  additional  funds  for
investments.  Accordingly, the Managing Shareholder has organized the Ridgewood/
Egypt  Fund,  which is  currently  offering  securities.  The funds  raised from
Ridgewood/Egypt's offering will be used to fund these additional Projects.

     REI currently provides several services in Egypt:

o  Construction  of electric  generation  and/or water  desalination  plants for
individual hotels.

o Construction of electric  generation and/or water desalination  plants coupled
with electric  distribution  and/or water  pipelines in new developing  areas to
serve multiple hotels.

o Purchase of existing  electric  generation  and/or water  desalination  plants
operating at existing hotels.

o Long-term operation of these electricity and water facilities.

     REI produces  electric  power with diesel  engine driven  generators  only.
Although  Egypt is a producer of natural gas, the isolated  tourist  areas where
the Egyptian  Projects are located do not have natural gas available in required
quantities. Diesel fuel is readily available throughout Egypt and is supplied at
a fixed price through government agencies. Diesel engine driven generators are a
well-proven technology over eighty years old. There are many qualified suppliers
throughout the world.

     All of REI's water  desalination  plants employ reverse  osmosis  equipment
("R/O").  This is a process  where  seawater or brackish  water (water with less
salt than  seawater but which is not  drinkable or  palatable) is pumped at high
pressure  (1,000  pounds per square inch) through thin,  porous  membranes.  The
pressurized  water passes through but the salt and other large molecules  remain
behind and thus are separated from the purified water.  This process has been in
existence for over thirty years and is widely used  throughout the world.  There
are many suppliers of the R/O equipment and the membranes. The Company primarily
purchases R/O equipment from a U.S. company named Waterlink, because it believes
Waterlink offers the best combination of price, service and quality. However the
Company  is not  dependent  on  Waterlink  and  can  build  plants  using  other
manufacturers' equipment.

     REI's  operating  expenses,  which are charged  against the projects'  cash
flow,  include,  development  and  administrative,   operation  and  maintenance
activities for all of its Egyptian Projects.  Electric generation costs that are
dependent  on  production  volume  include  diesel  fuel,  consumables,   and  a
maintenance  reserve for  preventative  maintenance  and major  repairs.  At the
current  time,  over 80% of those costs are fuel costs.  At current  fuel costs,
which include  delivery,  are fixed by the Egyptian  government  and are uniform
throughout  the  country.  The  fuel  used  to  generate  one  kilowatt-hour  of
electricity costs  approximately 3.2 U.S. cents at current exchange rates. These
estimates  are based on averages  and will vary based on  location,  maintenance
needs, personnel costs and training, and other factors. All of REI's electricity
sales contracts provide for a 100% cost pass-through as the price of diesel fuel
changes.

     The average cost to produce one cubic meter (264.3  gallons) of desalinated
water from seawater,  at current  prices and exchange  rates,  is  approximately
$.0024 per gallon.

     Where REI  supplies  the  electricity  to the  customer,  REI  provides the
electricity  for the R/O  equipment and includes  that  electricity  cost in the
amount  billed for water.  Otherwise,  the customer has the  responsibility  for
providing electric power and bears the risk of electricity price changes.

     Operating  costs for  processing  brackish water are similar except for the
amount of  electricity  used,  which can be as low as 30% of the amount  used to
process  seawater.  Capital  costs  for  brackish  water  processing  tend to be
significantly  lower  because  less capable  equipment  can be used. A R/O water
desalination  plant is  automated  and does not require a full time  operator in
attendance.  Prompt response to problems is important,  however, if the customer
is not to be left without water. REI employs a central team of water specialists
who visit each R/O plant  periodically  to perform  routine  maintenance and who
respond to any problems.

     REI's projects  generally sell their  electricity and drinking water output
under written, long-term contracts governed by Egyptian law. The community water
projects  sell  water  to a number  of  hotels  or  commercial  and  residential
customers.  In those cases, REI sells at a fixed,  published price, which it may
change based on market conditions.  There is no formal regulatory authority that
reviews those prices or which has authority to set them.

    Electricity  and water  contracts  are  generally  include  an annual  price
escalation clause as well as a fuel price adjustment clause to insulate REI from
fuel price  increases.  Most  contracts  are  denominated  in  Egyptian  pounds.
Although  the  buyer  is  therefore  allowed  to pay in  local  currency,  those
contracts  generally  contain a currency  adjustment  clause that is intended to
keep REI whole if the Egyptian  currency  depreciates  against the U.S.  dollar.
Most contracts contain minimum annual purchase requirements.

    (ix) Mediterranean Fiber Optic Project

      In  September  1999,  the Trust and the Growth  Fund  organized  Ridgewood
MedFiber LLC and each of them  contributed  $1.5 million to the joint venture on
equal terms.  Ridgewood  MedFiber  then  invested the $3 million in a 25% equity
interest in Global Fiber Group, a newly organized  developer ("GFG"),  which was
exploring a proposal to construct a 3,600 kilometer (2,200 mile) long underwater
fiber optic cable among Spain,  Southern France and Italy via the  Mediterranean
Sea.

     In February 2000 the original  management,  which had been unable to obtain
additional  equity  financing  for the  Project,  agreed  to  withdraw  from the
venture.  Ridgewood  MedFiber was unable to find other equity  investors for the
venture  and  the  venture  ceased  activity  in the  second  quarter  of  2000.
Accordingly,  the Trust wrote off its entire investment in the Project effective
March 31, 2000.

(x)      Synergics, Inc. Acquisition

        Beginning in late 1999,  the Managing  Shareholder  of the Trust,  began
negotiations  to  buy  nine  existing   hydroelectric   generating  plants  from
Synergics, Inc. ("Synergics").  In the course of negotiations and due diligence,
the Managing  Shareholder  learned that one of Synergics' lenders had declared a
payment  default  against  Synergics and that the lender had agreed to discharge
the debt at a substantial  discount from the face amount if payment were made by
the end of April 2000.  In order to preserve the benefit of the  lender's  offer
and to allow completion of the acquisition on favorable terms, the Trust and the
Growth Fund, through a joint venture, acquired the debt from the lender on April
28,  2000 for a payment  of $17  million  to the  lender.  The debt  remains  in
default,  but the joint venture is not exercising its remedies against Synergics
or the Synergics subsidiaries pending the proposed acquisition described below.

            The joint  venture  intends to acquire the  Synergics  hydroelectric
generation  business by forgiving the $17 million of outstanding debt and paying
an  additional $1 million to the  shareholders  of Synergics and paying up to an
additional $1.7 million of Synergics' tax liabilities  that might be incurred as
a  result  of the  sale  of its  assets.  The  structuring  and  closing  of the
acquisition is to be determined after a review of certain financial, contractual
and tax considerations.  Until the acquisition  closes,  Synergics has agreed to
retain all working capital for the account of the joint venture and to allow the
joint venture to approve all operational  decisions and expenditures.  Synergics
is cooperating  closely with the joint venture in making operational  decisions.
However,  although the joint venture  currently intends to acquire the Synergics
hydroelectric  generation  business as promptly as  possible,  neither the joint
venture nor the Trust and the Growth Fund are obligated to acquire  Synergics or
any of its assets.  Wayne L. Rogers, the president of Synergics,  agreed to vote
the stock of Synergics, Inc. beneficially owned by him (approximately 69% of the
voting  stock)  in favor  of a  merger  or  other  corporate  reorganization  as
specified  by the Trust and the Growth Fund that  materially  complies  with the
provisions outlined above.

            Although  the joint  venture now owns $17 million of the senior debt
of Synergics, there is approximately $11.725 million of debt owed to Fleet Bank,
N.A. The Trust and the Growth Fund are in discussions with Fleet Bank concerning
the assumption of the Fleet debt in connection with the acquisition.

            The Trust  supplied  $5  million  of the  capital  used by the joint
venture to acquire  the debt and the Growth  Fund  supplied  the  remaining  $12
million.  Any additional  capital needed for the acquisition will be supplied to
the joint venture by the Growth Fund. The Trust and the Growth Fund will own the
joint  venture in  proportion to the capital each supplies and neither will have
preferred rights over the other.

         (3)  Project Operation.

     The Maine Hydro  Projects are  Qualifying  Facilities  under PURPA and have
entered into long-term Power Contracts with their local distribution  utilities.
Under the Power Contracts for the Maine Hydro Projects,  the local utilities are
obligated to purchase the entire  output of the Projects (up to rated levels) at
formula prices.  The Maine Hydro Projects are managed by their former owner, CHI
Energy,  Inc.,  which owns or operates  other  hydroelectric  facilities  in the
region.

     The Maine  Hydro  Projects  are  licensed  or  operated  as  "run-of-river"
facilities, which means that the amount of water passing through the turbines is
directly  dependent upon the  fluctuating  level of flow of the river or stream.
The Projects  have a very  limited  ability to store water during high flows for
use at low flow periods. As a result, these Projects are unable to earn capacity
payments  and are often  unable to produce  high  output in the peak  summer and
winter months when spot  electricity  rates are highest.  Instead,  they produce
electric  energy and sell it as  generated  at the fixed  rates  provided in the
Power Contracts. No separate payments are made for capacity or capability.

         The Maine Hydro  Projects owned by the Trust use  hydroelectric  energy
and are not subject to fuel price changes or supply  interruptions.  Because the
Maine Hydro Projects are "run-of-river"  hydroelectric  plants,  their output is
dependent  upon rainfall and snowfall in the areas above the dams and output has
varied.  Output is generally  lowest in the summer  months and in the winter and
highest in the spring and fall.

      Of the 14 Maine Hydro Projects,  six operate under existing  hydroelectric
project licenses from the Federal Energy Regulatory  Commission ("FERC") and two
have license applications pending. Changes to the six other, unlicensed Projects
(which are currently  exempt from  licensing) may trigger a requirement for FERC
licensing.  FERC licensing requirements have become progressively more stringent
and often require that output of a Project that is being  licensed or relicensed
be  restricted   in  order  to  allow  a  more  natural  flow  of  water,   that
archaeological  and  historical  surveys be  undertaken,  that public  access to
waterways be provided  (sometimes  requiring  purchase of property rights by the
hydroelectric  licensee)  and that  various  site  improvements  be made.  These
requirements can materially impair a project's profitability. See Item 1(c)(8) -
Business - Narrative Description of Business - Regulatory Matters.

         The Maine Biomass  Projects burn whole-tree wood chips, as well as wood
from processing of raw wood at paper mills or sawmills.  The price of wood waste
fluctuates  and is a  primary  determinant  of  whether  the  Projects  can  run
profitably  or  not.  The  major  causes  of  the  fluctuation  are  changes  in
woodcutting or wood processing  volumes caused by general  economic  conditions,
increases  in the use of wood  waste by paper  mills for their own  cogeneration
plants,  changes in demand from competing  generating plants using wood waste or
paper mill refuse and weather  conditions.  The cost of wood waste is  currently
significantly  in  excess  of that  anticipated  at the time the  Maine  Biomass
Projects were purchased.

         Although the Maine Biomass Projects are Qualifying Facilities,  they do
not have long-term  Power  Contracts and sell their capacity and electric energy
through  bilateral  contracts with utilities and other entities that  distribute
electricity,  such  as the  contract  with  Constellation  as  described  above.
Generators may sell directly to such entities on a bilateral  basis, or they may
sell to the ISO. The ISO dispatches  generating  plants and takes their power in
accordance  with  offers  and its  estimate  of the  most  economical  means  of
providing  sufficient reliable  electricity.  It computes the clearing price for
each electrical  product on an hourly basis, bills loads for their shares of the
products and is to pay generators in accordance with the generators'  offers and
the market rules.  In 2000, five  "electrical  products" were bought and sold on
the ISO's  market.  In addition to  installed  capability  and energy (the power
actually  used by  consumers),  the  market  included  four  types  of  reserves
(basically,  the ability to turn on or increase the  operating  rate of electric
generators  within  specified  times to provide  additional  power  quickly) and
automatic generation control (a related ability).

         The Maine  Biomass  Projects  submitted  offers to sell their  electric
output for the summer of 1999 at  relatively  high prices  with the  expectation
that the  plants  would  be  called  upon by the ISO  only in the  most  extreme
conditions.  This strategy was necessary because of the relatively high costs of
operating the plants without a long-term base load contract. In early July 1999,
the ISO informed NEPOOL members that it would pay lower prices than those posted
on its market  Website  on those  three days in June.  After  considering  ISO's
stated  reasons for reducing the posted prices and the ISO's actions during June
1999,  RPM concluded that the ISO was determined to intervene in the markets and
to prevent prices from rising to clearing levels during shortage  periods.  This
would prevent profitable  operation of the Projects.  Accordingly,  Indeck Maine
revised its biding  strategy such that the Maine Biomass  Projects would only be
called upon to dispatch during the highest peak days.

         In  early  October  1999,   the  ISO  informed  RPM  that  a  scheduled
transmission  outage for  October 16 and 17  required  the ISO to  activate  all
possible  generation in Maine. The Maine Biomass  Projects,  which had been shut
down and which did not have full crews  available,  had a pre-existing  offer to
the ISO to supply  electric  energy  at a high  price,  reflecting  the costs of
restarting  the plants,  obtaining  a crew on short  notice and  covering  fixed
costs.  The ISO accepted the offer  subject to its market rules and  conditions.
The Maine Biomass Plants  operated as dispatched by the ISO on October 16, 1999.
In November  1999,  the ISO  advised  RPM that it would pay Indeck  Maine only a
total of  approximately  $5,000 for the energy the Projects  produced on October
16, 1999, an amount  significantly  less than the amount  Indeck Maine  believes
that it is owed for  operation  on October 16. The ISO has stated  that,  in its
opinion,  the  Projects had  monopoly-like  market power on October 16, 1999 and
that under the existing  market rules it was only  obligated to pay a rate based
on variable costs unless the Projects could cost-justify a higher rate.

         See, Item 3 "Legal Proceedings" for an update on the current litigation
that the Indeck Projects are pursuing against the ISO.

     The Santee River  Project is currently  subject to a Chapter 11  bankruptcy
proceeding  in U.S.  Bankruptcy  Court in South  Carolina.  As a result  of such
proceeding,  it is likely that the  Project,  or its  assets,  will be sold to a
third-party  purchaser and either operated by such purchaser,  or dismantled and
sold. RPM is actively  involved in and following the bankruptcy  proceedings and
there is a possibility  that any workout could involve the Trust.  However,  any
such  involvement  may require  further  investments by the Trust.  As indicated
earlier, the Trust has written-off its entire investment in Santee River.

     The Ridgewood Waterpure Project is in testing and production planning.  For
information  about operations of MetaSound,  the U.K.  Landfill Projects and the
Egyptian Projects, see 1tem 1(c)(3) above.

     The major costs of a Project  while in  operation  will be debt service (if
applicable), fuel, taxes, maintenance and operating labor. The ability to reduce
operating  interruptions and to have a Project's  capacity available at times of
peak demand are critical to the profitability of a Project. Accordingly, skilled
management is a major factor in the Trust's business.

     The  technology  involved  in  conventional  power plant  construction  and
operations  as well as electric  and heat energy  transfers  and sales is widely
known  throughout the world.  There are usually a variety of vendors  seeking to
supply the necessary  equipment  for any Project.  So far as the Trust is aware,
there are no  limitations  or  restrictions  on the  availability  of any of the
components  which would be  necessary  to  complete  construction  and  commence
operations of any Project.  Generally,  working capital  requirements  are not a
significant  item in the  independent  power  industry.  The cost of maintaining
adequate supplies of fuel is usually the most significant  factor in determining
working capital needs.

         In order to commence  operations,  most  Projects  require a variety of
permits,  including zoning and environmental  permits.  Inability to obtain such
permits will likely mean that a Project will not be able to commence operations,
and even if  obtained,  such  permits must usually be kept in force in order for
the Project to continue its operations.

     Compliance  with  environmental  laws  is  also a  material  factor  in the
independent power industry. The Trust believes that capital expenditures for and
other costs of environmental  protection have not materially  disadvantaged  its
activities  relative  to other  competitors  and  will not do so in the  future.
Although the capital costs and other  expenses of  environmental  protection may
constitute a significant  portion of the costs of a Project,  the Trust believes
that those costs as imposed by current laws and  regulations  have been and will
continue to be largely  incorporated into the prices of its investments and that
it accordingly  has adjusted its investment  program so as to minimize  material
adverse effects. If future environmental  standards require that a Project spend
increased  amounts for  compliance,  such increased  expenditures  could have an
adverse  effect  on the Trust to the  extent  it is a holder  of such  Project's
equity securities.

(4) Trends in the Independent Power and Other Industries

    (i)  Qualifying Facilities with long-term Power Contracts

    The Trust is somewhat insulated from recent  deregulatory trends in the U.S.
electric  industry  because the Maine Hydro  Projects and  Synergics  Hydros are
Qualifying  Facilities with long-term formula- price Power Contracts.  There has
been speculation that in the course of deregulating the electric power industry,
federal or state regulators or utilities would attempt to invalidate these power
purchase  contracts as a means of causing owners of independent  power plants to
bear some of the costs of deregulation.

         However,  recently, the State of California has experienced significant
increases in the cost of  wholesale  power and the  investor-owned  utilities in
California  have  suffered  huge  losses  and  are  teetering  on the  brink  of
bankruptcy.  While there are a variety of reasons that have  contributed  to the
current  state of affairs  in  California,  the  general  consensus  is that the
problem has been caused by the method  adopted by California  to deregulate  its
electric  market.  For example,  the IOUs in California were required to sell to
unaffiliated  third  parties a large  majority of their  fossil-fueled  electric
generation facilities.  In addition, the IOUs were required to sell all of their
remaining  generation  to and  purchase  all of  their  supply  needs  from  the
California  Power  Exchange  ("CalPx"),  a  day-ahead  and day-of  spot  market.
Finally,  retail  rates were frozen by the  deregulation  law and low levels and
there was  generally  no market for  installed  capability.  Until the summer of
2000,  this framework  worked well in that the wholesale  price for  electricity
purchased from the CalPx by IOUs was significantly  lower than the frozen retail
rates that they were  permitted  to charge to retail  customers.  The  resulting
"profit" was used,  among other  things,  to recoup  stranded  investments,  pay
dividends, as well as for other general corporate purposes.  However, during the
summer of 2000 the situation changed dramatically.  The CalPx wholesale price of
electricity increased  significantly due in large part to California's explosive
growth in power consumption,  environmental  regulation,  natural gas shortages,
the failure of the state to add any significant  electric generation  facilities
for over a decade, and the lack of available electric energy from other areas of
the  West.  The IOUs  were  now  purchasing  its  electric  generation  needs at
wholesale prices significantly above the frozen retail rates it was permitted by
AB 1890 to charge  to retail  customers.  As a  result,  the IOUs have  incurred
substantial losses and unless some resolution is worked out, PG&E may ultimately
declare bankruptcy.

         Although it is  anticipated  that the New England area may experience a
shortage of needed electric  capacity in the near future,  especially during the
summer,  which could  contribute  to an increase in prices,  the general view is
that if such events were to occur, the impact would be  significantly  less than
in  California  for a variety of reasons.  For  example,  NEPOOL has a installed
capability  market,  which  California  did not have.  The installed  capability
requirements  essentially mandates that generators have sufficient generation to
serve load, plus a reserve margin,  thereby helping to avoid the sever shortages
that have occurred in California.  Additionally, although there is a current cap
on  wholesale   purchases  in  the  NEPOOL  market,  such  cap  is  $1,000  MWh,
significantly above the $150 Mwh "soft cap" in California.

         With respect to Power  Contracts,  to date FERC and state  authorities,
except for California,  have generally stated that existing Power Contracts will
not be affected by deregulation initiatives. The regulators have so far rejected
the requests of a few utilities to invalidate existing Power Contracts. Instead,
most state plans for  deregulation  of the electric  power  industry  (including
those in Maine)  treat the value of  long-term  Power  Contracts  that are above
current and  anticipated  market  prices as "stranded  costs" of the  utilities.
There can not be any assurance, however, that the rapid changes occurring in the
industry and the economy as a whole would not cause  regulators  or  legislative
bodies  to  attempt  to change  the  regulatory  structure  in ways  harmful  to
Independent  Power  Projects  or to attempt  to impair  existing  contracts.  In
particular,  some  regulatory  agencies have urged  utilities to construe  Power
Contracts  strictly and to police  Independent  Power Projects'  compliance with
those Power Contracts vigorously.

         Predicting the consequences of any legislative or regulatory  action is
inherently speculative and the effects of any action proposed or effected in the
future may harm or help the Trust.  Because of the  consistent  position  of the
regulatory  authorities to date and the other factors  discussed here, the Trust
believes that so long as it performs its obligations  under the Power Contracts,
it will be entitled to the benefits of the contracts.

         In recent years, many electric  utilities have attempted to exploit all
possible means of terminating  Power Contracts with independent  power projects,
including  requests to  regulatory  agencies  and  alleging  violations  of even
immaterial terms of the Power Contracts as justification  for terminating  those
contracts.  If such an attempt  were to be made,  the Trust might face  material
costs in contesting  those utility  actions.  Other  utilities have from time to
time made offers to purchase and  terminate  Power  Contracts  for lump sums. No
such offer has been  suggested  or made to the Trust,  although  the Trust would
entertain such an offer.

         Finally,  the Power  Contracts are subject to modification or rejection
in the event  that the  utility  purchaser  enters  bankruptcy.  There can be no
assurance that the utility purchaser will stay out of bankruptcy.

         After  the  Power  Contracts  for the Maine  Hydro  Projects  expire at
varying times from 2008 to 2020 or those contracts  terminate for other reasons,
those  Projects under  currently  anticipated  conditions  would be free to sell
their output on the competitive electric supply market,  either in spot, auction
or short-term arrangements or under long-term contracts if those Power Contracts
could be obtained. There is no assurance that the Projects could then sell their
output or do so  profitably.  While the  Providence  Project  is not  subject to
natural  gas  price   fluctuations   and  it  may  benefit  from   environmental
requirements  for  utilities to purchase  power from  environmentally  favorable
sources,  the supply of fuel gas from the landfill is not  assured.  Both it and
the Maine Hydro  Projects may have  diseconomies  of small  scale.  The Trust is
unable to  anticipate  whether the  Projects  would have cost  disadvantages  or
advantages after their Power Contracts  expire. It is thus impossible to predict
the profitability of those Projects after termination of the Power Contracts.

     The Maine  Biomass  Projects are  "renewable  power"  projects.  "Renewable
power"  (often called "green  power") is a  catchphrase  that includes  Projects
(such as solar, wind, small hydroelectric, biomass, geothermal and landfill-gas)
that do not use fossil fuels or nuclear fuels.  Renewable power plants typically
have high capital  costs and often have total costs that are well above  current
total  costs  for new  gas-turbine  production.  A number of  states,  including
Massachusetts,   Connecticut   and  Maine,   are  requiring  that  retailers  of
electricity  purchase a certain minimum amount of electricity  (often between 5%
to 30% of their total  requirements) from renewable power sources.  Although the
Massachusetts  and  Connecticut  requirements  were to have gone into  effect by
spring  2000,  delays in writing  regulations  defining  renewable  sources have
effectively  suspended  the  requirements.  The Trust does not  anticipate  that
Massachusetts  and  Connecticut  or  the  other  New  England  states  that  are
considering  such  requirements  will have  requirements  for loads to  purchase
renewable  energy  before 2001.  Because  there is yet no  substantial  enforced
demand for renewable  energy,  these state  requirements have not had a material
effect on the price of renewable  energy.  Renewable  energy is currently priced
almost identically to that of non-renewable energy.

         In addition,  in order to be competitive  currently,  the Maine Biomass
Projects need access to transmission  facilities at a reasonable price. In 2000,
Indeck Maine Energy reached an agreement with its transmission provider,  Bangor
Hydro-Electric  Company,  to substantially  reduce the rates charged to transmit
electricity from the company's two plants to the interstate  transmission  grid.
The agreed upon settlement was part of a rate case proceeding before the Federal
Energy Regulatory Commission ("FERC").  The discounted rates agreed upon provide
Indeck Maine with a substantial  discount over the utility's usual  transmission
rate, thus it should  substantially  reduce operating costs at the Jonesboro and
West Enfield  power  plants.  A key objective of the company was to obtain these
reduced  transmission  rates,  as the prior utility rate had been an obstacle to
the  profitability  of the two power  plants and the  utility  had  proposed  to
substantially  increase its rates as well. The settlement  agreement,  including
the Indeck Maine discount, was put into effect on an interim basis pending final
action on the case by FERC.

         On February 26,  2001,  the FERC issued an order  approving  the Indeck
Maine Energy discount,  along with most provisions of the Bangor Hydro rate case
settlement, but modifying certain language in the settlement document. Within 30
days of this FERC  order,  Bangor  Hydro must notify the  Commission  if it will
agree to the  changed  language  and  also  whether  the  other  parties  to the
settlement will agree as well.  Under the  settlement's  terms, all parties must
agree if FERC orders any material  change to the  settlement's  terms. If Bangor
Hydro or another  party does not agree to the  settlement  as  modified by FERC,
then the parties will have to attempt to renegotiate  the case or go to trial on
the rate case issues. At the present time it does not appear that any party will
object to the settlement as modified and that the settlement,  as modified, will
take final effect.

         Under the Indeck  Maine  discount,  the  utility  agreed to give Indeck
Maine specific discounted  transmission rates for a period of 5 years.  Pursuant
to the settlement agreement,  and only setting out the major terms, Indeck Maine
will pay  Bangor  Hydro  $7/kw/year  for firm  transmission  service.  At Indeck
Maine's option it can also take firm transmission service on a monthly basis for
$7/kw/year  for all months except June,  July and August,  when the rate will be
based on a $15/kw/year rate. After year three of the agreement, the transmission
rate can increase under certain limited circumstances, but even in such an event
Indeck  Maine would only be  required  to meet the price  offered by a competing
transmission  customer to retain the service. In contrast to the discounted rate
agreed upon,  it is estimated  that a  nondiscounted  rate on Bangor Hydro would
have been over $30/kw/yr, a large multiple of the discounted rate agreed upon.

    (ii) Foreign operations.

       The  electricity  markets in the United  Kingdom  were fully  deregulated
several  years before  deregulation  began in the U.S.  Accordingly,  the Trust,
through Ridgewood U.K., is investing in a niche area, landfill gas power plants.
The Prior Programs  already own interests in two large landfill gas power plants
in Rhode Island and  California  and the technology and business are familiar to
Ridgewood  Power.  Further,  because of the ecological  benefits of landfill gas
power plants,  the U.K.  government has required utilities to enter into 15 year
Power  Contracts at premium  prices,  through the  Non-Fossil  Fuels  Purchasing
Agency.  The  U.K.  Landfill  Projects  enjoy a  status  similar  to  qualifying
facilities in the U.S. with long-term Power  Contracts.  They enjoy a guaranteed
price and market for their output and are not subject to price  fluctuations for
their fuel. The major business risks and  considerations  are keeping  operating
costs at a minimum through good design,  preventative  maintenance and attention
to fuel quality,  governmental  policy  changes and exchange  rate  fluctuations
affecting  the  pound-denominated  revenues  from the  Projects.  Thus the Trust
believes that these  investments  in a stable  Western  European  country with a
guaranteed  market for the  output  have the  potential  for  long-term,  stable
income.  Because Ridgewood U.K. is not providing any capital for development and
buys Projects only after they receive bank financing,  most  development risk is
avoided. Ridgewood Power is investigating hedging and other strategies to reduce
exchange  rate risk when  revenues  from the U.K.  Landfill Gas Projects  become
large enough to make these strategies practical.

       The Egyptian Projects are substantially riskier. These projects are being
developed at remote  resort  hotel sites on the Red Sea,  which are distant from
other  electric and water sources.  REI is developing the Projects  itself using
local engineering personnel and contractors. Environmental, construction, legal,
and labor  requirements  are often unclear and can change  unpredictably  at any
time. REI may find it difficult to enforce contracts and other legal obligations
against  local  suppliers  or  customers.  REI has not  engaged  in  substantial
development  work  either  in the  U.S.  or  outside  the  U.S.  and has  little
experience in developing  foreign  Projects.  There are no backup  facilities to
provide electricity or water if the Projects fail or are unusable for any period
of time. Specifications for Projects have changed suddenly and unpredictably and
in  some  cases  it  has  been   necessary  for  REI  to  construct   additional
infrastructure.  Cultural,  language and political differences between Egypt and
the U.S.  may impair  communication  with  personnel,  cause errors and possibly
cause  hostile   action   against  the  Projects  by  employees,   residents  or
governmental  agencies.  There have been occasional terrorist incidents in Egypt
directed against Western tourists and tourist facilities. Further such incidents
might deter tourism and make the host hotel resorts  unprofitable  or might even
be directed against the Egyptian Projects or their personnel.

      The Projects burn light fuel oil in diesel engines, which is brought in by
tanker truck. Supply interruptions,  oil spills or fires are possible.  Although
the Projects are exposed to world oil price  variations,  this risk is mitigated
because the Power Contracts  contain price  adjustments  tied to fuel oil prices
that should substantially transfer the risk to the customers.

      The  customers  of  most  of  the  Egyptian  Projects  are  single  hotels
governmentally-sponsored  associations of resort hotels under 10-year  long-term
Power Contracts with each Project. Each Project provides electricity or water or
both to the  entire  association  and bills the  hotels or  association  for the
aggregate  amount.  The  association  in turn bills its member  hotels for their
consumption  and their share of common  consumption  for services such as street
lighting,  residential  services  for  hotel  employees,  and  services  such as
security.  The associations may not have substantial  assets and thus may depend
on prompt  payment by their  members in order to meet their  obligations  to the
Project.  Their  ability to enforce  payment  obligations  may be  limited,  and
although  the Project has the ability to shut off water or power to a defaulting
association member, it may be practically  difficult to do so over resistance by
a major  employer.  It is  possible  that the  associations  would  fail to bill
members  appropriately,  that disputes  between the associations and members for
other  reasons  might result in a failure to pay the  associations,  or that the
associations  for political,  economic or other reasons would fail to meet their
obligations  to the Project.  It is also  possible  that  adverse  events in the
tourist  industry,  such as  labor  disputes,  airline  problems,  shortages  of
personnel,  changes in customer taste, environmental problems,  overbuilding and
international  political or cultural developments could depress tourist trade to
the point that the hotels or  associations  would be unable to pay.  Other risks
include currency conversion and repatriation risks,  exchange rate fluctuations,
taxation disputes,  international  hostilities,  arbitrary  governmental action,
religious tensions, anti-foreign sentiments and legal changes.

         Because of these risks and difficulties, it has been difficult to raise
capital  for  these  Projects  and there is a great  local  demand  for  similar
Projects.  The prices for the  electricity  and water  provided by the  Projects
reflect  these risks and others.  The Managing  Shareholder  believes that these
risks are acceptable, because the Trust has been organized with the intention to
have a somewhat diversified  portfolio of investments and because the Trust will
be investing in  lower-risk,  lower-return  foreign and U.S.  power  Projects as
well.

 (5)  Competition

     There are a large number of participants in the independent power industry.
Several  large  corporations  specialize in  developing,  building and operating
independent power plants. Equipment manufacturers, including many of the largest
corporations in the world,  provide  equipment and planning services and provide
capital through finance affiliates. Many regulated utilities are preparing for a
competitive  market,  and a  significant  number of them already have  organized
subsidiaries  or affiliates to  participate in  unregulated  activities  such as
planning,  development,  construction and operating services or in owning exempt
wholesale  generators or up to 50% of  independent  power  plants.  In addition,
there are many  smaller  firms whose  businesses  are  conducted  primarily on a
regional or local basis.  Many of these companies  focus on limited  segments of
the cogeneration and independent  power industry and do not provide a wide range
of products and services.  There is significant  competition  among  non-utility
producers,  subsidiaries of utilities and utilities themselves in developing and
operating  energy-producing projects and in marketing the power produced by such
projects.

     The U.K. Landfill Projects sell their output to a government agency and are
not subject to  competition.  Currently,  the  Egyptian  Projects are located in
remote coastal areas that are not linked to the national  electric power network
and thus are not subject to substantial  competition for providing  electricity.
The water Projects do not face  substantial  competition  except from trucked-in
water.  This also means that there is no substantial  backup for the Projects if
they  cannot  operate for any reason.  It is possible  that in future  years the
national  network may extend to some or all of the Project sites,  in which case
there might be competition.

(6)  Regulatory Matters.

     Projects are subject to energy and  environmental  laws and  regulations at
the federal,  state and local levels in connection with development,  ownership,
operation, geographical location, zoning and land use of a Project and emissions
and other substances produced by a Project.  These energy and environmental laws
and  regulations  generally  require  that a wide  variety of permits  and other
approvals be obtained before the commencement of construction or operation of an
energy-producing  facility and that the facility then operate in compliance with
such permits and approvals.

(i)  Energy Regulation.

         (A)  PURPA.  The  enactment  in  1978 of  PURPA  and  the  adoption  of
regulations  thereunder  by FERC  provided  incentives  for the  development  of
cogeneration  facilities and small power production  facilities  meeting certain
criteria.  Qualifying  Facilities  under  PURPA are  generally  exempt  from the
provisions of the Public  Utility  Holding  Company Act of 1935, as amended (the
"Holding  Company  Act"),  the Federal  Power Act, as amended (the "FPA"),  and,
except  under  certain  limited  circumstances,  state  laws  regarding  rate or
financial  regulation.  In order to be a  Qualifying  Facility,  a  cogeneration
facility must (a) produce not only  electricity  but also a certain  quantity of
heat  energy  (such as  steam)  which is used for a  purpose  other  than  power
generation, (b) meet certain energy efficiency standards when natural gas or oil
is used as a fuel source and (c) not be  controlled or more than 50% owned by an
electric utility or electric utility holding company. Other types of Independent
Power Projects,  known as "small power production facilities," can be Qualifying
Facilities if they meet regulations  respecting maximum size (in certain cases),
primary energy source and utility ownership.

         The exemptions from extensive federal and state regulation  afforded by
PURPA to Qualifying  Facilities are important to the Trust and its  competitors.
The Trust  believes  that each of its  Projects is a Qualifying  Facility.  If a
Project loses its Qualifying  Facility status,  the utility can reclaim payments
it made for the Project's non-qualifying output to the extent those payments are
in excess of  current  avoided  costs or the  Project's  Power  Contract  can be
terminated by the electric utility.

         (B) The 1992 Energy Act. The  Comprehensive  Energy  Policy Act of 1992
(the "1992 Energy Act")  empowered  FERC to require  electric  utilities to make
available their transmission facilities to and wheel power for Independent Power
Projects  under  certain  conditions  and  created  an  exemption  for  electric
utilities,  electric  utility  holding  companies  and other  independent  power
producers from certain restrictions imposed by the Holding Company Act. Although
the Trust believes that the exemptive provisions of the 1992 Energy Act will not
materially  and  adversely  affect its  business  plan,  the 1992 Energy Act may
result in increased competition in the sale of electricity.

     The 1992 Energy Act created the "exempt wholesale  generator"  category for
entities certified by FERC as being exclusively  engaged in owning and operating
electric  generation   facilities  producing   electricity  for  resale.  Exempt
wholesale  generators remain subject to FERC regulation in all areas,  including
rates,  as well  as  state  utility  regulation,  but  electric  utilities  that
otherwise would be precluded by the Holding Company Act from owning interests in
exempt wholesale generators may do so. Exempt wholesale generators, however, may
not sell  electricity to affiliated  electric  utilities  without  express state
approval  that  addresses  issues of fairness to consumers  and utilities and of
reliability.

         (C) The Federal  Power Act. The FPA grants FERC  exclusive  rate-making
jurisdiction over wholesale sales of electricity in interstate commerce. The FPA
provides  FERC with ongoing as well as initial  jurisdiction,  enabling  FERC to
revoke  or  modify  previously  approved  rates.  Such  rates  may be based on a
cost-of-service   approach  or  determined   through   competitive   bidding  or
negotiation.  While  Qualifying  Facilities  under  PURPA  are  exempt  from the
rate-making and certain other provisions of the FPA,  non-Qualifying  Facilities
are subject to the FPA and to FERC rate-making jurisdiction.

     Companies whose  facilities are subject to regulation by FERC under the FPA
because  they  do  not  meet  the  requirements  of  PURPA  may  be  limited  in
negotiations  with power purchasers.  However,  since such projects would not be
bound by PURPA's heat energy use requirement for cogeneration  facilities,  they
may have greater  latitude in site  selection  and facility  size. If any of the
Trust's  electric power Projects  failed to be a Qualifying  Facility,  it would
have to comply with the FPA.

         The FPA also provides that any  hydroelectric  facility that is located
on a navigable  stream or that  affects  public lands or water from a government
dam may not be constructed or be operated  without a license from FERC.  Certain
facilities  that were  operating  before  1935 are  exempt,  if the  waterway is
non-navigable,  or  "grandfathered"  and do not require  licenses so long as the
facilities  are not  modernized or otherwise  materially  altered.  Licenses are
granted for 30 to 50 year terms.

(D) Fuel Use Act. Projects that may be developed or acquired may also be subject
to the Fuel Use Act, which limits the ability of power producers to burn natural
gas in new generation  facilities  unless such facilities are also  coal-capable
within the meaning of the Fuel Use Act.

(E) State  Regulation.  State public utility  regulatory  commissions have broad
jurisdiction over Independent Power Projects which are not Qualifying Facilities
under PURPA, and which are considered public utilities in many states. In states
where the wholesale or retail  electricity  market remains  regulated,  Projects
that are not  Qualifying  Facilities  may be  subject to state  requirements  to
obtain  certificates of public convenience and necessity to construct a facility
and could have their organizational,  accounting,  financial and other corporate
matters  regulated on an ongoing  basis.  Although FERC  generally has exclusive
jurisdiction  over  the  rates  charged  by a non-  Qualifying  Facility  to its
wholesale  customers,  state  public  utility  regulatory  commissions  have the
practical  ability to  influence  the  establishment  of such rates by asserting
jurisdiction over the purchasing utility's ability to pass through the resulting
cost of purchased power to its retail customers. In addition,  states may assert
jurisdiction over the siting and construction of non-Qualifying  Facilities and,
among other things, issuance of securities,  related party transactions and sale
and transfer of assets.  The actual scope of  jurisdiction  over  non-Qualifying
Facilities by state public utility  regulatory  commissions varies from state to
state.

(ii)  Environmental Regulation.

     The  construction  and  operation  of  Independent  Power  Projects and the
exploitation of natural  resource  properties are subject to extensive  federal,
state and local laws and regulations  adopted for the protection of human health
and  the  environment  and to  regulate  land  use.  The  laws  and  regulations
applicable to the Trust and Projects in which it invests  primarily  involve the
discharge of emissions into the water and air and the disposal of waste, but can
also  include  wetlands  preservation  and  noise  regulation.  These  laws  and
regulations  in many cases  require a lengthy  and  complex  process of renewing
licenses,  permits  and  approvals  from  federal,  state  and  local  agencies.
Obtaining  necessary approvals regarding the discharge of emissions into the air
is  critical  to the  development  of a Project  and can be  time-consuming  and
difficult.  Each Project  requires  technology and facilities  which comply with
federal,  state and local  requirements,  which  sometimes  result in  extensive
negotiations  with  regulatory  agencies.   Meeting  the  requirements  of  each
jurisdiction with authority over a Project may require  extensive  modifications
to existing Projects.

         Title  V of  the  Clean  Air  Act  Amendments  added  a new  permitting
requirement for existing  sources that requires all  significant  sources of air
pollution to submit new  applications to state agencies.  Title V implementation
by the states generally does not impose significant  additional  restrictions on
the Trust's  Projects,  other than  requirements to continually  monitor certain
emissions and document  compliance.  The  permitting  process is voluminous  and
protracted  and the costs of fees for Title V  applications,  of testing  and of
engineering  firms to prepare the necessary  documentation  have increased.  The
Trust believes that all of its facilities, which require Title V compliance, are
or will be in compliance with such requirements.

     The  Trust's  Projects  must  comply  with many  federal and state laws and
regulations  governing  wastewater and storm water discharges from the Projects.
These are generally  enforced by states under "NPDES"  permits for point sources
of  discharges  and by storm water  permits.  Under the Clean  Water Act,  NPDES
permits  must be renewed  every  five years and permit  limits can be reduced at
that time or under  re-opener  clauses at any time.  The  Projects  have not had
material difficulty in complying with their permits or obtaining  renewals.  The
Projects use  closed-loop  engine  cooling  systems  which do not require  large
discharges of coolant except for periodic  flushing to local sewer systems under
permit and do not make other material discharges.

     The Trust's  Projects  are  subject to the  reporting  requirements  of the
Emergency Planning and Community  Right-to-Know Act that require the Projects to
prepare  toxic  release  inventory  release  forms.  These  forms list all toxic
substances  on site that are used in excess of  threshold  levels so as to allow
governmental  agencies  and the  public  to learn  about the  presence  of those
substances and to assess potential hazards and hazard responses.  The Trust does
not anticipate that this  requirement will result in any material adverse effect
on it.

     Based  on  current   trends,   the   Managing   Shareholder   expects  that
environmental and land use regulation will become more stringent.  The Trust and
the Managing  Shareholder  have  developed  limited  expertise and experience in
obtaining  necessary licenses,  permits and approvals,  which in the case of the
Maine Hydro Project are the responsibility of Consolidated Hydro, Inc. The Trust
will rely upon qualified  environmental  consultants and  environmental  counsel
retained  by it or by Project  sponsors  to assist in  evaluating  the status of
Projects regarding such matters.

(d) Financial Information about geographic areas.

     For 2000,  revenues  from  customers  not  affiliated  with the Trust  from
sources  inside and  outside  the  United  States  and asset  locations  were as
follows:

Geographic
Location            Income (loss)          Assets

United States        $(727,000)          $ 18,219,000

United Kingdom         552,000             25,858,000

Egypt                    5,000              6,299,000

(e)  Employees.

     The  Trust  has no  employees.  The  persons  described  below  at Item 5 -
Directors and Executive  Officers of the Registrant serve as executive  officers
of the Trust and have the  duties  and  powers  usually  applicable  to  similar
officers of a Delaware corporation in carrying out the Trust business.

     Ridgewood  Waterpure has 6 employees  located in Oak Harbor,  Ohio. REI has
approximately 12 employees located in Egypt.

Item 2.  Properties.

     Pursuant to the  Management  Agreement  between the Trust and the  Managing
Shareholder  (described at Item 10(c)),  the Managing  Shareholder  provides the
Trust with office space at the Managing  Shareholder's  principal  office at The
Ridgewood Commons, 947 Linwood Avenue, Ridgewood, New Jersey 07450.

     The following  table shows the material  properties  (relating to Projects)
owned or leased by the Trust's subsidiaries.

                                                     Approximate
                                                       Square
                     Ownership  Ground   Approximate  Footage of   Description
                     Interests  Lease      Acreage    Project          of
Projects   Location  in Land  Expiration   of Land    (Actual        Project
                                                     or Projected)
Maine Hydro 14 sites
            in Maine   Owned     n/a        24            n/a      Hydro-
                       by joint                                     electric
                       venture*                                     facilities

Ridgewood  Oak Harbor, Leased                                     Design and
 Waterpure    Ohio     building   2002                             manufacturing
                                                                   facility

U.K.       England and Leased or 2014-     less than      n/a     Landfill gas
Landfill    Scotland   licensed 2015      10 acres                 fueled gene-
                                                                   ration plants


Egyptian              Leased by   n/a       less than      n/a    Electric gen-
Site                  in Egypt                          10 acres   erating or
                     Joint venture*                                water desali-
                                                                   nation facil-
                                                                   ties

     The Trust believes that these properties are currently adequate for current
operations at those sites.

Item 3.  Legal Proceedings.

         On June 2, 2000, Indeck Maine filed a "Complaint  Requesting Fast Track
Processing And Request For Immediate Action" with FERC seeking FERC's removal of
bid restrictions placed on Indeck Maine's Projects.  The Complaint asserted that
the actions of the ISO in setting bid caps and  unilaterally  mitigating  Indeck
Maine's bids far exceeded its authority  under the ISO's market  rules.  On July
26,  2000,  FERC agreed with Indeck Maine and ruled that the ISO had no basis to
impose bid restrictions upon Indeck Maine but, concluded,  that "[w]e will grant
Indeck's  request to order ISO-NE to remove the bid caps on Indeck's units as of
the date of this  order."  Unfortunately,  FERC  failed to rule that the ISO bid
caps and other  restrictions  were improper from their inception.  On August 25,
2000, Indeck Maine filed a motion with FERC seeking a clarification that the bid
restrictions were improper from inception or, in the alternative, a rehearing on
that issue. FERC has yet to rule on the matter.

         In addition,  as stated above,  in early October 1999, the ISO informed
RPM that a scheduled  transmission  outage for October 16 and 17 required ISO to
activate all possible generation in Maine. The Maine Biomass Projects, which had
been shut down and which did not have full crews  available,  had a pre-existing
offer to  supply  electric  energy  at a high  price,  reflecting  the  costs of
restarting  the plants,  obtaining  a crew on short  notice and  covering  fixed
costs.  The ISO accepted the offer  subject to its market rules and  conditions.
The Maine Biomass Plants operated as dispatched by the ISO on October 16 and, if
they were paid in  accordance  with their offer  terms,  would have  received in
excess of $2.2 million.  In November 1999, the ISO advised RPM that it would pay
a total of $5,000 for the energy the  Projects  produced  on October 16. The ISO
has stated that, in its opinion,  the Projects had monopoly-like market power on
October 16 and that under the existing market rules it was only obligated to pay
a rate based on variable costs unless the Projects  could  cost-justify a higher
rate.

         As a result,  on October  24,  2000,  Indeck  Maine  filed a  complaint
against the ISO in the Superior Court of Delaware alleging,  among other things,
that the ISO's  action in  October  1999  resulted  in a breach of an express or
implied  contract,  violated  certain  consumer  protection laws and amounted to
fraud.  The ISO removed the litigation to Federal District Court in Delaware and
Indeck  Maine  has  filed a motion to remand  the  matter  back to the  Delaware
courts. The motion has not yet bee decided by the Federal Court.

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

     The Trust has not submitted  any matters to a vote of its security  holders
during the fourth quarter of 2000.

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

     The Trust sold 932.8875 Investor Shares of beneficial interest in the Trust
in its private placement  offering,  which concluded on April 15, 1998. There is
currently no established  public trading market for the Investor  Shares and the
Trust does not intend to allow a public  trading  market to  develop.  As of the
date of this  Annual  Report on Form 10-K,  all such  Investor  Shares have been
issued and are  outstanding.  There are no  outstanding  options or  warrants to
purchase, or securities convertible into, Investor Shares.

     Investor Shares are restricted as to transferability under the Declaration,
as well as under federal and state laws regulating securities.  See Item 11(d) -
Description  of  Registrant's  Securities  to be  Registered -  Restrictions  on
Transfer  of  Investor  Shares.  The  Investor  Shares have not been and are not
expected to be  registered  under the  Securities  Act of 1933,  as amended (the
"1933  Act"),  or under any other  similar law of any state  (except for certain
registrations  that do not permit free  resale) in reliance  upon what the Trust
believes to be exemptions from the registration  requirements contained therein.
Because the  Investor  Shares  have not been  registered,  they are  "restricted
securities"  as defined  in Rule 144 under the 1933 Act.  As of the date of this
Registration  Statement,  no Investor Shares are sellable under Rule 144 because
the requirements of Rule 144(c) have not been met.

     The Managing Shareholder is considering the possibility of a combination of
the  Trust  and  six  other  investment   programs  sponsored  by  the  Managing
Shareholder  into a publicly  traded entity.  This would require the approval of
the  Investors  in the Trust and the other  programs  after proxy  solicitations
complying  with   requirements  of  the  Securities  and  Exchange   Commission,
compliance with the "rollup" rules of the Securities and Exchange Commission and
other regulations, and a change in the federal income tax status of the combined
entity from a partnership  (which is not subject to tax) to a  corporation.  The
process of considering  and effecting a combination,  if the decision is made to
do so, will be very lengthy. There is no assurance that the Managing Shareholder
will recommend a combination,  that the Investors of the Trust or other programs
will  approve  it,  that  economic  conditions  or the  business  results of the
participants  will be favorable for a combination,  that the combination will be
effected or that the economic  results of a  combination,  if effected,  will be
favorable to the Investors of the Trust or other programs.

(b)  Holders

     As of the date of this Annual  Report on Form 10-K,  there are 1,613 record
holders of Investor Shares.

(c)      Dividends

     The Trust made distributions as follows in 2000 and 1999:

                                         Year ended December 31,
                                            2000        1999
Total distributions to Investors        $3,922,376   $ 3,904,757
Distributions per Investor Share             4,205         4,186
Distributions to Managing Shareholder       39,620        39,412

     In January  2001,  the Trust ceased making  distributions  as part of their
preparations for a possible  Liquidity Event. The Trust was financially  capable
of making some distributions but Ridgewood Power concluded that it would be more
beneficial to Investors for the Trust to conserve capital in the highly volatile
business  climate  and to have  additional  capital  to  finance  a  potentially
expensive  process.  This does not mean that a Liquidity Event will  necessarily
occur or that  distributions  will necessarily  resume if a Liquidity Event does
not happen.

     If  distributions  do  resume,  the  Trust's  policy  is to make  them on a
quarterly basis.  The Trust's ability to make future  distributions to Investors
and their timing will depend on the net cash flow of the Trust and  retention of
reasonable  reserves  as  determined  by the  Trust  to  cover  its  anticipated
expenses.

     Occasionally,  distributions  may include funds derived from the release of
cash from operating or debt service reserves.  Further, the Declaration of Trust
authorizes  distributions to be made from cash flows rather than income, or from
cash reserves in some instances.  For purposes of generally accepted  accounting
principles,  amounts  of  distributions  in excess of  accounting  income may be
considered to be capital in nature.  Investors should be aware that the Trust is
organized to return net cash flow rather than accounting income to Investors.

Item 6  Selected Financial Data.

     The following data is qualified in its entirety by the financial statements
presented elsewhere in this Annual Report on Form 10-K.


                                                               As of and for the
                                                        Period from Commencement
                                                               of Share Offering
                             As of and for the Years            (April 12, 1996)
                                Ended December 31,                through Decem-
                        2000        1999      1998       1997       ber 31, 1996
Interest income .... $  352,638  $1,476,695  $2,767,348  $1,003,276  $  158,236
Total revenue (loss)   (170,555)   (520,768)  3,020,949     844,877     257,460
Net income (loss) ..(16,805,021) (4,975,059) (2,643,662) (1,345,153)   (114,375)
Net assets
(shareholders'
equity)              37,739,340  60,433,793  69,216,738  53,046,118  14,501,931
Investments .........22,590,520  48,127,301  27,075,657  13,466,706   7,133,340
Total assets ........50,365,065  62,395,597  71,735,025  54,469,925  14,945,301
Long-term obligations 9,282,262           0           0           0           0
Per Share of Trust
 Interest:
  Revenues (loss) ...      (183)       (558)      3,238       1,108       1,418
  Net (loss) ........   (18,013)     (5,333)     (2,834)     (1,763)       (630)
  Net asset value ...    40,454      64,983      74,303      69,342      79,856
 Distributions to
  Investors               4,205       4,186       4,383       1,833       1,466


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

Introduction

The following  discussion and analysis  should be read in  conjunction  with the
Trust's consolidated financial statements and the notes thereto presented below.
Dollar amounts in this discussion are generally rounded to the nearest $1,000.

The  consolidated  financial  statements  include the  accounts of the Trust and
Ridgewood Waterpure  Corporation.  The Trust's investment in the Synergics Hydro
projects  is in the form of a note  receivable  and,  accordingly,  the  Trust's
earnings are in the form of interest income. The Trust uses the equity method of
accounting  for its  investments  in the Maine  Hydro  Projects,  Maine  Biomass
Projects, Santee River Rubber Project, Quantum Conveyor,  MetaSound Systems, the
Egypt Projects and the Mediterranean Fiber Optic Project/GFG.

Through  December 31, 2000,  the Trust used the equity method of accounting  for
its investment in the United Kingdom  Landfill  Projects  because its ability to
exercise  control over these  projects  was expected to be temporary  due to the
anticipated  investment in these  projects by the Growth Fund.  Due to delays in
construction of the additional  landfill gas plants,  the Growth Fund elected to
invest some of its funds in unrelated  projects.  As a result, the Trust expects
to maintain  control over the projects.  As a result,  effective on December 31,
2000,  the Trust began to account  for these  projects  using the  consolidation
method of accounting.

Outlook

The U.S.  electricity  markets are being  restructured and there is a trend away
from regulated  electricity  systems  towards  deregulated,  competitive  market
structures.  The states that the Trust's  Projects operate in have passed or are
considering new legislation that would permit utility  customers to choose their
electricity  supplier  in a  competitive  electricity  market.  The Maine  Hydro
Projects  are  "Qualified  Facilities"  as  defined  under  the  Public  Utility
Regulatory  Policies Act of 1978 and  currently  sell their  electric  output to
utilities  under  long-term  contracts.  Eleven  of the  Maine  Hydro  Projects'
contracts expire in 2008 and the remaining three expire in 2007, 2014 and 2017.

During the term of the  contracts,  the  utilities may or may not attempt to buy
out the contracts prior to expiration. At the end of the contracts, the Projects
will become  merchant plants and may be able to sell the electric output at then
current market prices.  There can be no assurance that future market prices will
sufficient to allow the Trust's Projects to operate profitably.

The Maine Hydro Projects have a limited ability to store water. Accordingly, the
amount of revenue from  electricity  generation  from these Projects is directly
related to river  water  flows,  which have  fluctuated  as much as 30% from the
average  over the past ten  years.  It is not  possible  to  accurately  predict
revenues from the Maine Hydro Projects.

The Maine Biomass  Projects sold electricity  under short-term  contracts during
1997.  The Projects were shutdown and had minimal  operations in 1998,  1999 and
2000.  One  project  will resume  full time  operations  on May 1, 2001 and sell
electricity  to  Constellation  under a nine  month  contract  that  expires  on
February  28,  2002.  The other  project is  currently  shutdown and will not be
operated  (except for required  tests)  unless sales  arrangements  are obtained
which  would  provide  sufficient  revenue  to  allow  the  Project  to  operate
profitably.

All power generation  projects currently owned by the Trust produce  electricity
from  renewable  energy  sources,  such as  hydropower  and biomass  ("renewable
power,"  and  sometimes  called  "green  power").  In the State of  Maine,  as a
condition of licensing,  competitive  generation  providers and power  marketers
will have to demonstrate that at least 30% of their generation portfolio is from
renewable power sources.  Other states in the New England Power Pool have or are
expected to have similar  renewable power licensing  requirements,  although the
percentage of renewable power  generation may differ from state to state.  These
renewable power licensing  requirements  should have a beneficial  effect on the
future profitability of the Trust's Projects.

The Santee River Rubber Project was designed to process waste tires and generate
high quality  crumb rubber.  Construction  of the project began in 1998. In July
2000, the manager of the project informed the Trust that the project had run out
of money.  In November  2000,  the  project  declared  bankruptcy.  The plant is
shutdown and is not manned.  The Trust wrote down its  investment in the project
to zero in the third quarter of 2000.

Quantum Conveyor  designs,  manufactures and sells modular conveyor systems used
by post offices,  distribution  centers,  warehouses and other material handling
facilities.   The  conveyor  system  market  is  very  competitive  and  Quantum
Conveyor's  strategy was to increase its sales and operating results by offering
capable,  inexpensive conveyor systems that were easy to install. In early 2001,
Quantum's funds were exhausted and it reduced its operations to a minimal level.
As a result,  The Trust wrote down its  investment in the project to zero in the
fourth quarter of 2000.

WaterPure   Corporation  is  a  development   stage  company   developing  water
purification  technology.  WaterPure  Corporation's  strategy is to validate the
technology and manufacture water purification systems.

MetaSound  Systems was  developing  digital audio  marketing  systems to provide
messages,  music and sound information to telephone callers on hold or in a call
center  queue.  The  audio  marketing  system  market  is very  competitive  and
MetaSound  Systems'  strategy was to increase its sales and operating results by
offering more flexible systems that offer superior sound quality. In early 2001,
MetaSound's  funds were  exhausted and it ceased  operations.  Accordingly,  the
Trust wrote down its  investment in the project to zero in the fourth quarter of
2000.

In Egypt,  the Trust and the Growth Fund have  constructed  or are developing 15
water  desalinization  plants and 6 electric generation plants. When development
is complete, which is expected to occur in the second quarter of 2001, the total
capacity of the water and power plants is expected to be approximately 3,300,000
U.S. gallons per day and 23.4 megawatts, respectively. Each plant has a contract
with a hotel or  group  of  hotels  for the  sale of the  water  or  electricity
produced from the plant. These contracts  generally have terms of five to thirty
years.

The Trust and the Growth Fund also purchased a 25% interest in GFG. GFG expected
to be the  co-developer of a large  Mediterranean  fiber optic project which was
scheduled  to close in the  second  quarter of 2000.  The Trust and Growth  Fund
expected to fund  approximately  $18 million of this  Mediterranean  Fiber Optic
project when it closed.  In the first quarter of 2000, the Trust determined that
GFG would probably not be able to develop the Mediterranean  Fiber Optic Project
or any other  project.  As a result,  the Trust wrote down its investment in the
project  to  zero  in  the  first  quarter  of  2000.  GFG  subsequently  ceased
operations.

The Trust, through a subsidiary, purchased five landfill gas fired plants in the
United  Kingdom  which  have  contracts  to  sell  the  electricity  to a  quasi
autonomous  non-governmental  organization  an inflation  adjusted  price for 15
years. In 2001, the Growth Fund has provided  additional funds to the subsidiary
to acquire  additional  plants and expects to provide  additional  funds as more
plants are developed. To the extent that the Growth Fund provides funds, it will
receive an undivided interest in the entire package of plants.

The Trust and the Growth Fund also purchased a note  receivable  from Synergics,
Inc.  ("Synergics") for approximately $17 million.  The joint venture intends to
acquire nine  hydroelectric dams owned by Synergics by forgiving the $17 million
of outstanding  debt and paying an additional $1 million to the  shareholders of
Synergics  and  paying  up to an  additional  $1.7  million  of  Synergics'  tax
liabilities that might be incurred as a result of the sale of its assets.

Additional  trends  affecting  the  independent  power  industry  generally  are
described at Item 1 - Business.

Results of Operations

The year ended December 31, 2000 compared to the year ended December 31, 1999.

In 2000,  the Trust had a net loss of  $16,805,000  as compared to a net loss of
$4,975,000 in 1999. The 2000 net loss includes  $12,714,000 of charges  relating
to the writedown of investments. Excluding the writedowns, the 2000 net loss was
$4,091,000.  The  2000 and 1999  results  include  the  following  results  from
projects:


Project                                          2000         1999
----------------------------------------     -----------  -----------

Maine Hydro Projects ............      (2)     $252,000   $  849,000
Maine Biomass Projects ..........      (2)     (640,000)  (1,007,000)
Santee River Rubber .............      (2)     (361,000)      98,000
MetaSound Systems ...............      (2)     (717,000)  (1,526,000)
Quantum Conveyor ................      (2)       79,000     (346,000)
WaterPure Corporation ...........      (1)   (1,140,000)    (979,000)
Egypt Projects ..................      (2)        5,000     (198,000)
Mediterranean Fiber Optic Project      (2)      (57,000)     (49,000)
United Kingdom Landfill Project .      (2)      552,000      180,000
Synergics Projects ..............      (3)      364,000             --

(1) Earnings, net of minority interest.
(2) Equity interest in income (loss) of the project.
(3) Interest income

The decrease in income from the Maine Hydro Projects reflects lower revenues and
higher repair costs in 2000 compared to 1999.  The improved  revenues  reflected
lower-than-average   rainfall,   which   increased   water  flow   through   the
hydroelectric  dams.  The  increase  in repair  costs were  primarily  caused by
damaged generating equipment at one dam.

The decrease in the loss from the shutdown  Maine Biomass  Projects from 1999 to
2000 reflects higher revenue related to the installed  capacity of the plant. As
discussed at Item  1(c)(3)(ii)  above,  the projects are in dispute with the ISO
over the payment of certain revenues  related to the plants'  operation in 1999.
The  disputed  payments  were not  recorded  as income by the  projects  pending
resolution of the disputes.

The Trust  recorded a loss from the Santee River Rubber project in 2000 compared
to income 1999 reflecting the Trust's share of the cost of staffing the plant in
2000 prior to the  project's  bankruptcy  filing.  In 1999,  the plant was under
construction and was not fully staffed.

The  decrease in the loss  related to  MetaSound  Systems  reflects  the reduced
spending  at  MetaSound  in 2000  compared  to 1999.  The  reduced  spending  at
MetaSound was a result of cutbacks in order to conserve funds. MetaSound's funds
were exhausted in the first quarter of 2001 and it has ceased operations.

The Trust recorded  income of $79,000 from Quantum in 2000 compared to a loss of
$346,000 in 1999 due to reduced  spending  at Quantum in 2000  compared to 1999.
The  reduced  spending  at Quantum was a result of cutbacks in order to conserve
funds.  Quantum's  funds were  exhausted in the first quarter of 2001 and it has
reduced its operations to a minimal level.

The Trust's net losses related to WaterPure's increased from $979,000 in 1999 to
$1,140,000  in 2000 due to  increased  spending on research and  development  to
produce a production model using the Superstill water distillation technology.

The Trust recorded  $5,000 of income  related to the Egypt projects  compared to
$198,000  of  losses  in  1999.  In 1999,  all  projects  in  Egypt  were in the
development  stage  whereas in 2000,  the  majority  of these  projects  were in
operation.

The Trust recorded losses of $57,000 and $49,000 in 2000 and 1999, respectively,
related  to its  investment  in GFG.  GFG was not able to  develop  the  planned
Mediterranean Fiber Optic Project and subsequently ceased operations.

The Trust  recorded  interest  income  from the note  related  to the  Synergics
Projects of $364,000. The Trust acquired the note in April 2000.

The increase in income from the Trust's five United  Kingdom  landfill gas fired
plants from $180,000 in 1999 to $552,000 in 2000  primarily  reflects the impact
of a full year of operations.

Interest income at the Trust level decreased to $355,000 from $1,246,000 in 1999
as a result of the lower average cash balances on hand during the year.

Excluding charges for the writedown of investments, Trust-level expenses in 2000
were $877,000  compared to $240,000 in 1999. The increase was primarily a result
of legal and consulting costs associated with the Santee River Rubber Project.

The year ended December 31, 1999 compared to the year ended December 31, 1998.

In 1999,  the Trust had a net loss of  $4,975,0000  as compared to a net loss of
$2,644,000 in 1998. The 1999 and 1998 losses include the following  results from
projects:

Project                                            1999         1998
----------------------------------------     -----------  -----------

Maine Hydro Projects ............      (2)   $  849,000   $  658,000
Maine Biomass Projects ..........      (2)   (1,007,000)    (694,000)
Santee River Rubber .............      (2)       98,000      363,000
MetaSound Systems ...............      (2)   (1,526,000)     (61,000)
Quantum Conveyor ................      (2)     (346,000)     (12,000)
WaterPure Corporation ...........      (1)     (979,000)  (1,881,000)
Egypt Projects ..................      (2)     (198,000)          --
Mediterranean Fiber Optic Project      (2)      (49,000)          --
United Kingdom Landfill Project .      (2)      180,000     (131,000)

(1) Earnings, net of minority interest.
(2) Equity interest in income (loss) of the project.

The increase in income from the Maine Hydro Projects reflects higher revenues in
1999  compared to 1998.  The  improved  revenues  reflected  higher-than-average
rainfall and  snowfall,  which  increased  water flow through the  hydroelectric
dams.

The increase in the loss from the shutdown  Maine Biomass  Projects from 1998 to
1999 reflects the cost of  periodically  operating the plant more  frequently in
1999  compared to 1998.  As discussed  at Item 1 - Buiness,  the projects are in
dispute with the ISO/New England over the payment of certain revenues related to
the plants' operation in 1999. The disputed payments were not recorded as income
by the projects pending resolution of the disputes.

The Trust income from the Santee River Rubber  project in 1999 was lower than in
1998 reflecting the Trust's share of the cost of marketing and administration as
the plant was constructed

The  increase in the loss  related to  MetaSound  Systems  reflects  the Trust's
ownership  of its  investment  for a full year in 1999  compared to one month in
1998. MetaSound Systems' losses are a result of the marketing and sales costs of
introducing its digital audio marketing products.

The increase in the Trust's loss related to Quantum Conveyor  primarily reflects
the Trust's ownership of its investment for a full year in 1999 compared to four
months in 1998 as well as more aggressively marketing its conveyor systems.

WaterPure's  1999 loss related to the research and development of the Superstill
water  distillation  technology.  WaterPure  Corporation's  net  loss  for  1998
primarily reflected the cost of acquiring the assets of Superstill  Corporation,
a company  in Chapter  11  bankruptcy.  Included  in the  assets  acquired  from
Superstill Corporation was in-process research and development with an estimated
fair value of  $1,970,000.  In accordance  with  generally  accepted  accounting
principles, this amount was written-off in the statement of operations.

The Trust  recorded  $198,000 of losses in 1999  related to its  interest in the
Egypt projects that are under  development.  The losses  primarily relate to the
administrative costs of Ridgewood's Egyptian office.

The Trust recorded a loss of $49,000 in 1999 related to its investment in GFG.

The Trust  recorded  $180,000  of income from its June 1999  investment  in five
United Kingdom landfill gas fired plants.

Interest  income  at the  Trust  level  increased  to  $1,246,000  in 1999  from
$2,709,000 in 1998 as a result of the lower average cash balances on hand during
the year.

Excluding  the  $1,970,000  charge  in  1998  discussed  above  related  to  the
acquisition  of  Waterpure  Corporation,   Trust-level  expenses  in  1999  were
consistent  with 1998 levels.  Although the management fee increased by $772,000
as a result of the fee being charged for a full year in 1999,  reimbursements to
the Managing  Shareholder  decreased by $794,000.  Investment  fees  declined by
$337,000  (98%) as a result of the  termination  of the share  offering in April
1998.

Liquidity and Capital Resources

In 2000 and 1999, the Trust's  operating  activities used cash of $3,621,000 and
$3,186,000,  respectively,  primarily as a result of lower Trust interest income
and  increased  research and  development  costs at its  consolidated  WaterPure
subsidiary.

In 1999, the Trust used $21,011,000 in its investing  activities,  primarily the
purchase of its  interest in the United  Kingdom  Landfill  Projects,  the Egypt
Projects and the Mediterranean Fiber Optic Project/GFG.  In 2000, the Trust used
only  $2,468,000  in its  investing  activities  due to  the  completion  of its
investment  program.  In addition,  the Trust's cash balance was improved by the
consolidation of $3,404,000 of cash from the United Kingdom  Landfill  Projects,
which were previously accounted for under the equity method.

In 2000 and 1999,  the use of cash in financing  activities  of  $3,939,000  and
$3,876,000, respectively, was comparable.

During the fourth  quarter of 1997, the Trust and Fleet  Bank,N.A.  (the "Bank")
entered into a revolving line of credit  agreement,  whereby the Bank provides a
three year  committed line of credit  facility of $750,000.  The credit line was
extended until March 2001.  Outstanding  borrowings  bear interest at the Bank's
prime rate or, at the Trust's choice,  at LIBOR plus 2.5%. The credit  agreement
requires the Trust to maintain a ratio of total debt to tangible net worth of no
more than 1 to 1 and a minimum debt service coverage ratio of 2 to 1. The credit
facility  was  obtained  in order to allow the Trust to operate  using a minimum
amount of cash,  maximize  the amount  invested in Projects  and  maximize  cash
distributions to Investors. There were no borrowings under the line of credit in
2000 or 1999.

Obligations of the Trust are generally  limited to payment of Project  operating
expenses,  repayment  of  borrowings  under  the line of  credit,  payment  of a
management fee to the Managing Shareholder,  payments for certain accounting and
legal services to third persons and distributions to shareholders.  Accordingly,
the Trust has not found it  necessary  to retain a  material  amount of  working
capital.

The Trust  anticipates  that during 2001 its cash flow from  operations  will be
adequate to meet its obligations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

   Qualitative Information About Market Risk.

The Trust's investments in financial  instruments are short-term  investments of
working capital or excess cash. Those short-term  investments are limited by its
Declaration  of Trust to  investments  in United  States  government  and agency
securities  or to  obligations  of banks  having at least $5  billion in assets.
Because the Trust invests only in short-term  instruments  for cash  management,
its exposure to interest rate changes is low. The Trust has limited  exposure to
trade accounts  receivable and believes that their carrying amounts  approximate
fair value.

The Trust's  consolidated  United Kingdom  Landfill Gas Projects  investments in
financial  instruments  are short term pound  denominated  obligations  of large
banks and trade accounts receivable and payable.

The Trust's primary market risk exposure is limited interest rate risk caused by
fluctuations  in short-term  interest  rates.  The Trust's  primary  market risk
exposure related to its consolidated  United Kingdom Landfill Gas Projects is to
fluctuations  in the  foreign  currency  exchange  rates.  The  Trust  does  not
anticipate  any changes in its primary market risk exposure or how it intends to
manage it. The Trust does not trade in market risk sensitive instruments.

Quantitative Information About Market Risk

This table provides information about the Trust's financial instruments that are
defined by the  Securities  and  Exchange  Commission  as market risk  sensitive
instruments. These include only short-term U.S. government and agency securities
and bank  obligations.  The table  includes  principal cash balances and related
weighted average interest rates by contractual maturity dates.

                                                December 31, 2000
                                              Expected Maturity Date
                                                        2001
                                                      (U.S. $)
Bank Deposits and Certificates of Deposit           $ 1,327,000
Average interest rate                                       5.6%

                                                      (U.S. $)
Bank Deposits denominated in United Kingdom Pounds  $ 3,404,000
Average interest rate                                       5.6%


Item 8.  Financial Statements and Supplementary Data.

Index to Financial Statements
Report of Independent Accountants ..............   F-2
Balance Sheets at December 31, 2000 and 1999 ...   F-3
Statement of Operations for Years Ended
  December 31, 2000, 1999 and 1998 .............   F-4
Statement of Changes in Shareholders' Equity for
  Years Ended December 31, 2000, 1999 and 1998 . F-5 Statement of Cash Flows for
  Years Ended December 31, 2000, 1999 and 1998
 F-6
Notes to Financial Statements ..................   F-7 to F-17

Financial Statements for Maine Hydro Projects
Financial Statements for Maine Biomass Projects
Financial Statements for U.K. Landfill Gas Projects

     All schedules are omitted  because they are not  applicable or the required
information is shown in the financial statements or notes thereto.

     The  financial  statements  are  presented  in  accordance  with  generally
accepted accounting principles for operating companies,  using consolidation and
equity method accounting  principles.  This differs from the basis used by three
prior independent power programs  sponsored by the Managing  Shareholder,  which
present the Trust's  investments  in Projects on the estimated fair value method
rather than the consolidation and equity accounting method.

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

     Neither  the  Trust nor the  Managing  Shareholder  has had an  independent
accountant  resign  or  decline  to  continue  providing  services  since  their
respective inceptions and neither has dismissed an independent accountant during
that period.  During that period of time no new independent  accountant has been
engaged by the Trust or the Managing Shareholder, and the Managing Shareholder's
current accountants, PricewaterhouseCoopers LLP, have been engaged by the Trust.

PART III

Item 10.  Directors and Executive Officers of the Registrant.

(a)  General.

     As Managing  Shareholder of the Trust,  Ridgewood  Power LLC has direct and
exclusive  discretion  in  management  and  control of the  affairs of the Trust
(subject to the general  supervision and review of the Independent  Trustees and
the  Managing  Shareholder  acting  together  as the  Board of the  Trust).  The
Managing  Shareholder will be entitled to resign as Managing  Shareholder of the
Trust  only  (i)  with  cause   (which  cause  does  not  include  the  fact  or
determination  that  continued  service  would be  unprofitable  to the Managing
Shareholder) or (ii) without cause with the consent of a majority in interest of
the  Investors.  It may be removed from its capacity as Managing  Shareholder as
provided in the Declaration.

     Ridgewood  Holding,  which was incorporated in April 1992, is the Corporate
Trustee of the Trust.

(b)      Managing Shareholder.

         Ridgewood  Power  Corporation  was  incorporated  in February 1991 as a
Delaware corporation for the primary purpose of acting as a managing shareholder
of business  trusts and as a managing  general  partner of limited  partnerships
which  are  organized  to  participate  in  the  development,  construction  and
ownership of  Independent  Power  Projects.  It organized the Trust and acted as
managing  shareholder until April 1999. On or about April 21, 1999 it was merged
into the current Managing Shareholder,  Ridgewood Power LLC. Ridgewood Power LLC
was  organized in early April 1999 and has no business  other than acting as the
successor to Ridgewood Power Corporation.

         Robert  E.  Swanson  has been the  President,  sole  director  and sole
stockholder of Ridgewood Power  Corporation since its inception in February 1991
and is now the  controlling  member,  sole manager and President of the Managing
Shareholder.  All of the equity in the Managing  Shareholder is or will be owned
by Mr. Swanson or by family trusts. Mr. Swanson has the power on behalf of those
trusts to vote or dispose of the membership equity interests owned by them.

         The Managing  Shareholder  has also organized  Power I, Power II, Power
III, Power IV, the Growth Fund, and the Egypt Fund, as Delaware  business trusts
to participate in the  independent  power  industry.  Ridgewood Power LLC is now
also their managing  shareholder.  The business  objectives of these five trusts
are similar to those of the Trust.

         A number of other  companies  are  affiliates  of Mr.  Swanson  and the
Managing Shareholder. Each of these also was organized as a corporation that was
wholly-owned  by Mr.  Swanson.  In April  1999,  most of them were  merged  into
limited  liability  companies with similar names and Mr. Swanson became the sole
manager  and  controlling   owner  of  each  limited  liability   company.   For
convenience,  the  remainder  of  this  Memorandum  will  discuss  each  limited
liability company and its corporate predecessor as a single entity.

         The  Managing   Shareholder   is  an  affiliate  of  Ridgewood   Energy
Corporation  ("Ridgewood  Energy"),  which has organized and operated 48 limited
partnership  funds and one  business  trust  over the last 18 years (of which 25
have  terminated)  and which had total capital  contributions  in excess of $190
million.  The  programs  operated by Ridgewood  Energy have  invested in oil and
natural  gas  drilling  and  completion  and  other  related  activities.  Other
affiliates  of  the  Managing   Shareholder  include  Ridgewood  Securities  LLC
("Ridgewood Securities"),  an NASD member which has been the placement agent for
the private  placement  offerings  of the six trusts  sponsored  by the Managing
Shareholder  and the funds  sponsored by  Ridgewood  Energy;  Ridgewood  Capital
Management  LLC  ("Ridgewood  Capital"),  which assists in offerings made by the
Managing  Shareholder and which is the sponsor of four privately offered venture
capital funds (the  Ridgewood  Capital  Venture  Partners and Ridgewood  Capital
Venture  Partners II funds);  Ridgewood  Power VI LLC ("Power  VI"),  which is a
managing  shareholder  of the Growth Fund,  and RPM. Each of these  companies is
controlled by Robert E. Swanson, who is their sole director or manager.

         Set forth below is certain information concerning Mr. Swanson and other
executive officers of the Managing Shareholder.

         Robert E.  Swanson,  age 54, has also served as  President of the Trust
since its  inception in 1991 and as  President of RPM,  Power I, Power II, Power
III,  Power  IV,  the  Growth  Fund,  and  Egypt  Fund  since  their  respective
inceptions. Mr. Swanson has been President and registered principal of Ridgewood
Securities  and became the  Chairman  of the Board of  Ridgewood  Capital on its
organization in 1998. He also is Chairman of the Board of the Ridgewood  Capital
Venture  Partners I and II  venture  capital  funds.  In  addition,  he has been
President  and sole  stockholder  of  Ridgewood  Energy  since its  inception in
October 1982.  Prior to forming  Ridgewood Energy in 1982, Mr. Swanson was a tax
partner at the former New York and Los Angeles law firm of Fulop & Hardee and an
officer in the Trust and Investment  Division of Morgan  Guaranty Trust Company.
His  specialty  is in personal tax and  financial  planning,  including  income,
estate  and gift tax.  Mr.  Swanson  is a member  of the New York  State and New
Jersey bars, the Association of the Bar of the City of New York and the New York
State  Bar  Association.  He  is a  graduate  of  Amherst  College  and  Fordham
University Law School.

         Robert L. Gold,  age 42, has served as Executive  Vice President of the
Managing  Shareholder,  RPM, the Trust,  Power I, Power II, Power III, Power IV,
the Growth Fund and Egypt Fund since their respective  inceptions,  with primary
responsibility  for  marketing  and  acquisitions.  He  has  been  President  of
Ridgewood  Capital since its  organization  in 1998. As such, he is President of
the Ridgewood  Capital  Venture  Partners I and II funds.  He has served as Vice
President  and General  Counsel of  Ridgewood  Securities  Corporation  since he
joined the firm in December  1987.  Mr. Gold has also served as  Executive  Vice
President of Ridgewood Energy since October 1990. He served as Vice President of
Ridgewood  Energy from December 1987 through  September  1990. For the two years
prior to joining Ridgewood Energy and Ridgewood Securities Corporation, Mr. Gold
was a corporate attorney in the law firm of Cleary,  Gottlieb,  Steen & Hamilton
in New York City where his experience  included  mortgage  finance,  mergers and
acquisitions, public offerings, tender offers, and other business legal matters.
Mr.  Gold is a member of the New York  State bar.  He is a  graduate  of Colgate
University and New York University School of Law.

         Martin V. Quinn,  age 53, has been the  Executive  Vice  President  and
Chief Operating Officer of Ridgewood Power since April 2000. Before that, he had
assumed the duties of Chief  Financial  Officer of  Ridgewood  Power in November
1996 under a  consulting  arrangement.  In April  1997,  he became a Senior Vice
President and Chief Financial Officer of Ridgewood Power and the Fund.

         Mr. Quinn has over 30 years of experience in financial  management  and
corporate mergers and acquisitions, gained with major, publicly-traded companies
and an  international  accounting  firm. He formerly served as Vice President of
Finance  and Chief  Financial  Officer of  NORSTAR  Energy,  an energy  services
company,  from February 1994 until June 1996. From 1991 to March 1993, Mr. Quinn
was  employed by  Brown-Forman  Corporation,  a  diversified  consumer  products
company and distiller, where he was Vice President-Corporate  Development.  From
1981 to 1991, Mr. Quinn held various officer-level positions with NERCO, Inc., a
mining and natural resource  company,  including Vice President-  Controller and
Chief  Accounting  Officer  for his last six years and Vice  President-Corporate
Development.  Mr.  Quinn's  professional  qualifications  include his  certified
public  accountant  qualification in New York State,  membership in the American
Institute of Certified  Public  Accountants,  six years of  experience  with the
international accounting firm of PricewaterhouseCoopers,  LLP, and a Bachelor of
Science degree in Accounting and Finance from the University of Scranton (1969).

         Daniel V. Gulino,  age 40, has been Senior Vice  President  and General
Counsel of the Managing Shareholder since August 2000. He began his legal career
as an associate for Pitney,  Hardin,  Kipp & Szuch, a large New Jersey law firm,
where his experience included corporate acquisitions and transactions.  Prior to
joining  Ridgewood,  Mr. Gulino was in-house  counsel for several large electric
utilities,  including GPU, Inc.,  Constellation Power Source, and PPL Resources,
Inc., where he specialized in non-utility generation projects, independent power
and power  marketing  transactions.  Mr.  Gulino  also has  experience  with the
electric and natural gas purchasing of industrial  organizations,  having worked
as  in-house  counsel  for  Alumax,  Inc.  (now  part  of  Alcoa)  where  he was
responsible  for,  among  other  things,   Alumax's  electric  and  natural  gas
purchasing  program.  Mr.  Gulino  is a member of the New  Jersey  State Bar and
Pennsylvania State Bar. He is a graduate of Fairleigh  Dickinson  University and
Rutgers University School of Law - Newark.

         Christopher  I.  Naunton,  36,  has been the Vice  President  and Chief
Financial  Officer of the Managing  Shareholder  since April 2000. From February
1998 to April 2000,  he was Vice  President  of Finance of an  affiliate  of the
Managing  Shareholder.  Prior  to that  time,  he was a  senior  manager  at the
predecessor  accounting  firm  of  PricewaterhouseCoopers   LLP.  Mr.  Naunton's
professional    qualifications   include   his   certified   public   accountant
qualification in Pennsylvania, membership in the American Institute of Certified
Public  Accountants and a Bachelor of Science degree in Business  Administration
from Bucknell University (1986).

         Mary Lou Olin,  age 48, has served as Vice  President  of the  Managing
Shareholder,  RPM, Ridgewood  Capital,  the Trust, Power I, Power II, Power III,
Power IV and the Growth Fund since  their  respective  inceptions.  She has also
served as Vice President of Ridgewood Energy since October 1984, when she joined
the  firm.  Her  primary  areas  of  responsibility   are  investor   relations,
communications and administration.  Prior to her employment at Ridgewood Energy,
Ms. Olin was a Regional  Administrator at McGraw-Hill Training Systems where she
was employed for two years.  Prior to that, she was employed by RCA Corporation.
Ms. Olin has a Bachelor of Arts degree from Queens College.

(c)  Management Agreement.

     The  Trust  has  entered  into a  Management  Agreement  with the  Managing
Shareholder  detailing  how the  Managing  Shareholder  will render  management,
administrative and investment advisory services to the Trust. Specifically,  the
Managing  Shareholder  will  perform  (or arrange  for the  performance  of) the
management and administrative  services required for the operation of the Trust.
Among other services,  it will administer the accounts and handle relations with
the Investors, provide the Trust with office space, equipment and facilities and
other  services  necessary for its  operation and conduct the Trust's  relations
with  custodians,  depositories,  accountants,  attorneys,  brokers and dealers,
corporate  fiduciaries,  insurers,  banks and others, as required.  The Managing
Shareholder  will also be  responsible  for  making  investment  and  divestment
decisions, subject to the provisions of the Declaration.

     The Managing  Shareholder  will be obligated to pay the compensation of the
personnel and all  administrative  and service expenses necessary to perform the
foregoing  obligations.  The Trust  will pay all other  expenses  of the  Trust,
including  transaction  expenses,  valuation  costs,  expenses of preparing  and
printing  periodic  reports for Investors and the Commission,  postage for Trust
mailings,  Commission fees,  interest,  taxes, legal,  accounting and consulting
fees,  litigation expenses and other expenses properly payable by the Trust. The
Trust will reimburse the Managing  Shareholder  for all such Trust expenses paid
by it.

     As  compensation  for the  Managing  Shareholder's  performance  under  the
Management Agreement,  the Trust is obligated to pay the Managing Shareholder an
annual  management fee described below at Item 13 -- Certain  Relationships  and
Related Transactions.

     The Board of the Trust (including both initial  Independent  Trustees) have
approved  the initial  Management  Agreement  and its  renewals.  Each  Investor
consented to the terms and  conditions  of the initial  Management  Agreement by
subscribing to acquire  Investor Shares in the Trust.  The Management  Agreement
will remain in effect until January 4, 2002 and year to year  thereafter as long
as it is  approved  at least  annually by (i) either the Board of the Trust or a
majority  in interest of the  Investors  and (ii) a majority of the  Independent
Trustees.  The agreement is subject to termination at any time on 60 days' prior
notice by the Board,  a majority in interest of the  Investors  or the  Managing
Shareholder.  The  agreement  is subject to  amendment  by the parties  with the
approval of (i) either the Board or a majority in interest of the  Investors and
(ii) a majority of the Independent Trustees.

(d) Executive Officers of the Trust.

     Pursuant  to  the  Declaration,  the  Managing  Shareholder  has  appointed
officers of the Trust to act on behalf of the Trust and sign documents on behalf
of the Trust as authorized  by the Managing  Shareholder.  Mr.  Swanson has been
named the President of the Trust and the other  executive  officers of the Trust
are identical to those of the Managing Shareholder.

     The  officers  have the  duties and powers  usually  applicable  to similar
officers of a Delaware  business  corporation  in carrying  out Trust  business.
Officers  act under the  supervision  and control of the  Managing  Shareholder,
which is entitled to remove any officer at any time. Unless otherwise  specified
by the Managing Shareholder, the President of the Trust has full power to act on
behalf of the Trust. The Managing Shareholder expects that most actions taken in
the name of the  Trust  will be taken by Mr.  Swanson  and the  other  principal
officers in their capacities as officers of the Trust under the direction of the
Managing Shareholder rather than as officers of the Managing Shareholder.

(e)  The Independent Panel Members.

     The  Declaration  provides for an  Independent  Review Panel (the "Panel"),
with   responsibility   for  independently   reviewing  and  approving  material
transactions  ("Ridgewood Program Transactions") between the Trust and any other
investment  programs  sponsored by the Managing  Shareholder  or its  Affiliates
("Ridgewood Programs").

     All Ridgewood  Program  Transactions  (which include material  transactions
between the Trust or entities in which the Trust  invests,  on the one hand, and
other  Ridgewood  Programs or entities in which they invest or have control,  on
the other),  must be  approved by a majority of the Panel  Members (if there are
only two Panel Members, both must approve) or by a Majority of the Investors. In
reviewing and approving a Ridgewood Program  Transaction,  the Panel Members are
be guided by the  provisions of Delaware law regarding the  responsibilities  of
directors  of a  business  corporation  who  pass  upon a  transaction  with  an
affiliated corporation.  In so doing, the Panel Members are subject to duties of
loyalty to the Trust and its Investors  and care in reviewing  the  transaction,
and are  obligated to consider  the entire  fairness of the  transaction  to the
Trust.  There is no  requirement,  however,  that the Trust  participate  in the
transaction  on  identical  terms  with  the  other  Ridgewood   Programs.   The
Declaration specifies,  in addition,  that the Panel Members will be entitled to
the benefits of the "business  judgment rule" of Delaware law, which  exonerates
directors for their negligence or mistaken decisions in the absence of bad faith
or clear conflicts of interest.

     The Independent Review Panel provisions were included in the Declaration in
recognition  that  the  Trust's  investment  program   anticipates   significant
co-investment  by the Trust in Projects in which other  Ridgewood  Programs will
invest. In particular,  the investment in the Maine Hydro Projects involved a $7
million co-  investment  with Power IV and the  investment  in the Maine Biomass
Projects  also involved a $7 million  co-investment  with Power IV. The Managing
Shareholder  intends to have the  Venture  Funds  co-invest  in  Quantum  and in
MetaSound and it is possible that future  projects  might involve  co-investment
with the Growth Fund or the Venture  Fund.  The Managing  Shareholder  concluded
that given the potential  conflicts of interest and the additional  complexities
and responsibilities that characterize co-investment decisions, the Trust should
create a mechanism for independent review and approval of co-investments.

     The Managing Shareholder designated the initial Panel of two Panel Members.
All  incumbent  Panel  Members  must  consent  for the Panel to take  action.  A
majority of the Managing  Shareholder  and the incumbent  Panel Members,  acting
together,  may  authorize an increase to no more than eight Panel  Members (or a
decrease to not fewer than two) and may fill  vacancies  on the Panel within 180
days. If there is no incumbent Panel Member,  however,  vacancies must be filled
by the Managing Shareholder with the approval of a Majority of the Investors.  A
Panel Member may not be an  Affiliate of the Trust and may not be an  investment
advisor or underwriter for the Trust, a person  beneficially owning five percent
or more of the Investor Shares,  an entity in which the Trust  beneficially owns
five percent or more of the outstanding equity securities,  an agent or employee
of the  Trust or its  subsidiaries,  a member  of the  immediate  family  of any
individual  described  above,  or a person  who  served  at any time  after  the
beginning of the second-to-last full calendar year as legal counsel to the Trust
or the Managing Shareholder,  or a partner,  principal or employee of that legal
counsel.

     The Panel is not required to review other  transactions  that might involve
the Managing Shareholder or its Affiliates and the Trust, such as the Management
Agreement or  temporary  advances of funds by the  Managing  Shareholder  to the
Trust. The Managing  Shareholder,  in its sole discretion,  may refer such other
transactions to the Panel for advice, and the Panel, in its sole discretion, may
elect  to  review  and  report  to the  Managing  Shareholder  on  the  referred
transaction,  or to decline to review it. Neither the Managing  Shareholder  nor
the Panel Members shall incur liability to the Trust or any Shareholder by their
decisions  to  refer  or not to  refer,  or to  review  or  not to  review,  any
transaction that is not a Ridgewood Program Transaction.

     The Panel Members are not trustees of the Trust,  have no general fiduciary
responsibility for the Trust's investments or operations, and have no continuing
oversight  responsibilities  for the Trust.  The Panel meets only on the call of
the Managing Shareholder. Panel Members may resign and may be removed either for
cause by action of at least two-thirds of the remaining Panel Members or for any
reason by action of the holders of at least two-thirds of the Investor Shares.

     Compensation  of the Panel Members is set in the  Declaration at $5,000 per
year,  plus  out-of-pocket  expenses  incurred..  If  the  Managing  Shareholder
certifies in the Trust's  records that there is no reasonable  probability  that
the Trust will engage in further Ridgewood Program Transactions,  the Panel will
be suspended  and will take no further  action.  During that  period,  the Panel
Members'  compensation  will cease.  A suspended  Panel may be reinstated by the
Managing Shareholder at any time.

     The current Panel Members are Ralph O. Hellmold,  Jonathan C. Kaledin,  and
Joseph  Ferrante,  Jr.  who also  serve as  independent  trustees  of two  Prior
Programs, Ridgewood Power II and Ridgewood Power III. Both are independent power
programs sponsored by the Managing  Shareholder.  Independent panel members must
approve  transactions  between  their  program and the Managing  Shareholder  or
companies  affiliated  with  the  Managing   Shareholder,   but  have  no  other
responsibilities.  Neither Mr.  Hellmold  nor Mr.  Kaledin  nor Mr.  Ferrante is
otherwise  affiliated with the Trust, any of the Trust's officers or agents, the
Managing  Shareholder,  any  other  Trustee,  any  affiliates  of  the  Managing
Shareholder and any other Trustees, or any director, officer or agent of any of
the foregoing.

         Ralph O.  Hellmold,  age 60,  is  Chairman  of The  Private  Investment
Banking  Company  ("PIBC") and President of Hellmold  Associates,  Inc., both of
which are financial  advisory firms that assist companies raise capital,  divest
or acquire businesses or restructure  corporate  organizations.  Other financial
advisory services provided by PIBC and Hellmold Associates, Inc. include mergers
and  acquisitions  advice,  valuations,  fairness  opinions  and expert  witness
testimony.  In addition to working with troubled  companies or their  creditors,
Hellmold  Associates,  Inc. also acts as general partner of funds that invest in
the securities of financially distressed companies.

         From  1987 to 1990,  when he  formed  Hellmold  Associates,  Inc.,  Mr.
Hellmold was a Managing Director at Prudential-Bache  Capital Funding,  where he
served as co-head of the  Corporate  Finance  Group,  co-head of the  Investment
Banking  Committee and head of the Financial  Restructuring  Group. From 1974 to
1987, Mr. Hellmold was a partner at Lehman Brothers and its successors, where he
worked in the General  Corporate  Finance  Group and  co-founded  the  Financial
Restructuring Group. Prior thereto, he was a research analyst at Lehman Brothers
and at Francis I. du Pont & Company. He received his undergraduate  degree magna
cum laude from Harvard College and an M.I.A. from Columbia  University.  He is a
Chartered  Financial  Analyst  and a member of the New York  Society of Security
Analysts.  Mr.  Hellmold is the holder of one- half share in each of Power I and
Power II, a shareholder of one-half Share in the Trust and a limited  partner or
shareholder in numerous  limited  partnerships and a business trust sponsored by
Ridgewood  Energy to invest in oil and gas development  and related  businesses.
Mr. Hellmold is a director of Core Materials Corporation,  Columbus, Ohio and of
International Aircraft Investors, Torrance, California.

         Jonathan C. Kaledin,  age 43, has been New York Regional Counsel of The
Nature  Conservancy,  the international  land conservation  organization,  since
September  1995.  From 1990 to June 1995, he was the  Executive  Director of the
National  Water  Funding  Council  ("NWFC"),  an  advocacy  and  public  affairs
organization representing municipalities, businesses, financial institutions and
others on the financial aspects of clean water infrastructure  projects required
by the federal Clean Water Act and the federal Safe Drinking Water Act. Prior to
running  the NWFC,  Mr.  Kaledin  practiced  law in both the  private and public
sectors,  specializing in  environmental  and real estate  matters.  Mr. Kaledin
received his undergraduate degree magna cum laude from Harvard College and a law
degree from New York University.

         The  Independent  Trustees  and the Managing  Shareholder  expanded the
number of  Independent  Trustees  to three in January  2000 and  elected  Joseph
Ferrante,  Jr. as the additional  Independent Trustee. Mr. Ferrante, age 56, has
been a lawyer in private  practice in  Ridgewood,  New Jersey for more than five
years specializing in business and taxation matters.  He received a Juris Doctor
degree  in  law  from  the  George   Washington   University  in  1970  and  his
undergraduate  degree  from the Johns  Hopkins  University.  He  advises a large
number of start-up and entrepreneurial companies.

(f)  Corporate Trustee

     The  Corporate  Trustee of the Trust is Ridgewood  Holding.  Legal title to
Trust  property  is now and in the future  will be in the name of the Trust,  if
possible,  or Ridgewood Holding as trustee.  Ridgewood Holding is also a trustee
of Ridgewood  Power I, Ridgewood  Power II,  Ridgewood  Power III, Power IV, the
Growth Fund and of an oil and gas business trust  sponsored by Ridgewood  Energy
and is expected to be a trustee of other similar  entities that may be organized
by the Managing  Shareholder and Ridgewood Energy. The President,  sole director
and sole  stockholder  of  Ridgewood  Holding  is Robert E.  Swanson;  its other
executive  officers  are  identical to those of the  Managing  Shareholder.  The
principal  office of  Ridgewood  Holding is at 1105 North Market  Street,  Suite
1300, Wilmington, Delaware 19899.

(g)  Section 16(a) Beneficial Ownership Reporting Compliance

     All individuals  subject to the requirements of Section 16(a) have complied
with those reporting requirements during 1999.

(h)  RPM.

     As discussed above at Item 1 - Business, RPM assumed day- to-day management
responsibility  for the Maine Biomass  Projects in March 1999. Like the Managing
Shareholder,  RPM is wholly  owned by Robert E.  Swanson.  It will enter into an
"Operation  Agreement" with the Indeck Maine Energy,  LLC under which RPM, under
the  supervision  of the  Managing  Shareholder,  will  provide the  management,
purchasing, engineering, planning and administrative services for the Providence
Project.  RPM will charge the Trust at its cost for these  services  and for the
Trust's  allocable  amount of  certain  overhead  items.  RPM  shares  space and
facilities with the Managing Shareholder and its affiliates.  To the extent that
common  expenses can be  reasonably  allocated to RPM, the Managing  Shareholder
may, but is not required to,  charge RPM at cost for the  allocated  amounts and
such  allocated  amounts will be borne by the Trust and other  programs.  Common
expenses that are not so allocated will be borne by the Managing Shareholder.

     Initially,  the Managing  Shareholder does not anticipate  charging RPM for
the full amount of rent,  utility supplies and office expenses allocable to RPM.
As a result,  both  initially and on an ongoing  basis the Managing  Shareholder
believes  that  RPM's  charges  for its  services  to the Trust are likely to be
materially  less than its  economic  costs and the costs of engaging  comparable
third persons as managers.  RPM will not receive any  compensation  in excess of
its costs.

     Allocations  of costs  will be made  either  on the  basis of  identifiable
direct costs,  time records or in proportion to each  program's  investments  in
Projects  managed by RPM; and  allocations  will be made in a manner  consistent
with generally accepted accounting principles.

     RPM will not  provide any  services  related to the  administration  of the
Trust, such as investment, accounting, tax, investor communication or regulatory
services,  nor will it  participate  in  identifying,  acquiring or disposing of
Projects.  RPM will not have the power to act in the Trust's name or to bind the
Trust,  which will be  exercised  by the  Managing  Shareholder  or the  Trust's
officers.

     The  Operation  Agreement  does not have a fixed term and is  terminable by
RPM,  by the  Managing  Shareholder  or by vote of a  majority  in  interest  of
Investors,  on 60 days' prior notice. The Operation  Agreement may be amended by
agreement of the  Managing  Shareholder  and RPM;  however,  no  amendment  that
materially  increases the obligations of the Trust or that materially  decreases
the  obligations  of RPM shall  become  effective  until at least 45 days  after
notice of the amendment,  together with the text thereof,  has been given to all
Investors.

     The  executive  officers  of RPM  are Mr.  Swanson  (President),  Mr.  Gold
(Executive  Vice  President),  Mr. Quinn  (Executive  Vice  President  and Chief
Operating Officer),  Mr. Gulino (Senior Vice President and General Counsel), Mr.
Naunton  (Vice  President  and  Chief  Financial  Officer)  and Ms.  Olin  (Vice
President.

Item 11.  Executive Compensation.

     The Trust  reimburses RPM at cost for services  provided by RPM's employees
and reimburses the Managing  Shareholder at allocated cost for services  outside
the  scope of the  Management  Agreement;  no such  reimbursement  per  employee
exceeded  $60,000  in 1999 or 2000.  Information  as to the fees  payable to the
Managing  Shareholder  and certain  affiliates  is  contained at Item 13 Certain
Relationships and Related Transactions.

     As  compensation  for  services  rendered  to the  Trust,  pursuant  to the
Declaration,  each Independent  Panel Member is entitled to be paid by the Trust
the sum of $5,000 annually and to be reimbursed for all reasonable out-of-pocket
expenses  relating to attendance at Board  meetings or otherwise  performing his
duties to the Trust. The Independent Panel Members and the Managing  Shareholder
are entitled to review the compensation payable to the Independent Panel Members
annually  and increase or decrease it as they see  reasonable.  The consent of a
majority of the Panel  Members and the consent of the  Managing  Shareholder  is
necessary  for a change in  compensation.  The Trust is not  entitled to pay the
Independent Panel Members  compensation for consulting  services rendered to the
Trust outside the scope of their duties to the Trust without similar approval.

     Donald C. Stewart,  age 55, is a consultant to the Fund and not an employee
of the Managing  Shareholder  or any of its  affilaites.  However,  he serves as
Ridgewood International Development, LLC's Managing Director and chief operating
officer.  From 1994,  he had served as an advisor and  consultant  to  Ridgewood
Power  and  was  the  principal  person  involved  in  finding,   reviewing  and
negotiating  acquisitions for the six Power Trusts.  Mr. Stewart has 30 years of
expertise  in the  field of  independent  power  generation,  fuel  procurement,
engineering  and finance.  Mr. Stewart spent the first ten years of his business
career as a certified public accountant with a major  international firm. He has
been the  Chairman of Vermont Gas  Systems,  a regulated  public  utility,  Vice
Chairman of Consolidated  Power Company, a developer of large scale cogeneration
projects and President of Hercules  Engines,  Inc., a manufacturer of industrial
engines  and  electrical  generation  equipment.  Mr.  Stewart has a Bachelor of
Science degree from Lehigh University.

         Instead of salary, Mr. Stewart,  and two other consultants to the Fund,
Michael  Patten  and  Zach  Girges,   receive  a  development   fee  of  4%  and
3%,respectively,  of the capital cost of each completed  Egyptian Project at the
time it goes into operation (a "closing fee"),  for a total  development fees of
10% of Project  capital  cost.  Mr.  Stewart,  Mr. Patten and Mr. Girges are not
required to continue providing services to REI after a Project is completed, but
they are paid annual  development  fees of 4/10,  3/10 and 3/10 of one  percent,
respectively,  of the  capital  cost of each  Project.  The annual  fees are not
deferred or modified based on the Projects' profits or losses.

         Ridgewood Holding,  the Corporate Trustee of the Trust, is not entitled
to compensation  for serving in such capacity,  but is entitled to be reimbursed
for Trust  expenses  incurred by it which are  properly  reimbursable  under the
Declaration.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

     The Managing  Shareholder  purchased for cash one full Investor  Share.  By
virtue of its purchase of Investor Shares, the Managing  Shareholder is entitled
to the same ratable  interest in the Trust as all other  purchasers  of Investor
Shares.  No other Trustees or executive  officers of the Trust acquired Investor
Shares in the Trust's  offering.  No person  beneficially owns 5% or more of the
Investor Shares.

     The  Managing  Shareholder  was  issued one  Management  Share in the Trust
representing  the  beneficial  interests and  management  rights of the Managing
Shareholder in its capacity as the Managing Shareholder  (excluding its interest
in the Trust  attributable to Investor Shares it acquired in the offering).  The
management  rights of the Managing  Shareholder  are described in further detail
above  at Item 1 -  Business  and  below  in Item 10.  Directors  and  Executive
Officers of the Registrant. Its beneficial interest in cash distributions of the
Trust and its  allocable  share of the  Trust's  net  profits and net losses and
other items attributable to the Management Share are described in further detail
below at Item 13 -- Certain Relationships and Related Transactions.

Item 13.  Certain Relationships and Related Transactions.

     The  Declaration  provides  that cash flow of the  Trust,  less  reasonable
reserves which the Trust deems necessary to cover anticipated Trust expenses, is
to be  distributed  to the  Shareholders  from time to time as the  Trust  deems
appropriate.  The  allocation  of  distributions  between the  Investors and the
Managing  Shareholder is described at Item 11(a) - Description  of  Registrant's
Securities to be Registered - Distribution and Dissolution Rights.

     The Trust made distributions to the Managing Shareholder (which is a member
of the Board of the Trust) and  Investors in 2000 and 1999 as stated at Item 5 -
Market Price of and  Dividends  on the  Registrant's  Common  Equity and Related
Stockholder  Matters.  The Trust paid fees to the Managing  Shareholder  and its
affiliates as follows:

Fee                 Paid to      2000      1999       1998      1997      1996

Investment fee      Managing
                    Shareholder    $ ---  $ ---      $337,158 1,145,212  $33,346
Placement agent fee Ridgewood
 and sales commis-  Securities
 sions              Corporation      ---    ---       277,008   572,606  166,673
Organizational,     Managing
 distribution and   Shareholder
 offering fee                        ---    ---    1,448,944 3,435,636 1,000,038
Management fee      Managing
                    Shareholder 2,257,357 2,377,941 1,606,269      ---      ---
Due diligence       Managing
 expenses           Shareholder      ---    969,793   830,823  603,639     4,500
Reimbur-            Managing
 sements            Shareholder      ---       ---    793,654  392,752      ---

     The  investment  fee equaled 2% of the proceeds of the offering of Investor
Shares and was payable for the Managing  Shareholder's services in investigating
and evaluating investment  opportunities and effecting investment  transactions.
The placement agent fee (1% of the offering proceeds) and sales commissions were
also paid from proceeds of the offering, as was the organizational, distribution
and offering fee (5% of offering  proceeds) for legal,  accounting,  consulting,
filing, printing,  distribution,  selling, closing and organization costs of the
offering.

     In addition to the foregoing, the Trust reimbursed the Managing Shareholder
and RPM at cost for expenses  and fees of  unaffiliated  persons  engaged by the
Managing  Shareholder  for Trust  business and for certain  expenses  related to
management of Projects.

     Other  information in response to this item is reported in response to Item
12. Executive Compensation,  which information is incorporated by reference into
this Item 13.

Item 14.  Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.

 (a)  Financial Statements.

     See the Index to Financial Statements in Item 8 hereof.

 (b) Reports on Form 8-K.

     No Form 8-K was filed  with the  Commission  by the  Registrant  during the
quarter ending December 31, 2000.

 (c)  Exhibits

     3.A.  Certificate of Trust of the Registrant.  Incorporated by reference to
Exhibit 3.A of the Registrant's  Registration  Statement on Form 10, dated April
30, 1998.

     3.B.  Amended Declaration of Trust of
the  Registrant.  Incorporated  by reference to Exhibit 3.B of the  Registrant's
Registration Statement on Form 10, dated April 30, 1998.

     3.C. Amendment No. 2 to Declaration of Trust.  Incorporated by reference to
Exhibit 3.C of the Registrant's  Registration  Statement on Form 10, dated April
30, 1998.

     3.D. Amendment No. 3 to Declaration of Trust.  Incorporated by reference to
Exhibit 3.D of the Registrant's  Registration  Statement on Form 10, dated April
30, 1998.

     10.A.  Agreement  of  Merger,  dated  as of  July  1,  1996,  by and  among
Consolidated Hydro Maine, Inc., CHI Universal,  Inc.,  Consolidated Hydro, Inc.,
Ridgewood  Maine Power  Partners,  L.P. and Ridgewood  Maine Hydro  Corporation.
Incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed
by  Ridgewood   Electric  Power  Trust  IV  (Commission  File  No.0-25430,   CIK
0000930364) with the Commission on January 8, 1997.

     10.B.  Letter,  dated  November  15,  1996,  amending  Agreement of Merger.
Incorporated  by  reference  to Exhibit 2.2 of  Amendment  No. 1 to the -Current
Report on Form 8-K filed by Ridgewood  Electric Power Trust IV (Commission  File
No. 0-25430, CIK 0000930364) with the Commission on January 9, 1997.

     10.C.  Letter,  dated  December  3,  1996,  amending  Agreement  of Merger.
Incorporated by reference to Exhibit 2.3 of the Current Report on Form 8-K filed
by  Ridgewood   Electric  Power  Trust  IV  (Commission  File  No.0-25430,   CIK
0000930364) with the Commission on January 8, 1997.

     10.D. Operation,  Maintenance and Administration Agreement,  dated November
1996, by and among  Ridgewood  Maine Hydro  Partners,  L.P., CHI Operations,
Inc. and Consolidated Hydro, Inc. Incorporated by reference to Exhibit 10 of the
Current  Report  on  Form  8-K  filed  by  Ridgewood  Electric  Power  Trust  IV
(Commission File  No.0-25430,  CIK 0000930364) with the Commission on January 8,
1997.

     10.E.  Management  Agreement,  dated  as of April  12,  1996,  between  the
Registrant and Ridgewood Power Corporation. Page 172

     10.F.  Agreement  to Purchase  Membership  Interests,  dated as of June 11,
1997, by and between  Ridgewood Maine,  L.L.C.  and Indeck Maine Energy,  L.L.C.
Incorporated  by reference to Exhibit 2.A. of Amendment No. 1 to Current  Report
on Form  8-K  filed by  Ridgewood  Electric  Power  Trust  IV  (Commission  File
No.0-25430, CIK 0000930364), dated July 1, 1997.

     10.G.  Amended and Restated  Operating  Agreement  of Indeck Maine  Energy,
L.L.C., dated as of June 11, 1997.  Incorporated by reference to Exhibit 2.B. of
Amendment No. 1 to Current Report on Form 8-K filed by Ridgewood  Electric Power
Trust IV (Commission File No.0-25430, CIK 0000930364) dated July 1, 1997.

     10.H.  Omitted.  No longer in force.

     10.I.  Limited  Liability Company Agreement of Santee River Rubber Company,
LLC. Page

The Registrant agrees to furnish supplementally a copy of any omitted exhibit or
schedule to agreements filed as exhibits to the Commission upon request.


     21.   Subsidiaries of the Registrant               Page
     24.   Powers of Attorney                           Page
     27.   Financial Data Schedule                      Page


<PAGE>

SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Signature                     Title                          Date



RIDGEWOOD ELECTRIC POWER TRUST V (Registrant)

By:/s/ Robert E. Swanson    President and Chief      March 30, 2001
       Robert E. Swanson     Executive Officer

        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

By:/s/ Robert E. Swanson    President and Chief      March 30, 2001
       Robert E. Swanson     Executive Officer

By:/s/ Martin V. Quinn    Executive Vice President and
       Martin V. Quinn    Chief Operating Officer    March 30, 2001

By:/s/ Christopher I. Naunton   Vice President and    March 30, 2001
       Christopher I. Naunton  Chief Financial Officer

RIDGEWOOD POWER LLC  Managing Shareholder  March 30, 2001

By:/s/ Robert E. Swanson    President
       Robert E. Swanson

 /s/ Robert E. Swanson  *   Independent Panel Member    March 30, 2001
       Ralph O. Hellmold

 /s/ Robert E. Swanson  *   Independent Panel Member    March 30, 2001
       Jonathan C. Kaledin

 /s/ Robert E. Swanson  *   Independent Panel Member    March 30, 2001
       Joseph Ferrante, Jr.

*  As attorney-in-fact for the Independent Trustee


<PAGE>
               Ridgewood Electric Power Trust V

              Consolidated Financial Statements

               December 31, 2000, 1999 and 1998



<PAGE>
                        Report of Independent Accountants

To the Shareholders and Trustees of
Ridgewood Electric Power Trust V:

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements  of operations  and  comprehensive  income,  changes in
shareholders' equity and of cash flows present fairly, in all material respects,
the financial position of Ridgewood Electric Power Trust V (the "Trust") and its
subsidiaries at December 31, 2000 and 1999, and the results of their  operations
and their cash flows for each of the three  years in the period  ended  December
31, 2000, in conformity with  accounting  principles  generally  accepted in the
United States of America.  These financial  statements are the responsibility of
the Trust's  management;  our  responsibility  is to express an opinion on these
financial  statements  based on our  audits.  We  conducted  our audits of these
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States of America,  which  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.



PricewaterhouseCoopers LLP
New York, NY
March 23, 2001


<PAGE>
Ridgewood Electric Power Trust V
Consolidated Balance Sheet
--------------------------------------------------------------------------------

                                                          December 31,
Assets:                                           2000             1999
                                               ------------    ------------
Cash and cash equivalents ..................   $  4,731,081    $ 14,759,184
Accounts receivable ........................        538,183            --
Due from affiliates ........................        164,237         675,185
Other current assets .......................        712,732         404,351
                                               ------------    ------------
         Total current assets ..............      6,146,233      15,838,720
                                               ------------    ------------

Plant and equipment ........................     12,928,899            --
Less - Accumulated depreciation ............     (1,022,536)           --
                                               ------------    ------------
      Plant and equipment, net .............     11,906,363            --
                                               ------------    ------------

Electric power sales contract ..............     10,956,161            --
Less - Accumulated amortization ............     (1,234,212)           --
                                               ------------    ------------
       Electric power sales contract, net ..      9,721,949            --
                                               ------------    ------------
Investments:
    Maine Hydro Projects ...................      5,346,948       5,663,505
    Maine Biomass Projects .................      5,485,287       5,825,271
    MetaSound Systems ......................           --           921,163
    Quantum Conveyor .......................           --         2,810,410
    Santee River Rubber ....................           --         8,186,456
    Egypt Projects .........................      6,299,001       4,736,093
    GFG ....................................           --         1,497,670
    United Kingdom Landfill Projects .......           --        16,916,309
    Synergics, Inc. ........................      5,459,284            --
                                               ------------    ------------
         Total assets ......................   $ 50,365,065    $ 62,395,597
                                               ------------    ------------
Liabilities and shareholders' equity:
Liabilities:
Current portion of long-term debt ..........   $    622,386    $       --
Accounts payable and accrued expenses ......        903,579         174,857
Due to affiliates ..........................        645,822         449,178
                                               ------------    ------------
 Total current liabilities .................      2,171,787         624,035
                                               ------------    ------------

Long-term debt, less current portion .......      9,215,778            --
Deferred income taxes ......................        764,901            --
Minority interest ..........................        473,259       1,337,769

Commitments and contingencies

Shareholders' equity:
 Shareholders' equity (932.8875 investor
 shares issued and outstanding) ............     38,154,142      60,644,421
Subscriptions receivable ...................           --           (23,000)
                                               ------------    ------------
 Shareholders' equity, net .................     38,154,142      60,621,421
Managing shareholder's accumulated deficit
 (1 management share issued and outstanding)       (414,802)       (187,628)
                                               ------------    ------------
Total shareholders' equity .................     37,739,340      60,433,793
                                               ------------    ------------
Total liabilities and shareholders' equity .   $ 50,365,065    $ 62,395,597
                                               ------------    ------------

        See accompanying notes to the consolidated financial statements.
<PAGE>


Ridgewood Electric Power Trust V
Consolidated Statement of Operations
--------------------------------------------------------------------------------

                                          For the Year Ended December 31,
                                   --------------------------------------------
                                        2000          1999             1998
                                   ------------    ------------    ------------
Revenue:
Interest income ................   $    352,638    $  1,476,695    $  2,767,348
Interest income from Synergics,
 Inc ...........................        364,289            --              --
Equity interest in income (loss)
 of:
    Maine Hydro Projects .......        252,250         849,456         657,989
    Maine Biomass Projects .....       (639,984)     (1,006,796)       (694,321)
    MetaSound Systems ..........       (717,135)     (1,526,250)        (61,227)
    Quantum Conveyor ...........         79,280        (345,760)        (12,191)
    Santee River Rubber ........       (361,042)         98,488         363,351
    Egypt Projects .............          5,008        (197,759)           --
    GFG ........................        (57,379)        (49,163)           --
    United Kingdom Landfill
     Projects ..................        551,520         180,321            --
                                   ------------    ------------    ------------

Total revenue (loss) ...........       (170,555)       (520,768)      3,020,949
                                   ------------    ------------    ------------
Expenses:
Investment fee paid to the
 managing shareholder ..........           --              --           337,158
Project due diligence costs ....           --           969,793         830,823
Management fees ................      2,257,357       2,377,941       1,606,269
Allocated management costs .....           --              --           793,654
Accounting and legal fees ......        238,161         100,104          59,719
Purchased research and
 development ...................           --              --         1,969,951
Research and development .......      2,005,494       1,258,816            --
Other expenses .................        283,874         140,042          40,342
Write down of investments ......     12,714,090            --              --
                                   ------------    ------------    ------------
Total expenses .................     17,498,976       4,846,696       5,637,916
                                   ------------    ------------    ------------

Loss from operations ...........    (17,669,531)     (5,367,464)     (2,616,967)

Minority interest in loss
 (income) of consolidated
    subsidiaries ...............        864,510         392,405         (26,695)
                                   ------------    ------------    ------------
Net loss .......................   $(16,805,021)   $ (4,975,059)   $ (2,643,662)
                                   ------------    ------------    ------------




        See accompanying notes to the consolidated financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Statement of Changes In Shareholders' Equity
For The Years Ended December 31, 2000, 1999 and 1998
--------------------------------------------------------------------------------

                                              Subscription Managing
                                  Shareholders Receivable Shareholder  Total
                                  ------------ ---------- ----------- ---------
Shareholders' equity, January
 1, 1998 (762.8 investor shares
 and 1 management share) ........  61,682,179  $(8,604,653) (31,408) 53,046,118

Capital contributions, net
 (170.0875 investor shares) .....  22,944,716    8,491,153     --    22,944,716

Cash distributions ..............  (4,089,130)        --    (41,304) (4,130,434)

Net loss for the year ...........  (2,617,225)        --    (26,437) (2,643,662)
                                  -----------  ----------  --------  ----------
Shareholders' equity, December
 31, 1998 (932.8875 investor
 shares and 1 management share) .  69,429,387    (113,500)  (99,149) 69,216,738

Capital contributions, net ......     (22,638)     90,500      --        67,862

Cash distributions ..............  (3,904,757)       --     (39,412) (3,944,169)

Net loss for the year ...........  (4,925,308)       --     (49,751) (4,975,059)

Cumulative translation adjustment      67,737        --         684      68,421
                                  -----------  ----------   -------  -----------
Shareholders' equity, December
 31, 1999 (932.8875 investor
 shares and 1 management share) .  60,644,421     (23,000) (187,628) 60,433,793

Capital contributions, net ......        --        23,000      --        23,000

Cash distributions ..............  (3,922,376)       --     (39,620) (3,961,996)

Net loss for the year ........... (16,636,971)       --    (168,050)(16,805,021)

Cumulative translation adjustment  (1,930,932)       --     (19,504) (1,950,436)
                                 ------------  ----------  --------  ----------
Shareholders' equity, December
 31, 2000 (932.8875 investor
 shares and 1 management share) .$ 38,154,142  $    --    $(414,802) 37,739,340
                                  ----------  ----------   --------  ----------

Ridgewood Electric Power Trust V
Consolidated Statement of Comprehensive Loss
--------------------------------------------------------------------------------

                                         For the Year Ended December 31,
                                    -------------------------------------------
                                        2000           1999           1998
                                    ------------   ------------    ------------

Net loss ........................   $(16,805,021)  $ (4,975,059)   $ (2,643,662)

Cumulative translation adjustment     (1,950,436)        68,421            --
                                    ------------   ------------    ------------

Comprehensive loss ..............   $(18,755,457)  $ (4,906,638)   $ (2,643,662)
                                    ------------   ------------    ------------

        See accompanying notes to the consolidated financial statements.


<PAGE>
Ridgewood Electric Power Trust V
Consolidated Statement of Cash Flows
--------------------------------------------------------------------------------

                                            For the Year Ended December 31,
                                          --------------------------------------
Cash flows from operating activities:        2000           1999         1998
                                          ------------    ---------   ----------
Net loss ............................... $(16,805,021) $(4,975,059) $(2,643,662)
                                          ------------    ---------   ----------
Adjustments to reconcile net loss to
 net cash used in operating activities:
Charge for purchased research and
 development ...........................         --           --      1,969,951
Minority interest in (loss) income
 of subsidiary .........................     (864,510)    (392,405)      26,695
Interest income from Synergics Projects      (364,289)        --           --
Write down of investments ..............   12,714,090         --           --
Equity interest in (income) loss of:
    Maine Hydro Projects ...............     (252,250)    (849,456)    (657,989)
    Maine Biomass Projects .............      639,984    1,006,796      694,321
    MetaSound Systems ..................      717,135    1,526,250       61,227
    Quantum Conveyor ...................      (79,280)     345,760       12,191
    Santee River Rubber ................      361,042      (98,488)    (363,351)
    Egypt Projects .....................       (5,008)     197,759         --
    GFG ................................       57,379       49,163         --
    United Kingdom Landfill Projects ...     (551,520)    (180,321)        --
Changes in assets and liabilities,
 net of acquisitions:
Increase in other current assets .......      (20,661)    (141,862)     (95,319)
Increase (decrease) in accounts payable
 and accrued expenses ..................      123,958      (19,674)    (906,754)
Decrease (increase) in due to/from
 affiliate, net ........................      707,592      345,551     (879,613)
                                           ---------    ----------   ----------
Total adjustments ......................   13,183,662    1,789,073     (138,641)
                                           ----------   ----------   ----------
Net cash used in operating activities ..   (3,621,359)  (3,185,986)  (2,782,303)
                                           ------------  ----------  ----------
Cash flows from investing activities:
Investment in Maine Biomass Projects ...     (300,000)    (525,250)    (383,276)
Investment in MetaSound Systems ........         --           --     (2,508,640)
Investment in Quantum Conveyor .........         --        (60,000)  (3,108,361)
Investment in Santee River Rubber ......     (354,667)        --     (8,984,891)
Investment in Synergics Hydro ..........   (5,094,995)        --          --
Investment in WaterPure Corporation,
 net of cash acquired ..................         --           --       (266,472)
Investment in Egypt Projects ...........   (2,208,896)  (4,933,852)        --
Investment in GFG ......................         --     (1,546,833)        --
Investment in United Kingdom Landfill
 Projects ..............................         --    (16,667,567)        --
Distributions from Maine Hydro projects       568,807    1,403,240    1,135,526
Distributions from United Kingdom
 Landfill projects .....................    1,517,760         --           --
Distributions from Santee River Rubber .         --        920,000      340,274
Cash acquired by consolidation of
 United Kingdom Landfill Projects ......    3,404,243         --           --
Deferred due diligence costs ...........         --        399,498     (245,480)
                                          ------------  -----------   ----------
Net cash used in investing activities ..   (2,467,748) (21,010,764) (14,021,320)
                                          ------------   ----------   ----------
Cash flows from financing activities:
Proceeds from shareholders' contributions      23,000       70,206   25,471,126
Selling commissions and offering
 costs paid ............................         --         (2,344)  (2,526,410)
Cash distributions to shareholders .....   (3,961,996)  (3,944,169)  (4,130,434)
                                         ------------  -----------    ---------
Net cash (used in) provided by
 financing activities ..................   (3,938,996)  (3,876,307)  18,814,282
                                         ------------  -----------  ----------
Net (decrease) increase in cash
 and cash equivalents ..................  (10,028,103) (28,073,057)   2,010,659
Cash and cash equivalents,
 beginning of year .....................   14,759,184   42,832,241   40,821,582
                                         ------------  -----------  -----------
Cash and cash equivalents, end of year . $  4,731,081 $ 14,759,184  $42,832,241
                                         ------------  -----------   ----------

               See accompanying notes to the financial statements.
<PAGE>


Ridgewood Electric Power Trust V
Notes to the Consolidated Financial Statements
--------------------------------------------------------------------------------
1.       Organization and Purpose

Nature of Business
Ridgewood Electric Power Trust V (the "Trust") was formed as a Delaware business
trust in March 1996,  by  Ridgewood  Energy  Holding  Corporation  acting as the
Corporate Trustee. The managing shareholder of the Trust is Ridgewood Power LLC.
The Trust began offering shares on April 12, 1996 and  discontinued its offering
on April 15, 1998. The Fund had no operations  prior to the  commencement of the
share offering.

The Trust has been organized to invest primarily in independent power generation
facilities,  in the development of these facilities and in other projects. These
independent power generation  facilities will include  cogeneration  facilities,
which produce both  electricity  and heat energy and other power plants that use
various fuel sources (except nuclear).

2.       Summary of Significant Accounting Policies

Principles of  consolidation  and accounting for investment in power  generation
projects
The consolidated  financial  statements include the accounts of the Trust and an
affiliate owned more than 50%. All material intercompany  transactions have been
eliminated.

The Trust uses the equity method of accounting for its investments in affiliates
in which the Trust has the ability to exercise  significant  influence  over the
operating  and  financial  policies  of the  affiliate  but does not control the
affiliate.  The Trust's  share of the earnings of the  affiliates is included in
the consolidated results of operations.

Use of estimates
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities,  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from the estimates.

Cash and cash equivalents
The Trust considers all highly liquid investments with maturities when purchased
of  three  months  or  less to be cash  and  cash  equivalents.  Cash  and  cash
equivalents consist of commercial paper and funds deposited in bank accounts.

Foreign currency translation
The financial  statements of the Company's  non-United  States  subsidiaries are
translated  into United States  dollars  using  current rates of exchange,  with
gains or losses included in the cumulative translation adjustment account in the
shareholders' equity section of the balance sheet.

Plant and equipment
Machinery  and  equipment,   consisting  principally  of  electrical  generating
equipment,  is stated at cost. Renewals and betterments that increase the useful
lives of the assets are  capitalized.  Repair and maintenance  expenditures  are
expensed as incurred.

Depreciation  is recorded  using the  straight-line  method  over the  estimated
useful life of the assets, which ranges from 3 to 15 years.

Intangible asset
A portion of the  purchase  price of the United  Kingdom  Landfill  Projects was
assigned to the Electric Power Sales  Contracts and is being  amortized over the
15 year life on the contract on a straight-line basis.

Income taxes
The Company  utilizes the asset and liability  method of  accounting  for income
taxes for its United Kingdom securities.  No provision is made for United States
income taxes in the accompanying financial statements as the income or losses of
the Trust are passed  through and included in the tax returns of the  individual
shareholders of the Trust.

Offering costs
Costs associated with offering Trust shares (selling  commissions,  distribution
and offering  costs) are reflected as a reduction of the  shareholders'  capital
contributions.

Due diligence costs relating to potential power projects
Costs relating to the due diligence  performed on potential project  investments
are initially  deferred,  until such time as the Trust determines whether or not
it will make an investment in that project. Costs relating to completed projects
are capitalized and costs relating to rejected projects are expensed at the time
of rejection.

These costs consist of payments for consultants and other  unaffiliated  parties
performing financial,  engineering, legal and other due diligence procedures and
negotiations.  It also includes travel and other out-of-pocket costs incurred by
employees of  affiliates  of the managing  shareholder  investigating  potential
project investments.

Subscriptions receivable
Capital contributions are recorded upon receipt of the appropriate  subscription
documents.  Subscriptions  receivable  from  shareholders  are  reflected  as  a
reduction of shareholders' equity.

3.       Investments

The Trust has the following investments:

                                                Investment at December 31,
                              Accounting        -------------------------
     Project Name                Method             2000          1999
-----------------------   --------------------   -----------   -----------
Maine Hydro Projects ..   Equity Method          $ 5,346,948   $ 5,663,505
Maine Biomass Projects    Equity Method            5,485,287     5,825,271
MetaSound Systems .....   Equity Method                 --         921,163
Quantum Conveyor ......   Equity Method                 --       2,810,410
Santee River Rubber ...   Equity Method                 --       8,186,456
Egypt Projects ........   Equity Method            6,299,001     4,736,093
GFG ...................   Equity Method                 --       1,497,670
United Kingdom Landfill
 Projects .............   Consolidation/Equity    14,650,629    16,916,309
WaterPure Corporation .   Consolidation            1,170,427     1,570,424
Synergics, Inc. .......   Interest                 5,459,284          --
                                                 -----------   -----------
                                                 $38,411,576   $48,127,301
                                                 -----------   -----------
Maine Hydro Projects
In 1996,  Ridgewood  Maine Hydro  Partners,  L.P.  ("Ridgewood  Hydro L.P.") was
formed as a Delaware limited partnership and acquired 14 hydroelectric projects,
located in Maine (the "Maine Hydro Projects"), from a subsidiary of Consolidated
Hydro,  Inc. The assets acquired include a total of 11.3 megawatts of electrical
generating  capacity.  The electricity  generated is sold to Central Maine Power
Company and Bangor Hydro Company under long-term  contracts.  The purchase price
was $13,628,395 cash, including transaction costs.

The Trust owns a 50% limited  partnership  interest in Ridgewood  Hydro L.P. and
50% of the outstanding common stock of Ridgewood Maine Hydro Corporation,  which
is the sole general  partner of Ridgewood  Hydro L.P. The remaining 50% is owned
by Ridgewood  Electric Power Trust IV ("Trust IV").  Ridgewood  Power LLC is the
managing partner of the Trust and Trust IV.

The Trust's 50%  investment  in the Maine Hydro  Projects is accounted for under
the equity method of accounting. The Trust's equity in the earnings of the Maine
Hydro Projects has been included in the financial statements since acquisition.

The Maine Hydro  Projects  are  operated  by a  subsidiary  of CHI Energy,  Inc.
(formerly  Consolidated  Hydro,  Inc.),  under  an  Operation,  Maintenance  and
Administrative  Agreement.  The annual operator's fee is $307,500,  adjusted for
inflation,  plus an  annual  incentive  fee equal to 50% of the net cash flow in
excess of a target amount. The Maine Hydro Projects recorded $414,089,  $323,003
and $429,714 of expense under this  arrangement  during the years ended December
31, 2000,  1999 and 1998,  respectively.  The  agreement  has a five-year  term,
expiring on June 30, 2001, and can be renewed for two additional five-year terms
by mutual consent.

Summarized financial information for the Maine Hydro Projects is as follows:

         Balance Sheet Information

                               December 31, 2000   December 31, 1999
                                     -----------   -----------

Current assets ...................   $   760,310   $ 1,573,177
Electric power sales contract, net     9,044,877    10,105,173
Other non-current assets .........     1,697,986     1,270,396
                                     -----------   -----------
Total assets .....................   $11,503,173   $12,948,746
                                     -----------   -----------

Current liabilities ..............   $   809,278   $ 1,621,737
Partners' equity .................    10,693,895    11,327,009
                                     -----------   -----------
Total liabilities and equity .....   $11,503,173   $12,948,746
                                     -----------   -----------

         Statement of Operations Information

                              For the Year Ended December 31,
                            ----------------------------------------
                               2000         1999           1998
                            -----------   -----------    -----------

Revenue .................   $ 3,750,095   $ 4,756,189    $ 4,511,361
Total expenses ..........     3,271,902     3,002,245      3,217,846
Interest income (expense)        26,307       (55,033)        22,464
                            -----------   -----------    -----------
Net income ..............   $   504,500   $ 1,698,911    $ 1,315,979
                            -----------   -----------    -----------

The Maine Hydro Projects qualify as small power production  facilities under the
Public  Utility  Regulatory  Policies Act  ("PURPA").  PURPA  requires that each
electric  utility company  operating at the location of a small power production
facility,  as defined,  purchase the electricity generated by such facility at a
specified or negotiated  price. The Maine Hydro Projects sell  substantially all
of their electrical output to two public utility companies,  Central Maine Power
Company ("CMP") and Bangor Hydro-Electric Company ("BHC"), under long-term power
purchase  agreements.  Eleven of the twelve power purchase  agreements  with CMP
expire in December 2008 and are renewable  for an additional  five-year  period.
The twelfth power purchase  agreement with CMP expires in December 2007 with CMP
having the option to extend the contract for three more five-year  periods.  The
two power purchase agreements with BHC expire December 2014 and February 2017.

Maine Biomass Projects
In 1997,  through a  subsidiary,  the Trust  purchased  a  preferred  membership
interest in Indeck Maine Energy,  L.L.C. ("Maine Biomass Projects"),  which owns
two electric  power  generating  stations  fueled by waste wood.  The  aggregate
purchase price was $7,297,971 including transaction costs. Each project has 24.5
megawatts of electrical generating capacity. The Penobscot project is located in
West Enfield, Maine and the Eastport project is located in Jonesboro, Maine. The
Maine Biomass Projects were shut down in January 1998. The facilities  currently
sell installed  capacity and are  periodically  restarted for testing or for the
sale of energy during peak periods of demand.  The cost of maintaining the idled
facilities in good condition is approximately  $100,000 per month. The Penobscot
facility is expected to resume full time operations in May 2001.

The  preferred  membership  interest  entitles  the  Trust  to  receive  an  18%
cumulative  annual return on its $7,000,000  capital  contribution  to the Maine
Biomass  Projects from the  operating net cash flow from the projects.  Trust IV
also purchased an identical preferred membership interest in Indeck Maine. After
payments in full to the preferred membership interests,  up to $2,520,000 of any
remaining  operating  net cash flow  during the year is paid to the other  Maine
Biomass Project members. Any remaining operating net cash flow is payable 25% to
the Trust and Trust IV and 75% to the other Maine Biomass Project members.

In 2000,  1999 and 1998,  the  Trust  loaned  $300,000,  $525,250  and  375,000,
respectively,  to the Maine Biomass Projects.  The loan is in the form of demand
notes that bear interest at 5% per annum.  Trust IV made identical  loans to the
Maine  Biomass  Projects.  The other Maine Biomass  Project  members also loaned
$600,000,  $1,050,500  and $750,000 to the Maine Biomass  Projects with the same
terms in 2000, 1999 and 1998, respectively.

The Trust's  investment in the Maine Biomass Projects is accounted for under the
equity method of accounting. The Trust's equity in the loss of the Maine Biomass
Projects has been included in the financial statements since acquisition.

The Penobscot and Eastport projects were operated by Indeck Operations, Inc., an
affiliate of the members of Indeck Maine. The annual operator's fee is $300,000,
of which  $200,000  is  payable  contingent  upon  the  Trusts  receiving  their
cumulative  annual return.  The management  agreement had a term of one year and
automatically continued for successive one year terms, unless canceled by either
the Maine Biomass Projects or Indeck Operations, Inc. The Maine Biomass Projects
exercised their right to terminate the contract on March 1, 1999 because certain
preferred  membership  interest  payments have not been made. Under an Operating
Agreement  with  the  Trust,   Ridgewood   Power   Management  LLC   ("Ridgewood
Management"),  formerly  Ridgewood  Power  Management  Corporation),  an  entity
related to the managing  shareholder  through common ownership,  began providing
management, purchasing, engineering, planning and administrative services to the
Maine Biomass Projects.  Ridgewood  Management  charges the projects at its cost
for these  services  and for the  allocable  amount of certain  overhead  items.
Allocations of costs are on the basis of identifiable direct costs, time records
or in proportion to amounts invested in projects.

From June  thorough  December  1999,  the  facilities  periodically  operated on
dispatch from ISO-New England, Inc. (the "ISO") and also submitted offers to the
ISO to run at high prices during power emergencies.  The facilities have claimed
the ISO owes them  approximately  $14 million for the electricity  products they
provided in those  periods and the ISO has claimed that no material  revenues at
all are due to the  projects.  As a result,  on October 24,  2000,  Indeck Maine
filed a complaint  against the ISO in the Superior  Court of Delaware  alleging,
among other things, that the ISO's actions resulted in a breach of an express or
implied  contract,  violated  certain  consumer  protection laws and amounted to
fraud.  The ISO removed the litigation to Federal District Court in Delaware and
Indeck  Maine  has  filed a motion to remand  the  matter  back to the  Delaware
courts. The motion has not yet been decided by the Federal Court. The facilities
have not recorded any of the disputed revenues in their financial statements and
it is too early to estimate the outcome of the dispute.

Summarized financial information for the Maine Biomass Projects is as follows:

         Balance Sheet Information

                                    December 31,
                               --------------------------
                                  2000          1999
                               -----------    -----------
Current assets: ............   $ 1,117,357    $ 1,103,266
Non-current assets .........     2,970,042      3,154,813
                               -----------    -----------
Total assets ...............   $ 4,087,399    $ 4,258,079
                               -----------    -----------

Current liabilities: .......   $ 5,504,279    $ 4,394,990
Members' deficit ...........    (1,416,880)      (136,911)
                               -----------    -----------
Total liabilities and equity   $ 4,087,399    $ 4,258,079
                               -----------    -----------

         Statement of Operations Information

                  For the Year Ended December 31,
                 -----------------------------------------
                    2000           1999          1998
                 -----------    -----------    -----------
Revenue ......   $ 2,017,481    $ 1,391,039    $ 1,430,296
Total expenses     3,297,450      3,583,700      2,847,896
                 -----------    -----------    -----------
Net loss .....   $(1,279,969)   $(2,192,661)   $(1,417,600)
                 -----------    -----------    -----------

MetaSound Corporation
In December  1998,  through a  subsidiary,  the Trust  purchased  an interest in
MetaSound Systems, Inc. ("MetaSound Systems"), which is developing digital audio
marketing systems connected to the internet. The systems are designed to provide
digital quality  messages,  music and sound  information to telephone callers on
hold or in a call center queue.  For an aggregate  purchase price of $2,508,640,
the Trust purchased  4,676,000  shares of Series C Preferred Stock, a warrant to
purchase up to 4,676,000 additional shares at $.54 per share expiring on May 31,
1999, and a second warrant to purchase up to 2,000,000 additional shares at $.54
per share expiring in 2003.  The Series C Preferred  Stock may be converted into
an equal  number of shares of common stock at the Trust's  option.  The Series C
Preferred  Stock  automatically  converts  into  common  stock in the event of a
public offering of MetaSound Systems meeting certain requirements.

Ridgewood  Capital Venture  Partners,  LLC and Ridgewood  Capital  Institutional
Venture Partners,  LLC (collectively the "Venture Funds"),  investment  programs
sponsored by an affiliate of the managing  shareholder,  invested  $3,066,236 in
MetaSound Systems in May 1999 to exercise the 4,676,000 share warrant and obtain
a $500,000  Convertible  Promissory  Note.  The Trust and the Venture  Funds own
undivided  interests  in  MetaSound  Systems in  proportion  to the capital they
contributed. The Trust and the Venture Funds own approximately a 42% interest in
MetaSound Systems.

The Trust's  investment  in MetaSound  Systems is accounted for under the equity
method of accounting.  The Trust's  equity in the loss of MetaSound  Systems has
been included in the financial  statements since December 1,1998. In early 2001,
MetaSound's  funds were  exhausted and it ceased  operations.  Accordingly,  the
Trust  recorded a writedown of $204,028 in 2000 to reduce the  investment to its
estimated fair value of zero.

Summarized financial information for MetaSound Systems is as follows.  Financial
information for MetaSound Systems as of and for the year ended December 31, 2000
is not available:

         Balance Sheet Information

                                               December 31, 1999
                                            ------------------------
Current assets                                          $ 2,012,000
Other non-current assets                                    382,000
                                            ------------------------
Total assets                                            $ 2,394,000
                                            ------------------------

Current liabilities                                     $ 1,486,000
Non-current liabilities                                     482,000
Members' equity                                             426,000
                                            ------------------------
Total liabilities and equity                            $ 2,394,000
                                            ------------------------

         Statement of Operations Information

                       For the Year Ended     For the Period December
                       December 31, 1999      1, 1998 to December 31,
                                                   1998
                       -------------------    ------------------------

Revenue                  $  990,000                    $ 28,000
Expenses                  6,361,000                     257,000
                       -------------------    ------------------------
Net loss               $ (5,371,000)                 $ (229,000)
                       -------------------    ------------------------

Quantum Conveyor
In September  1998,  the Trust  purchased a 15%  membership  interest in Quantum
Conveyor  Systems,  LLC, a newly organized  Delaware limited  liability  company
("Quantum  Conveyor")  through a  subsidiary  of the  Trust.  At the same  time,
Quantum  Conveyor  acquired  substantially  all of the assets and certain of the
liabilities  of  Quantum  Conveyor  Systems,   Inc.  Quantum  Conveyor  designs,
manufactures   and  sells  modular   conveyor  systems  used  by  post  offices,
distribution centers, warehouses, and other material handling facilities.

At the same time as the Trust's subsidiary purchased its membership interest, it
made a secured loan of $2,985,000 to Quantum Conveyor. In addition,  the Trust's
subsidiary  had an  option  that  expired  on  March 2,  1999,  to  purchase  an
additional  10%  membership  interest  for $10,000  which was  exercised  by the
Venture Funds in February 1999. The Trust's subsidiary extended a line of credit
to loan up to an addition  $1,990,000 to Quantum  Conveyor through June 1, 2003,
under the same terms as the  $2,985,000  loan.  The Venture  Funds  provided the
maximum $1,990,000 of loans under this line of credit in 1999. In July 1999, the
Trust and the Venture Funds  purchased an  additional 2% membership  interest in
Quantum  Conveyor for $100,000,  funded  $60,000 by the Trust and $40,000 by the
Venture Funds.  The Trust and the Venture Funds own the subsidiary in proportion
to their capital contributions.

The  remaining  membership  interests  of  Quantum  Conveyor  are owned by three
individuals. As part of the transaction,  the president of Quantum Conveyor, who
owns  a  membership   interest,   accepted  a  $4,000,000   promissory  note  in
satisfaction of all indebtedness of Quantum Conveyor to him. The promissory note
has the same terms as the Trust's secured loan to Quantum Conveyor.

The  secured  loan and  promissory  note bear  interest  at 12% per  year.  From
September  1998 to August  2000,  no interest  payments by Quantum  Conveyor are
required. From September 2000 to June 2003, Quantum Conveyor is required to make
quarterly  payments of interest only. From July 2003 to September 2008,  Quantum
Conveyor  must make  equal  quarterly  payments  sufficient  to fully  repay the
principal and interest due under the note by September 2008.

The Trust's  investment  in Quantum  Conveyor is accounted  for under the equity
method of  accounting.  The Trust's  equity in the loss of Quantum  Conveyor has
been included in the financial statements since September 1998.

In early 2001, Quantum's funds were exhausted and it reduced its operations to a
minimal level. As a result, the Trust recorded a writedown of $2,889,690 in 2000
to reduce the investment to its estimated fair value of zero.

Summarized financial information for Quantum Conveyor is as follows:

Balance Sheet Information

                                       December 31,
                               ----------------------------
                                   2000           1999
                               ------------    ------------
Current assets .............   $  1,445,745    $  1,691,186
Non-current assets .........      4,986,880       5,265,476
                               ------------    ------------
Total assets ...............   $  6,432,625    $  6,956,662
                               ------------    ------------

Current liabilities ........   $  1,103,764    $  1,349,781
Non-current liabilities ....     11,581,689      10,291,596
Members' deficit ...........     (6,252,828)     (4,684,715)
                               ------------    ------------
Total liabilities and equity   $  6,432,625    $  6,956,662
                               ------------    ------------

Statement of Operations Information

                                                          For the Period
              For the Year Ended    For the Year Ended    August 20, 1998 to
               December 31, 2000    December 31, 1999     December 31, 1998
                      -----------       -----------       -----------
Revenue ...........   $ 4,980,502       $ 2,619,559       $   437,806
Expenses ..........     6,548,886         6,621,965         1,222,616
                      -----------       -----------       -----------
Net loss ..........   $(1,568,384)      $(4,002,406)      $  (784,810)
                      -----------       -----------       -----------

Santee River Rubber
In August  1998,  the  Trust  and an  affiliate,  Trust V,  purchased  preferred
membership  interests  in Santee River Rubber  Company,  LLC, a newly  organized
South Carolina limited liability  company ("Santee River Rubber").  Santee River
Rubber was  building a waste tire and rubber  processing  facility  located near
Charleston, South Carolina. The facility, which was expected to begin full scale
operations in 2000,  was designed to receive and process waste tires and produce
fine  crumb  rubber of  various  sizes.  The Trust  and Trust IV  purchased  the
interests  through a limited  liability company owned one-third by the Trust and
two-thirds by Trust IV. The Trust's share of the purchase  price was  $8,979,639
and Trust IV's share of the purchase price was $4,489,819.

Until January 2000,  Santee River Rubber paid the Trust and Trust IV interest at
12% per year on $11,000,000 of their  investment.  After  operations  began, the
Trusts were  entitled  to receive all cash flow after  payment of debt and other
obligations  until the Trusts  received a  cumulative  20% return on their total
investment.  Thereafter,  the Trusts were to receive 25% of any  remaining  cash
flow available for  distribution.  All cash  distributions  and tax  allocations
received  from  Santee  River  Rubber were  shared  two-thirds  by the Trust and
one-third by Trust IV. The remaining equity interest was owned by a wholly-owned
subsidiary of Environmental  Processing  Systems,  Inc.  ("EPS"),  a company not
affiliated with the Trust, which was the manager of the project.

At the same time as the Trusts  purchased  their  membership  interests,  Santee
River Rubber borrowed  $16,000,000  through tax exempt revenue bonds and another
$16,000,000  through taxable  convertible bonds. It also obtained  $4,500,000 of
subordinated financing from the general contractor of the facility.

In late May 2000,  EPS  informed  the Trust  that  Santee  River  Rubber  needed
substantial additional money to pay for its operating expenses while the repairs
were completed and during the testing. Intensive negotiations then began between
the Trust,  Trust IV, EPS, the  facility's  bondholders  and  potential  outside
funding sources.  While these negotiations  continued,  the Project informed the
Trust on July 30,  2000 that it had run out of money and would be unable to make
payroll. After further discussions, the Trust and Trust IV advanced $354,667 and
$152,333,  respectively,  for that purpose.  Negotiation continued until October
26, 2000,  when Santee River Rubber  Company  filed for Chapter 11 bankruptcy in
the U.S.  District  Court for South  Carolina.  On  November  2, 2000,  the U.S.
Bankruptcy  Court  ordered that a trustee in  bankruptcy  be appointed to manage
Santee River.  As a result,  the Trust  determined  that it would be unlikely to
recover its investment in Santee River Rubber  Company.  Accordingly,  the Trust
recorded a writedown of  $8,180,081  to reduce the  estimated  fair value of the
investment to zero.

The Trust's investment in Santee River Rubber was accounted for under the equity
method of  accounting.  The Trust's equity in the income or loss of Santee River
Rubber has been included in the financial statements since acquisition.

Summarized  financial  information for Santee River Rubber through  December 31,
1999 is as follows.  Financial information for Santee River Rubber as of and for
the year ended December 31, 2000 is not available.

         Balance Sheet Information

                           December 31, 1999
                               -----------

Current assets .............   $ 1,910,190
Construction in progress ...    32,899,358
Other non-current assets ...     4,685,995
                               -----------
Total assets ...............   $39,495,543
                               -----------

Liabilities ................   $34,576,964
Members' equity ............     4,918,579
                               -----------
Total liabilities and equity   $39,495,543
                               -----------




         Statement of Operations Information

                                    For the Period August
      For the year ended December   19, 1998 to December
                       31, 1999      31, 1998
                     -----------    -----------

Revenue ..........   $     7,975    $      --
Operating expenses     3,547,208      2,085,911
                     -----------    -----------
Net loss .........   $(3,539,233)   $(2,085,911)
                     -----------    -----------

Egypt Projects
In 1999,  the Trust and The  Ridgewood  Power  Growth Fund (the  "Growth  Fund")
jointly formed a company to develop electric power and water purification plants
for resort hotels in Egypt.  The first projects are expected to begin  operation
in the first half of 2000. The Trust and the Growth Fund own undivided interests
in the Egypt  projects in  proportion to the capital they  contributed.  Through
December 31, 2000, the Trust and the Growth Fund had contributed  $7,142,748 and
$17,576,589, respectively, to the Egypt Projects.

The Trust's  investment in the Egypt  Projects is accounted for under the equity
method of  accounting.  The Trust's equity in the loss of the Egypt Projects has
been included in the financial statements since the inception of the projects.

Summarized financial information for the Egypt Projects is as follows:

         Balance Sheet Information

                                 December 31, 2000   December 31, 1999
                                       -----------   -----------

Current assets .....................   $ 1,849,137   $   719,794
Non-current assets .................    20,408,259     9,567,984
                                       -----------   -----------
Total assets .......................   $22,257,396   $10,287,778
                                       -----------   -----------

Liabilities ........................   $    34,618   $   815,592
Shareholders' equity ...............    22,222,778     9,472,186
                                       -----------   -----------
Liabilities and shareholders' equity   $22,257,396   $10,287,778
                                       -----------   -----------

         Statement of Operations Information

                For the Year Ended       For the Year Ended
                 December 31, 2000       December 31, 1999
                        ----------       ----------
Revenue .........       $2,208,996       $    7,794
Expenses ........        1,912,063          403,312
                        ----------       ----------
Net income (loss)       $  296,933       $ (395,518)
                        ----------       ----------

GFG
In  September  1999,  the Trust and the Growth Fund made a joint  investment  of
$3,000,000 in Global Fiber Group ("GFG"), which was in the process of developing
an underwater fiber optic cable in the Western Mediterranean (the "Mediterranean
Fiber Optic Project"). The investment, which was funded equally by the Trust and
the Growth Fund,  provided for a 25% ownership  interest in GFG and the right to
invest in projects  developed by GFG. The Trust and the Growth Fund  anticipated
equally  funding an $18,000,000  joint venture  investment in the  Mediterranean
Fiber Optic Project in 2000.

In the first quarter of 2000, the Trust  determined  that GFG would probably not
be able to develop the  Mediterranean  Fiber Optic Project or any other project.
As a result,  the Fund  determined  that it would be  unlikely  to  recover  its
investment in GFG. Accordingly,  the Trust recorded a writedown of $1,440,291 in
the first quarter of 2000 to reduce the estimated  fair value of the  investment
to zero. GFG subsequently ceased operations.

The Trust's  investment  in the GFG is accounted  for under the equity method of
accounting.  The Trust's  equity in the loss of the GFG has been included in the
financial statements since the inception of the projects.

Summarized financial information for GFG for the year ended December 31, 1999 is
as follows.  Financial  information  for the year ended December 31, 2000 is not
available.

Balance Sheet Information

                   December 31, 1999
                       ----------

Current assets .....   $   90,030
Non-current assets .    2,826,128
                       ----------
Total assets .......   $2,916,158
                       ----------

Shareholders' equity   $2,916,158
                       ----------

Statement of Operations Information

        For the Three Months Ended
           December 31, 1999
                ---------

Revenues        $ 346,059
Expenses          430,001
                ---------
Net loss        $ (83,942)
                ---------

United Kingdom Landfill Projects
On June 30, 1999, a newly-created  subsidiary of the Trust purchased 100% of the
equity in six  landfill  gas power plants  located in Great  Britain.  The total
purchase price was  $16,667,567,  including  $617,567 of acquisition  costs. The
Trust has the right to develop and construct  other landfill gas plants in Great
Britain.  The Trust supplied the first $16,050,000 of development equity and the
Growth Fund will supply the remainder of the development  equity.  To the extent
that the Growth Fund supplies capital,  it will receive an undivided interest in
the entire package of operating and developmental  projects. The Trust accounted
for these  projects  using the equity  method  because  its  ability to exercise
control over the projects  was expected to be temporary  due to the  anticipated
investment of the Growth Fund. Due to delays in  construction  of the additional
landfill  gas  plants,  the Growth  Fund  elected to invest some of its funds in
unrelated projects.  As a result, the Trust expects to maintain control over the
projects.  As a result,  effective  on  December  31,  2000,  the Trust began to
account for these projects using the consolidation method of accounting.

The plants have an installed capacity of 14.5 megawatts and sell the electricity
under a 15 year  contract to a  quasi-autonomous  non-governmental  organization
that  purchases  electricity  generated  by  renewable  sources on behalf of all
English  utilities.  The first six projects  have been  financed with a total of
$16.6  million  of  long-term  bank debt,  in  addition  to the equity  interest
purchased by the Trust.

In the first quarter of 2001, the Growth Fund supplied approximately  $3,100,000
of capital for four new  projects.  The Growth Fund expects to supply the equity
for the purchase of any additional plants.

Summarized  financial  information  for  United  Kingdom  Landfill  Plants is as
follows:

        Balance Sheet Information

                                    December 31, 1999
                                       -----------

Current assets .....................   $ 6,089,003
Non-current assets .................    24,594,379
                                       -----------
Total assets .......................   $30,683,382
                                       -----------

Liabilities ........................   $13,767,073
Shareholders' equity ...............    16,916,309
                                       -----------
Liabilities and shareholders' equity   $30,683,382
                                       -----------

        Statement of Operations Information

     Year Ended December 31,   Six Months Ended December
                   2000          31, 1999
                ----------      ----------
Revenue ..      $5,559,304      $2,862,290
Expenses .       5,007,784       2,681,969
                ----------      ----------
Net income         551,520      $  180,321
                ----------      ----------

WaterPure Corporation
In  August  1998,  the  Trust  and  two  unrelated   entities  filed  a  revised
reorganization plan for Superstill Technology, Inc ("Superstill"). Superstill, a
California company,  has been a debtor in Chapter 11 bankruptcy since July 1997.
The  reorganization  plan was approved by the bankruptcy  court and Superstill's
creditors  in  December  1998.  In  accordance  with  the  reorganization  plan,
Ridgewood WaterPure Corporation ("WaterPure Corporation") acquired substantially
all the assets of  Superstill  and made  certain  payments to satisfy the claims
against  Superstill.  The  purchase  price  was  allocated  to  the  assets  and
liabilities  acquired based upon their respective fair values.  Of these assets,
$1,969,951 consisted of in-process research and development which was charged to
the  statement of  operations  in 1998 in  accordance  with  generally  accepted
accounting principles.

Superstill holds various patents and  intellectual  property rights to an energy
efficient water  purification  technology that it has developed.  Superstill has
also designed and licensed distillation and desalinization  equipment of various
sizes and capacities.

The Trust made an investment of $3,500,000 in WaterPure  Corporation in exchange
for  5,400,000  shares of common  stock  representing  a 54% equity  interest in
WaterPure  Corporation.  The remaining equity interest in WaterPure  Corporation
was issued to other  creditors and license holders of Superstill in satisfaction
of their claims and to acquire certain licensing rights.  WaterPure  Corporation
will design,  develop and commercialize water purification systems incorporating
the technology acquired from Superstill.

Synergics Projects
Beginning in late 1999,  Ridgewood  Power LLC, the Managing  Shareholder  of the
Trust,  began  negotiations  with  Synergics,  Inc.  ("Synergics")  to buy  nine
existing  hydroelectric  generating  plants (the "Synergics  Projects").  In the
course of  negotiations  and due diligence,  Ridgewood Power learned that one of
Synergics' lenders had declared a payment default against Synergics and that the
lender had agreed to discharge the debt at a substantial  discount from the face
amount if payment  were made by the end of April 2000.  In order to preserve the
benefit of the lender's  offer and to allow  completion  of the  acquisition  on
favorable  terms,  the  Trust and the  Growth  Fund,  through  a joint  venture,
acquired the debt from the lender on April 28, 2000 for a payment of $17 million
to the  lender.  The debt  remains  in  default,  but the joint  venture  is not
exercising its remedies against Synergics or the Synergics  subsidiaries pending
the proposed acquisition described below.

The joint  venture  intends to acquire the  Synergics  hydroelectric  generation
business  by  forgiving  the $17  million  of  outstanding  debt and  paying  an
additional  $1  million to the  shareholders  of  Synergics  and paying up to an
additional $1.7 million of Synergics' tax liabilities  that might be incurred as
a result  of the  sale of its  assets.  In  addition,  if a  project  lease  for
Synergics' Box Canyon,  California  hydroelectric  plant is extended  beyond the
year 2010, the joint venture will pay the Synergics  shareholders  the lesser of
$500,000  or  one-half  of the  agreed  present  value  derived  from the  lease
extension.  The  structuring  and closing of the acquisition is to be determined
after a review of certain  financial,  contractual  and tax  considerations  and
termination of the Hart-Scott-Rodino Act antitrust waiting period.

Until the acquisition closes, Synergics has agreed to retain all working capital
for the account of the joint  venture and to allow the joint  venture to approve
all operational  decisions and  expenditures.  Synergics is cooperating  closely
with the joint venture in making operational  decisions.  However,  although the
joint  venture  currently   intends  to  acquire  the  Synergics   hydroelectric
generation  business as promptly as possible,  neither the joint venture nor the
Trust V or the Fund are  obligated  to acquire  Synergics  or any of its assets.
Wayne L.  Rogers,  the  president  of  Synergics,  agreed  to vote the  stock of
Synergics,  Inc.  beneficially  owned by him  (approximately  69% of the  voting
stock) in favor of a merger or other  corporate  reorganization  as specified by
the Trust and the  Growth  Fund that  materially  complies  with the  provisions
outlined above.

Although the joint venture now owns $17 million of the debt of Synergics,  there
is  approximately  $11.725  million of debt owed to Fleet Bank, N.A. The Trust V
and the Growth Fund are in discussions  concerning the assumption or refinancing
of the Fleet debt in connection with the acquisition.

The Trust  supplied  $5  million  of the  capital  used by the joint  venture to
acquire the debt and the Growth Fund  supplied the  remaining  $12 million.  Any
additional  capital  needed for the  acquisition  will be  supplied to the joint
venture by the  Growth  Fund.  The Trust and the Growth  Fund will own the joint
venture in  proportion  to the  capital  each  supplies  and  neither  will have
preferred rights over the other.

The debt accrues  interest at 11% per annum. For the eight months ended December
31,  2000,  the  Trust  recorded  $364,289  of  income  related  to the  debt of
Synergics.

3.       Long-Term Debt

Following is a summary of United Kingdom Landfill Gas Projects long-term debt at
December 31, 2000:

Bank loan payable                               $9,838,164
Less - Current maturity                           (622,386)
                                      ----------------------
Total long-term debt                           $ 9,215,778
                                      ----------------------

The bank loan is  repayable  in semi  annual  installments  each  March 31st and
September 30th through September 30, 2010. The loan bears interest at LIBOR plus
2.25% (8.82% at December 31, 2000). The notes are secured by  substantially  all
of the assets of the United Kingdom Landfill Gas Projects.

Scheduled principal  repayments of long-term debt for the next five years are as
follows:

                                       Year Ended
                                      December 31,              Payment

                                      2001                      622,386
                                      2002                      688,166
                                      2003                      760,637
                                      2004                      842,026
                                      2005                      931,106

During the fourth  quarter of 1997,  the Trust and its principal bank executed a
revolving line of credit  agreement,  whereby the bank will provide a three-year
committed  line of credit  facility of  $750,000  for  borrowings  or letters of
credit.  In December 2000, the credit facility was extended until March 5, 2001.
Outstanding borrowings bear interest at the bank's prime rate or, at the Trust's
choice, at LIBOR plus 2.5%. The credit agreement  requires the Trust to maintain
a ratio of total debt to tangible net worth of no more than 1 to 1 and a minimum
debt  service  coverage  ratio  of 2 to 1.  The  Maine  Hydro  projects  have an
outstanding  standby letter of credit  totaling  $99,250 which is covered by the
line of credit facility. At December 31, 2000 and 1999, there were no borrowings
outstanding under the facility.

4.       Fair Value of Financial Instruments

At December 31, 2000 and 1999, the carrying values of the Trust's cash, accounts
receivable and accounts payable approximate their fair values. The fair value of
the  long-term  debt,  calculated  using  current  rates for loans with  similar
maturities, also approximates its carrying value.

5.       Electric Power Sales Contract

The United  Kingdom  Landfill  Gas  Projects  are  committed  to sell all of the
electricity it produces to two quasi-autonomous  non-governmental  organizations
that purchase  electricity  generated by renewable sources (such as landfill gas
power  plants)  on  behalf of all  British  utilities  in order to meet  British
environmental  protection  goals.  The  electricity  prices  will  be  increased
annually by a factor  equal to the  percentage  increase  in the United  Kingdom
Retail Price Index.

6.       Transactions with Affiliates

CLP Services Limited ("CLPS"), a new company organized by the previous owners of
United Kingdom Landfill Gas Projects, provides day-to-day services to the United
Kingdom  Landfill Gas  Projects.  CLPS is paid a flat fee of  approximately  1.2
cents per kilowatt-hour for those services (adjusted for increases in the Retail
Price Index) and is eligible  for bonus  payments if a project's  actual  annual
electricity output exceeds 90% of its capacity.  CLPS is also paid approximately
$88,000 per year (also  adjusted  for  increases  in the Retail Price Index) for
management services for the various companies owning the five existing projects.
The gas  extraction  and cleaning  systems for the landfills will be operated by
CLPS for no  additional  cost.  The United  Kingdom  Landfill  Gas  Projects may
terminate  the contract  with CLPS if at the end of any year the projects in the
aggregate have not produced at least 90% of their capacity (adjusted for loss of
time  for  scheduled  downtime,  catastrophic  failures  not  caused  by CLPS or
failures to receive  landfill gas not caused by CLPS),  or at any time if it can
be shown that it is physically  impossible for the plants as a whole to meet the
90% standard for the current year.

7.       Transactions with Managing Shareholder and Affiliates

The Trust pays to the managing shareholder a distribution and offering fee up to
6% of each capital contribution made to the Trust. This fee is intended to cover
legal,  accounting,  consulting,  filing,  printing,  distribution,  selling and
closing costs for the offering of the Trust.  For the periods ended December 31,
1999  and  1998,  the  Trust  paid  fees  for  these  services  to the  managing
shareholder of $2,100 and $1,020,474, respectively. These fees are recorded as a
reduction in the shareholders' capital contribution.

The Trust also pays to the managing  shareholder  an investment  fee up to 2% of
each capital  contribution made to the Trust. The fee is payable to the managing
shareholder  for  its  services  in  investigating  and  evaluating   investment
opportunities and effecting transactions for investing the capital of the Trust.
For the period ended  December 31, 1998, the Trust paid  investment  fees to the
managing shareholder of $337,158.

The Trust  entered into a  management  agreement  with the managing  shareholder
under which the managing shareholder renders certain management,  administrative
and  advisory  services and provides  office space and other  facilities  to the
Trust. As compensation to the managing shareholder for such services,  the Trust
pays the  managing  shareholder  an annual  management  fee equal to 2.5% of the
total capital contributions to the Trust payable monthly upon the closing of the
Trust which occurred in April 1998.  For the year ended December 31, 2000,  1999
and  1998,  the  Trust  paid  management  fees  of  $2,257,357,  $2,377,941  and
$1,606,269, respectively. In addition, the managing shareholder provides certain
project management  services to the Trust. The managing  shareholder charges the
Trust at its cost for the  services  and for the  allocable  amount  of  certain
overhead items.  For the year ended December 31, 1998, the managing  shareholder
charged $793,654 to the Trust.

The Trust  reimburses the managing  shareholder  and affiliates for expenses and
fees of  unaffiliated  persons  engaged  by the  managing  shareholder  for fund
business. The managing shareholder or affiliates originally paid all project due
diligence  costs,  accounting  and legal  fees and other  expenses  shown in the
statement of operation and were reimbursed by the Trust.

Under the Declaration of Trust, the managing  shareholder is entitled to receive
each year 1% of all  distributions  made by the Trust (other than those  derived
from the  disposition  of Trust  property)  until  the  shareholders  have  been
distributed  each  year an  amount  equal to 14% of their  equity  contribution.
Thereafter,  the  managing  shareholder  is  entitled  to  receive  20%  of  the
distributions  for the  remainder  of the  year.  The  managing  shareholder  is
entitled to receive 1% of the proceeds  from  dispositions  of Trust  properties
until the shareholders  have received  cumulative  distributions  equal to their
original  investment  ("Payout").  After  Payout,  the managing  shareholder  is
entitled to receive 20% of all remaining distributions of the Trust.

Income  is  allocated  to the  managing  shareholder  until  the  profits  equal
distributions  to the  managing  shareholder.  Then,  income is allocated to the
investors,  first among  holders of  Preferred  Participation  Rights until such
allocations equal distributions from those Preferred  Participation  Rights, and
then among Investors in proportion to their ownership of investor shares. If the
Trust has net losses for a fiscal  period,  the losses are  allocated 99% to the
Investors and 1% to the managing shareholder.

Where permitted,  in the event the managing shareholder or an affiliate performs
brokering  services  in  respect of an  investment  acquisition  or  disposition
opportunity for the Trust, the managing shareholder or such affiliate may charge
the Trust a brokerage  fee. Such fee may not exceed 2% of the gross  proceeds of
any such  acquisition  or  disposition.  No such fees  have  been  paid  through
December 31, 2000.

The corporate  trustee of the Trust,  Ridgewood Energy Holding  Corporation,  an
affiliate of the managing  shareholder  through  common  ownership,  received no
compensation from the Fund.

Amounts  due to and from  affiliates  are  non-interest  bearing and are usually
settled  within  thirty  days.  Such amounts  arise from the delay  between when
expenses are paid by the Trust or affiliates and when reimbursement occurs.

The managing  shareholder  purchased one investor share of the Trust for $83,000
in 1996.  Through  December  31,  2000,  Ridgewood  Securities  Corporation,  an
affiliate of the managing shareholder,  earned commissions and placement fees of
$1,016,287.

8.       Management Share

The  Trust  granted  the  managing   shareholder  a  single   Management   Share
representing  the  managing  shareholder's   management  rights  and  rights  to
distributions of cash flow.

<PAGE>
                      Ridgewood Maine Hydro Partners, L.P.

                              Financial Statements

                        December 31, 2000, 1999 and 1998


<PAGE>


                        Report of Independent Accountants


To the Partners of
Ridgewood Maine Hydro Partners, L.P.:

In our opinion,  the accompanying  balance sheets and the related  statements of
operations, changes in partners' equity and of cash flows present fairly, in all
material  respects,  the financial  position of Ridgewood  Maine Hydro Partners,
L.P. (the  "Partnership")  at December 31, 2000 and 1999, and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2000, in conformity with accounting  principles  generally accepted
in  the  United  States  of  America.   These   financial   statements  are  the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial  statements based on our audits.  We conducted our
audits of these  statements in  accordance  with  auditing  standards  generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe that our audits provide a reasonable basis for our opinion.



PricewaterhouseCoopers LLP
New York, NY
March 23, 2001


<PAGE>
Ridgewood Maine Hydro Partners, L.P.
Balance Sheet
--------------------------------------------------------------------------------

                                                         December 31,
                                                 ----------------------------
                                                    2000            1999
                                                 ------------    ------------
Assets:
Cash and cash equivalents ....................   $    135,441    $    408,835
Accounts receivable, trade ...................        602,342       1,021,480
Prepaid and other current assets .............         22,527         142,862
                                                 ------------    ------------
     Total current assets ....................        760,310       1,573,177

Property, plant and equipment ................      1,838,408       1,349,024
Accumulated depreciation .....................       (140,422)        (78,628)
                                                 ------------    ------------
     Property, plant and equipment, net ......      1,697,986       1,270,396
                                                 ------------    ------------

Electric power sales contracts ...............     13,311,374      13,311,374
Accumulated amortization .....................     (4,266,497)     (3,206,201)
                                                 ------------    ------------
     Electric power sales contracts, net .....      9,044,877      10,105,173
                                                 ------------    ------------
     Total assets ............................   $ 11,503,173    $ 12,948,746
                                                 ------------    ------------

Liabilities and Partners' Equity:
Liabilities:
Accounts payable and accrued expenses ........   $    126,954    $     38,285
Due to affiliates ............................        225,404         799,905
Deferred gain on termination of lease ........        456,920            --
Current portion of long-term lease obligations           --           783,547
                                                 ------------    ------------
     Total current liabilities ...............        809,278       1,621,737

Commitments and contingencies

Partners' equity:
General partner ..............................         97,217         103,548
Limited partners .............................     10,596,678      11,223,461
                                                 ------------    ------------

     Total partners' equity ..................     10,693,895      11,327,009
                                                 ------------    ------------

     Total liabilities and partners' equity ..   $ 11,503,173    $ 12,948,746
                                                 ------------    ------------






               See accompanying notes to the financial statements.
<PAGE>
Ridgewood Maine Hydro Partners, L.P.
Statement of Operations
--------------------------------------------------------------------------------

                                         Year Ended December 31,
                                 -----------------------------------------
                                     2000          1999           1998
                                 -----------    -----------    -----------

Sales ........................   $ 3,750,095    $ 4,756,189    $ 4,511,361
                                 -----------    -----------    -----------
Operating expenses:
 Depreciation and amortization     1,122,090      1,107,568      1,089,969
 Labor .......................       653,306        565,015        592,812
 Insurance ...................       176,117        177,333        194,458
 Property taxes ..............       255,274        252,611        267,046
 Contract management .........       414,089        323,003        429,714
 Other expenses ..............       689,970        576,715        643,847
                                 -----------    -----------    -----------
                                   3,310,846      3,002,245      3,217,846
                                 -----------    -----------    -----------

Income from operations .......       439,249      1,753,944      1,293,515
                                 -----------    -----------    -----------

Other income (expense):
Interest income ..............        59,360         42,852        153,983
Interest expense .............       (33,053)      (112,885)      (131,519)
Other income .................        38,944         15,000           --
                                 -----------    -----------    -----------
Other income (expense), net ..        65,251        (55,033)        22,464
                                 -----------    -----------    -----------

Net income ...................   $   504,500    $ 1,698,911    $ 1,315,979
                                 -----------    -----------    -----------







               See accompanying notes to the financial statements.


<PAGE>



Ridgewood Maine Hydro Partners, L.P.
Statement of Changes in Partners' Equity
For the Years Ended December 31, 2000, 1999 and 1998
--------------------------------------------------------------------------------

                            Limited         General
                            Partners        Partner          Total
                          ------------    ------------    ------------
Partners' equity,
 January 1, 1998 ......   $ 13,265,477    $    124,175    $ 13,389,652

Cash distributions ....     (2,248,343)        (22,711)     (2,271,054)

Net income for the year      1,302,819          13,160       1,315,979
                          ------------    ------------    ------------
Partners' equity,
 December 31, 1998 ....     12,319,953         114,624      12,434,577

Cash distributions ....     (2,778,414)        (28,065)     (2,806,479)

Net income for the year      1,681,922          16,989       1,698,911
                          ------------    ------------    ------------
Partners' equity,
 December 31, 1999 ....     11,223,461         103,548      11,327,009

Cash distributions ....     (1,126,238)        (11,376)     (1,137,614)

Net income for the year        499,455           5,045         504,500
                          ------------    ------------    ------------
Partners' equity,
 December 31, 2000 ....   $ 10,596,678    $     97,217    $ 10,693,895
                          ------------    ------------    ------------









               See accompanying notes to the financial statements.

<PAGE>
Ridgewood Maine Hydro Partners, L.P.
Statement of Cash Flows
--------------------------------------------------------------------------------

                                            Year Ended December 31,
                                     -----------------------------------------
                                        2000           1999           1998
                                     -----------    -----------    -----------
Cash flows from operating
 activities:
Net income .......................   $   504,500    $ 1,698,911    $ 1,315,979
                                     -----------    -----------    -----------
Adjustments to reconcile net
 income to net cash flows from
 operating activities:
Depreciation and amortization ....     1,122,090      1,107,568      1,089,969
Changes in assets and liabilities:
Decrease (increase) in accounts
 receivable ......................       419,138       (447,458)      (105,371)
Decrease (increase) in prepaid
 and other current assets ........       120,335        (65,295)        11,832
(Increase) decrease in due
 to/from affiliates, net .........      (574,501)       887,274         16,281
Increase (decrease) in accounts
 payable and accrued expenses ....        88,669       (159,514)        40,782
Decrease in deferred gain
 on lease termination ............       (38,944)
                                     -----------    -----------    -----------
 Total adjustments ...............     1,136,787      1,322,575      1,053,493
                                     -----------    -----------    -----------
 Net cash provided by
  operating activities ...........     1,641,287      3,021,486      2,369,472
                                     -----------    -----------    -----------
Cash flows from investing
 activities:
Capital expenditures .............      (489,384)      (259,776)      (752,613)
                                     -----------    -----------    -----------
Net cash used in investing
 activities ......................      (489,384)      (259,776)      (752,613)
                                     -----------    -----------    -----------
Cash flows from financing
 activities:
Cash distributions to partners ...    (1,137,614)    (2,806,479)    (2,271,054)
Return of deposits ...............          --             --          800,000
Payments to reduce long-term
 lease obligations ...............      (287,683)      (153,515)      (134,894)
                                     -----------    -----------    -----------
Net cash used in financing
 activities ......................    (1,425,297)    (2,959,994)    (1,605,948)
                                     -----------    -----------    -----------
Net (decrease) increase
 in cash and cash equivalents ....      (273,394)      (198,284)        10,911

Cash and cash equivalents,
 beginning of year ...............       408,835        607,119        596,208
                                     -----------    -----------    -----------
Cash and cash equivalents,
 end of year .....................   $   135,441    $   408,835    $   607,119
                                     -----------    -----------    -----------






               See accompanying notes to the financial statements.
<PAGE>
Ridgewood Maine Hydro Partners, L.P.
Notes to Financial Statements
--------------------------------------------------------------------------------

1.       Organization and Business Activity

On  September  5, 1996,  Ridgewood  Maine Hydro  Partners,  L.P. was formed as a
Delaware  limited  partnership  (the   "Partnership").   Ridgewood  Maine  Hydro
Corporation, a Delaware Corporation ("RMHCorp"),  is the sole general partner of
the  Partnership  and is owned  equally by  Ridgewood  Electric  Power  Trust IV
("Trust IV") and  Ridgewood  Electric  Power Trust V ("Trust V"),  both Delaware
business  trusts  (collectively,  the  "Trusts").  The Trusts are equal  limited
partners in the Partnership.

On December 23,  1996,  in a merger  transaction,  the  Partnership  acquired 14
hydroelectric  projects  located in Maine (the "Maine  Hydro  Projects")  from a
subsidiary of CHI Energy,  Inc. (formerly  Consolidated Hydro, Inc.). The assets
acquired  include a total of 11.3 megawatts of electrical  generating  capacity.
The  electricity  generated  is sold to Central  Maine Power  Company and Bangor
Hydro Company under long-term contracts.

2.       Summary of Significant Accounting Policies

Use of estimates
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities,  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from the estimates.

Cash and cash equivalents
The  Partnership  considers all highly liquid  investments  with maturities when
purchased of three months or less as cash and cash equivalents.

Revenue recognition
Power  generation  revenue  is  recognized  based  on power  delivered  at rates
stipulated  in the power  sales  contracts.  Interest  income is  recorded  when
earned.

Plant and equipment
Machinery  and  equipment,   consisting  principally  of  electrical  generating
equipment,  is stated at cost. Renewals and betterments that increase the useful
lives of the assets are capitalized.  Repair and maintenance  expenditures  that
increase the efficiency of the assets are expensed as incurred.  At December 31,
2000 and 1999,  the  Partnership  had  construction  in progress of $482,436 and
$113,419, respectively.

Depreciation is recorded using the straight-line method over the useful lives of
the assets,  which vary from 3 to 50 years.  During the years ended December 31,
2000, 1999 and 1998, the Partnership  recorded  depreciation expense of $61,794,
$47,272 and $29,673, respectively.

Intangible asset
A portion of the purchase  price of the Maine Hydro Projects was assigned to the
Electric Power Sales  Contracts and is being  amortized over the duration of the
contract  (11 to 21 years) on a  straight-line  basis.  Management  periodically
reviews  intangibles  for potential  impairment.  During each of the years ended
December 31, 2000, 1999 and 1998, the Partnership recorded  amortization expense
of $1,060,296.

Income taxes
No provision is made for income taxes in the accompanying  financial  statements
as the income or loss of the  Partnership  is passed through and included in the
tax returns of the individual partners.

3.       Obligation Under Capital Lease

The Partnership assumed a hydroelectric  facility leased pursuant to a long-term
lease  agreement  dated July 16, 1979,  and as amended (the  "Agreement").  Upon
proper  notice,  the  Partnership  had the right to purchase  all the  equipment
covered in the  Agreement  at Fair Market  Value (as defined) or elect to extend
the terms of the Agreement for up to three  five-year  periods at a rental equal
to Fair Rental Value (as defined).  In addition,  the  Partnership  also had the
right to terminate the Agreement  and purchase the  hydroelectric  facility upon
proper notice and payment of a scheduled close-out amount, which was $750,000 at
April  30,  2000.  This  lease  was  accounted  for as a  capital  lease and the
scheduled  close-out amount of $750,000 had been recorded as a lease obligation.
On April 30, 2000,  the  Partnership  purchased the equipment at its Fair Market
Value, which was $254,136.  The difference between the recorded lease obligation
of $750,000 and the purchase price of $254,136 is recorded as a deferred gain in
the accompanying  balance sheet. This amount is being amortized over the asset's
useful life of 10 years  resulting  in other  income of $38,944  during the year
ended December 31, 2000.

4.       Lease Commitments

The  Partnership  leases the sites of two of its  hydroelectric  projects  under
non-cancelable operating leases expiring in June 2078. Total monthly payments in
2000  were the  greater  of  $1,273  or a  percentage  of the  revenue  from the
hydroelectric  project. At December 31, 2000, the future minimum rental payments
required under these leases was as follows:

                                    2001                    $  15,276
                                    2002                       15,276
                                    2003                       15,276
                                    2004                       15,276
                                    2005                       15,276
                                    Thereafter              1,107,510
                                                    ------------------
                                                          $ 1,183,890
                                                    ------------------

5.       Power Generation Contracts

The  Partnership  operates  facilities  which qualify as small power  production
facilities  under the Public Utility  Regulatory  Policies Act ("PURPA").  PURPA
requires  that each  electric  utility  company,  operating at the location of a
small power production facility, as defined,  purchase the electricity generated
by such  facility at a specified or  negotiated  price.  The  Partnership  sells
substantially  all of its  electrical  output to two public  utility  companies,
Central Maine Power Company ("CMP") and Bangor  Hydro-Electric  Company ("BHC"),
pursuant to  long-term  power  purchase  agreements.  Eleven of the twelve power
purchase  agreements  with CMP expire in December  2008 and are renewable for an
additional  five year period.  The twelfth  power  purchase  agreement  with CMP
expires in December 2007 with CMP having the option to extend the contract three
more  five-year  periods.  The two power  purchase  agreements  with BHC  expire
December  2014 and  February  2017.  The  Partnership  is required to maintain a
standby  letter of credit  totaling  $99,250 under the long-term  power purchase
agreement.

6.       Fair Value of Financial Instruments

At December 31, 2000 and 1999,  the carrying  value of the  Partnership's  cash,
accounts receivable and accounts payable approximates their fair value. The fair
value of the long-term capital lease obligations, calculated using current rates
for loans with similar maturities, also approximates its carrying value.

7.       Management Agreement

The Maine Hydro Projects are operated by a subsidiary of CHI Energy,  Inc. under
an Operation,  Maintenance and Administrative  Agreement.  The annual operator's
fee is $326,142  adjusted for inflation,  plus an annual  incentive fee equal to
50% of the net cash flow in excess of a target amount. The maximum incentive fee
payable in a year is $112,500.  The Partnership recorded $414,089,  $323,003 and
429,714 of expense under this arrangement  during the periods ended December 31,
2000, 1999 and 1998,  respectively.  The agreement has a five-year term expiring
on June 30, 2001 and can be renewed for two additional five-year terms by mutual
consent.
<PAGE>







                           Indeck Maine Energy, L.L.C.

                              Financial Statements

                        December 31, 2000, 1999 and 1998


<PAGE>






                        Report of Independent Accountants


To the Members of
Indeck Maine Energy, L.C.C.:

In our opinion,  the accompanying  balance sheets and the related  statements of
operations, changes in members' deficit and of cash flows present fairly, in all
material respects,  the financial  position of Indeck Maine Energy,  L.L.C. (the
"Company") at December 31, 2000 and 1999,  and the results of its operations and
its cash flows for each of the three  years in the  period  ended  December  31,
2000, in conformity with accounting  principles generally accepted in the United
States of America.  These  financial  statements are the  responsibility  of the
Company's  management;  our  responsibility  is to  express  an opinion on these
financial  statements  based on our  audits.  We  conducted  our audits of these
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States of America,  which  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

As discussed in Note 4 to the financial statements,  the Company has temporarily
suspended operations and is dependent on the continuing financial support of the
Members.



PricewaterhouseCoopers LLP
New York, NY
March 23, 2001
<PAGE>
Indeck Maine Energy, L.L.C.
Balance Sheet
--------------------------------------------------------------------------------

                                                     December 31,
                                              --------------------------
                                                 2000           1999
                                              -----------    -----------
Assets:
Cash and cash equivalents .................   $   689,533    $   656,442
Accounts receivable .......................       147,912        274,362
Inventories ...............................       144,295        145,198
Prepaid expenses ..........................       135,617         27,264
                                              -----------    -----------
   Total current assets ...................     1,117,357      1,103,266
                                              -----------    -----------
Plant and equipment:
   Land ...................................       158,000        158,000
   Power generation facilities ............     3,203,217      3,203,217
   Equipment and other ....................        56,646         56,646
                                              -----------    -----------
                                                3,417,863      3,417,863
   Accumulated depreciation ...............      (607,358)      (435,869)
                                              -----------    -----------
                                                2,810,505      2,981,994
                                              -----------    -----------

Intangible assets .........................       206,577        206,577
Accumulated amortization ..................       (47,040)       (33,758)
                                              -----------    -----------
                                                  159,537        172,819
                                              -----------    -----------
     Total assets .........................   $ 4,087,399    $ 4,258,079
                                              -----------    -----------
Liabilities and Members' Deficit:
Liabilities:
Accounts payable and accrued expenses .....   $    86,858    $   269,384
Due to affiliates .........................       416,421        424,606
Management fee payable ....................       200,000        100,000
Notes payable to Members ..................     4,801,000      3,601,000
                                              -----------    -----------
     Total current liabilities ............     5,504,279      4,394,990

Commitments and contingencies

Total Members' deficit ....................    (1,416,880)      (136,911)
                                              -----------    -----------
     Total liabilities and members' deficit   $ 4,087,399    $ 4,258,079
                                              -----------    -----------





                See accompanying notes to the financial statement


<PAGE>
Indeck Maine Energy, L.L.C.
Statement of Operations
--------------------------------------------------------------------------------

                             For the year ended December 31,
                          -----------------------------------------
                             2000           1999            1998
                          -----------    -----------    -----------

Revenues ..............   $ 2,017,481    $ 1,391,039    $ 1,430,296

Operating expenses ....     3,125,466      3,478,842      2,800,185
                          -----------    -----------    -----------
   Loss from operations    (1,107,985)    (2,087,803)    (1,369,889)

Interest income .......        11,857          4,098           --

Interest expense ......      (183,841)      (108,956)       (47,711)
                          -----------    -----------    -----------
   Net loss ...........   $(1,279,969)   $(2,192,661)   $(1,417,600)
                          -----------    -----------    -----------












               See accompanying notes to the financial statements.
<PAGE>
Indeck Maine Energy, L.L.C.
Statement of Changes in Members' (Deficit) Equity
For the Years Ended December 31, 2000, 1999 and 1998
--------------------------------------------------------------------------------

                                    Indeck Energy    Ridgewood
                                    Services, Inc.   Maine, LLC       Total
                                      -----------    -----------    -----------

Members' equity, January 1, 1998 ..   $     1,000    $ 3,472,350    $ 3,473,350

Net loss ..........................          --       (1,417,600)    (1,417,600)
                                      -----------    -----------    -----------
Members' equity, December 31, 1998          1,000      2,054,750      2,055,750

Net loss ..........................        (1,000)    (2,191,661)    (2,192,661)
                                      -----------    -----------    -----------
Members' deficit, December 31, 1999          --         (136,911)      (136,911)

Net loss ..........................          --       (1,279,969)    (1,279,969)
                                      -----------    -----------    -----------
Members' deficit, December 31, 2000   $      --      $(1,416,880)   $(1,416,880)
                                      -----------    -----------    -----------





               See accompanying notes to the financial statements.
<PAGE>
Indeck Maine Energy, L.L.C.
Statement of Cash Flows
--------------------------------------------------------------------------------

                                           For the year ended December 31,
                                     -----------------------------------------
                                       2000           1999           1998
                                     -----------    -----------    -----------

Cash flows from operating
 activities
Net loss .........................   $(1,279,969)   $(2,192,661)   $(1,417,600)
                                     -----------    -----------    -----------
Adjustments to reconcile net
 loss to net cash flows used in
 operating activities
Depreciation and amortization ....       184,771        184,771        184,771
Changes in assets and liabilities:
 Decrease (increase) in
  accounts receivable ............       126,450        (88,554)       205,704
 Decrease in inventories .........           903        133,506         71,955
 (Increase) decrease in
  prepaid expenses ...............      (108,353)        82,704        (91,424)
 Decrease in accounts payable
  and accrued expenses ...........      (182,526)       (57,678)      (560,621)
 (Decrease) increase in due to
  affiliates .....................        (8,185)       424,606           --
 Increase (decrease) in management
 fee payable .....................       100,000        (25,000)       100,000
                                     -----------    -----------    -----------
Total adjustments ................       113,060        654,355        (89,615)
                                     -----------    -----------    -----------
Net cash used in operating
 activities ......................    (1,166,909)    (1,538,306)    (1,507,215)
                                     -----------    -----------    -----------
Cash flows from financing
 activities
Issuance of notes payable ........     1,200,000      2,101,000      1,500,000
                                     -----------    -----------    -----------
Net cash provided by
 financing activities ............     1,200,000      2,101,000      1,500,000
                                     -----------    -----------    -----------
Net increase (decrease) in cash
 and cash equivalents ............        33,091        562,694         (7,215)

Cash and cash equivalents,
 beginning of period .............       656,442         93,748        100,963
                                     -----------    -----------    -----------
Cash and cash equivalents,
 end of period ...................   $   689,533    $   656,442    $    93,748
                                     -----------    -----------    -----------


               See accompanying notes to the financial statements.
<PAGE>
Indeck Maine Energy, L.L.C.
Notes to Financial Statements
--------------------------------------------------------------------------------

1.       Description of Business

Indeck Maine  Energy,  L.L.C.  (the  "Company") is a limited  liability  company
formed on April 1, 1997 for the purpose of acquiring, operating and managing two
wood-fired  electric generation  facilities (the  "Facilities").  The Facilities
commenced  operations on June 10, 1997. On June 11, 1997,  Ridgewood  Maine, LLC
("Ridgewood") contributed $4,857,015 for a membership interest.

a.   Ridgewood's  Priority Return from Operations:  Ridgewood's  Priority Return
     From  Operations  is an  amount  equal  to 18% per  annum  of $14  million,
     increased by the amount of any  additional  contribution  made by Ridgewood
     and reduced by the amount of  distributions  to  Ridgewood of Net Cash Flow
     From Capital Events, as defined.

b.   Allocation  of Profits and Losses:  In  accordance  with the  Operating
     Agreement,  profits and losses,  as defined, are allocated as follows:

First,  profits shall be allocated to each Member,  other than Ridgewood,  until
the  cumulative   amount  of  profits  allocated  is  equal  to  the  amount  of
distributions  made or to be made to each Member  pursuant to the  distributions
provisions of the Operating Agreement.

Second, all remaining profits and losses shall be allocated to Ridgewood.  Also,
all depreciation shall be allocated to Ridgewood.

Losses and  depreciation  allocated to Members in accordance  with the Operating
Agreement  may not exceed the amount  that would  cause such  members to have an
Adjusted  Capital  account  Deficit,  as defined,  at the end of such year.  All
losses and  depreciation in excess of this limitation  shall be allocated to the
remaining  Members who will not be subject to this limitation,  in proportion to
and to the extent of their positive Capital Account Balances, as defined.

Also,  if in any  fiscal  year a Member  unexpectedly  receives  an  adjustment,
allocation or  distribution  as described in the Operating  Agreement,  and such
allocation  or  distribution  causes or  increases an Adjusted  Capital  Account
Deficit for such fiscal year, such Member shall be allocated items of income and
gain in an amount and manner  sufficient  to  eliminate  such  Adjusted  Capital
Account Deficit as quickly as possible.

c.       Distributions  of Net Cash Flows From  Operations:  For each Fiscal
  year,  the Company shall  distribute Net Cash Flow From Operations, as
 defined, to the Members as follows:

First,  the Company  shall  distribute  to Ridgewood  100% of Net Cash Flow From
Operations until Ridgewood has received the full amount of any unpaid portion of
Ridgewood's  Priority  Return From  Operations,  as defined,  for any  preceding
fiscal year,

Second,  the Company shall  distribute  to Ridgewood  100% of Net Cash Flow From
Operations  until  Ridgewood  has  received  Ridgewood's  Priority  Return  From
Operations for the current fiscal year.

Third, the Company shall distribute 100% of Net Cash Flow From Operations to the
Members,  other than Ridgewood,  in accordance with the respective  interests of
such Members  until such Members have  collectively  received an amount equal to
the amount distributed to Ridgewood during the current fiscal year.

Fourth,  the Company shall  thereafter  distribute any remaining  balance of Net
Cash Flow From Operations 25% to Ridgewood and 75% to the remaining Members,  in
accordance  with the  respective  interest of such  Members,  until such time as
Ridgewood has received  aggregate  distributions  equal to  Ridgewood's  Initial
Capital  Contribution,  as defined.  At such time, the distribution  percentages
shall be amended to 50% Ridgewood and 50% to the remaining Members.

d.       Distributions  of Net Cash Flow  From  Capital  Events:  The  Company
  shall  distribute  Net Cash Flow From Capital  Events,  as  defined,  50% to
  Ridgewood  and 50% to the  remaining  Members,  in  accordance  with the
     respective interests of such Members.

2. Summary of Significant Accounting Policies

Use of estimates
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities,  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from the estimates.

Cash and cash equivalents
The  Company  considers  all highly  liquid  investments  with  maturities  when
purchased of three months or less as cash and cash equivalents.

Revenue recognition
Revenue is recognized  when the power is transmitted or the service is provided.
Interest income is recorded when earned.

Inventories
Inventories, consisting of wood and propane, are stated at cost, with cost being
determined on the first-in, first-out method.

Plant and equipment
Machinery  and  equipment,   consisting  principally  of  electrical  generating
equipment,  is stated at cost. Renewals and betterments that increase the useful
lives of the assets are  capitalized.  Repair and maintenance  expenditures  are
expensed as incurred.

Depreciation  is recorded  using the  straight-line  method  over the  estimated
useful life of the assets,  ranging from 5 to 20 years. During each of the years
ended  December  31,  2000,  1999 and 1998,  the Company  recorded  depreciation
expense of $171,489.

Intangible assets
Intangible assets are amortized over 20 years on a straight-line  basis.  During
each of the years ended December 31, 2000,  1999 and 1998, the Company  recorded
amortization expense of $13,282.

Significant Customers
During 2000, the Company's  three largest  customers  accounted for 55%, 33% and
12% of total  revenues.  During 1999,  the  Company's  three  largest  customers
accounted for 41%, 22% and 19% of total revenues.  Other customers  individually
accounted for less than 10% of total revenues.

Income taxes
No provision is made for income taxes in the accompanying  financial  statements
as the income or loss of the Company is passed  through and  included in the tax
returns of the partners.

Reclassification
Certain items in previously  issued financial  statements have been reclassified
for comparative purposes.

3.       Notes Payable

Notes payable consist of the following at December 31, 2000 and 1999:

                                                       2000         1999
                                                    ----------   ----------
Note payable to Indeck Energy
 Services,  Inc. (a Member), due
 on demand with interest at 5% ..................   $2,400,500   $1,800,500

Note  payable to  Ridgewood  Maine,
 LLC (a  Member),  due on
 demand with interest at 5% .....................    2,400,500    1,800,500
                                                    ----------   ----------
                                                    $4,801,000   $3,601,000
                                                    ----------   ----------
4.       Operating Status

Both projects have temporarily  suspended  operations;  one in December 1997 and
the other in  January  1998.  One  facility  is  expected  to  resume  full-time
operations  in May 2001.  It is  management's  intent not to  operate  the other
facility,  except during periods of peak demand,  until a profitable power sales
contract  can be  negotiated.  Based on  forecasts  related to these  contracts,
management  believes that the Company will be able to recover the carrying value
of its long-lived assets and meet its financial obligations.  The Members intend
to continue  providing  the necessary  financial  support to the Company for the
foreseeable future and to not demand payment,  within the next twelve months, of
the notes payable discussed in Note 3.

5.       Related Party transactions

The Company is required to pay certain Members a fee for management  services of
$100,000 per year.  Additional management fees of up to $200,000 per year may be
payable contingent upon achieving  Ridgewood's  Priority Return from Operations,
as defined.  No  contingent  management  fee has been accrued as of December 31,
2000 or 1999.

The Company  incurred  expenses  of  approximately  $770,000  for the year ended
December 31, 1998 from Indeck Operations, Inc. and Indeck Energy Services, Inc.,
companies  affiliated through common ownership,  for the operation,  maintenance
and administration of the Company's facilities.

Under an Operating  Agreement with the Trusts,  Ridgewood  Power  Management LLC
(formerly Ridgewood Power Management Corporation,  "Ridgewood  Management"),  an
entity  related  to the  managing  shareholder  of  the  Trusts  through  common
ownership,   provides   management,   purchasing,   engineering,   planning  and
administrative services to the Company. Ridgewood Management charges the Company
at its cost for these services and for the allocable  amount of certain overhead
items.  Allocations of costs are on the basis of identifiable direct costs, time
records or in  proportion to amounts  invested in projects  managed by Ridgewood
Management.  During  the years  ended  December  31,  2000 and  1999,  Ridgewood
Management charged the Company $203,191 and $197,825, respectively, for overhead
items  allocated  in  proportion  to the amount  invested in  projects  managed.
Ridgewood  Management  also charged the Company for all of the remaining  direct
operating and non-operating expenses incurred during the periods

6.       Fair Value of Financial Instruments

At  December  31,  2000 and 1999,  the  carrying  value of the  Company's  cash,
accounts receivable and accounts payable approximates their fair value.

7.       Dispute with ISO

From June  through  December  1999,  the  Facilities  periodically  operated  on
dispatch from ISO-New England, Inc. (the "ISO") and also submitted offers to the
ISO to run at high prices during power emergencies.  The Facilities have claimed
the ISO owes them  approximately  $14 million for the electricity  products they
provided in those  periods and the ISO has claimed that no material  revenues at
all are due to the projects. As a result, on October 24, 2000, the Company filed
a complaint  against the ISO in the Superior Court of Delaware  alleging,  among
other  things,  that the ISO's  actions  resulted  in a breach of an  express or
implied  contract,  violated  certain  consumer  protection laws and amounted to
fraud.  The ISO removed the litigation to Federal District Court in Delaware and
the Company has filed a motion to remand the matter back to the Delaware courts.
The motion has not yet been  decided by the Federal  Court.  The Company has not
recorded any of the disputed  revenues in their  financial  statements and it is
too early to estimate the outcome of the dispute.
<PAGE>
                                Ridgewood UK, LLC

                        Consolidated Financial Statements

                           December 31, 2000 and 1999


                                     <PAGE>


                        Report of Independent Accountants


To the Members of Ridgewood UK, LLC:

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements  of operations  and  comprehensive  income,  changes in
member's equity and of cash flows present fairly, in all material respects,  the
financial  position of Ridgewood UK, LLC (the "Company") and its subsidiaries at
December 31, 2000 and 1999,  and the results of their  operations and their cash
flows for the year ended  December  31,  2000,  and the  period May 27,  through
December 31, 1999, in conformity with accounting  principles  generally accepted
in  the  United  States  of  America.   These   financial   statements  are  the
responsibility of the Company's management;  our responsibility is to express an
opinion on these  financial  statements  based on our audits.  We conducted  our
audits of these  statements in  accordance  with  auditing  standards  generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe that our audits provide a reasonable basis for our opinion.



PricewaterhouseCoopers LLP
New York, NY
March 23, 2001


<PAGE>



Ridgewood UK, LLC
Consolidated Balance Sheet
--------------------------------------------------------------------------------

                                                           December 31,
                                                  -----------------------------
                                                    2000                 1999
                                                  ------------     ------------
Assets:
Cash and cash equivalents ....................    $  3,404,244     $  3,378,123
Accounts receivable, trade ...................         538,183        1,389,285
Other assets .................................         562,140        1,321,594
                                                  ------------     ------------
     Total current assets ....................       4,504,567        6,089,002
                                                  ------------     ------------

Plant and equipment ..........................      12,604,259       13,601,629
Less - Accumulated depreciation ..............        (972,316)        (272,870)
                                                  ------------     ------------
      Plant and equipment, net ...............      11,631,943       13,328,759
                                                  ------------     ------------

Electric power sales contract ................      10,956,161       11,637,924
Less - Accumulated amortization ..............      (1,234,212)        (372,303)
                                                  ------------     ------------
       Electric power sales contract, net ....       9,721,949       11,265,621
                                                  ------------     ------------

     Total assets ............................    $ 25,858,459     $ 30,683,382
                                                  ------------     ------------


Liabilities and Member's Equity:
Liabilities:
Current portion of long-term debt ............    $    622,386     $    481,898
Accounts payable and accrued expenses ........         604,764        4,122,728
                                                  ------------     ------------
     Total current liabilities ...............       1,227,150        4,604,626

Long-term debt, less current portion .........       9,215,778        8,701,569
Deferred income taxes ........................         764,902          460,878

Commitments and contingencies

Member's equity ..............................      14,650,629       16,916,309
                                                  ------------     ------------
     Total liabilities and member's equity ...    $ 25,858,459     $ 30,683,382
                                                  ------------     ------------





        See accompanying notes to the consolidated financial statements.

<PAGE>

Ridgewood UK, LLC
Consolidated Statement of Operations and Comprehensive Income (Loss)
--------------------------------------------------------------------------------

                                                   For the Period From
                               For the Year Ended  May 27, 1999 to
                                December 31, 2000  December 31, 1999
                                      -----------    -----------
Revenue ...........................   $ 5,559,304    $ 2,862,290

Cost of sales .....................     3,884,725      1,595,189
                                      -----------    -----------

Gross profit ......................     1,674,579      1,267,101

General and administrative expenses       192,041        539,811
                                      -----------    -----------

Income from operations ............     1,482,538        727,290

Other income (expense):
     Interest income ..............       165,235         30,708
     Interest expense .............      (828,369)      (271,522)
                                      -----------    -----------

Income before taxes ...............       819,404        486,476

Provision for income taxes ........       178,274        306,155
                                      -----------    -----------

Income before extraordinary loss ..       641,130        180,321

Extraordinary loss from early
 extinguishments of debt ..........        89,610           --
                                      -----------    -----------

Net income ........................       551,520        180,321

Cumulative translation adjustment .    (1,299,440)        68,421

                                      -----------    -----------
Comprehensive (loss) income .......   $  (747,920)   $   248,742
                                      -----------    -----------








        See accompanying notes to the consolidated financial statements.

<PAGE>



Ridgewood UK, LLC
Consolidated Statement of Changes In Member's Equity
For the Year  Ended  December  31,  2000  and the  Period  From May 27,  1999 to
December 31, 1999
--------------------------------------------------------------------------------


Initial capital contribution                               $ 16,667,567

Net income                                                      180,321

Cumulative translation adjustment                                68,421
                                                       ------------------

Member's equity, December 31, 1999                           16,916,309

Net income                                                      551,520

Distributions                                                (1,517,760)

Cumulative translation adjustment                            (1,299,440)
                                                       ------------------

Member's equity, December 31, 2000                          $14,650,629
                                                       ------------------












        See accompanying notes to the consolidated financial statements.

<PAGE>



Ridgewood UK, LLC
Consolidated Statement of Cash Flows
--------------------------------------------------------------------------------

                                                             For the Period From
                                      For the Year Ended     May 27, 1999 to
                                       December 31, 2000     December 31, 1999
                                             ------------    ------------
Cash flows from operating activities:
Net income ...............................   $    551,520    $    180,321
                                             ------------    ------------
Adjustments to reconcile net income to
 cash flows from operating activities:
 Depreciation and amortization ...........      1,458,040         645,173
 Changes in assets and liabilities,
  net of assets acquired
  Decrease (increase) in accounts
   receivable, trade .....................        761,017        (371,375)
  Decrease (increase) in other assets ....        672,968      (1,315,062)
  (Decrease) increase in accounts payable
   and accrued expenses ..................     (3,591,872)      3,652,266
  Increase in deferred taxes .............        343,081         460,113
                                             ------------    ------------
 Total adjustments .......................       (356,766)      3,071,115
                                             ------------    ------------
 Net cash provided by operating activities        194,754       3,251,436
                                             ------------    ------------
Cash flows from investing activities:
Capital expenditures .....................           --       (16,436,548)
                                             ------------    ------------
 Net cash used in investing activities ...           --       (16,436,548)
                                             ------------    ------------
Cash flows from financing activities:
Borrowing from bank ......................      2,468,383            --
Payment of bank debt .....................     (1,119,256)       (104,332)
Distributions to member ..................     (1,517,760)           --
Cash contributions .......................           --        16,667,567
                                             ------------    ------------
 Net cash (used in) provided by
  financing activities ...................       (168,633)     16,563,235
                                             ------------    ------------

Net increase in cash and cash equivalents          26,121       3,378,123

Cash and cash equivalents at beginning
 of period ...............................      3,378,123            --
                                             ------------    ------------
Cash and cash equivalents at end of period   $  3,404,244    $  3,378,123
                                             ------------    ------------





        See accompanying notes to the consolidated financial statements.


<PAGE>



Ridgewood UK, LLC
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

1.       Organization and Business Activity

On May 27, 1999,  Ridgewood UK, LLC was formed as a Delaware  limited  liability
company (the  "Company").  Ridgewood  Electric  Power Trust V ("Trust V") is the
sole member of the Company.

On June 30, 1999, Trust V contributed $16,667,567 to the Company and the Company
purchased 100% of the equity of Combined Landfill Projects, Ltd. ("CLP") and its
subsidiaries  which own six landfill gas power plants  located in Great Britain.
The total  purchase  price was  $16,436,548,  including  $617,567 of acquisition
costs.

The plants have an installed capacity of 14.5 megawatts and sell the electricity
under 15 year contracts to two  quasi-autonomous  non-governmental  organization
that  purchase  electricity  generated  by  renewable  sources  on behalf of all
British utilities.

2.       Summary of Significant Accounting Policies

Principles of consolidation
The consolidated  financial  statements  include the accounts of the Company and
its wholly-owned subsidiaries.  All material intercompany transactions have been
eliminated.

Use of estimates
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities,  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from the estimates.

Cash and cash equivalents
The  Company  considers  all highly  liquid  investments  with  maturities  when
purchased of three months or less as cash and cash equivalents.

Revenue recognition
Power  generation  revenue  is  recognized  based  on power  delivered  at rates
stipulated in the power sales contract. Interest income is recorded when earned.

Foreign currency translation
The financial  statements of the Company's  non-United  States  subsidiaries are
translated  into United States  dollars  using  current rates of exchange,  with
gains or losses included in the cumulative translation adjustment account in the
shareholders' equity section of the consolidated balance sheet.

Plant and equipment
Machinery  and  equipment,   consisting  principally  of  electrical  generating
equipment,  is stated at cost. Renewals and betterments that increase the useful
lives of the assets are  capitalized.  Repair and maintenance  expenditures  are
expensed as incurred.

Depreciation  is recorded  using the  straight-line  method  over the  estimated
useful life of the  assets,  which  ranges  from 3 to 15 years.  During the year
ended  December  31, 2000 and the period from May 27, 1999 to December 31, 1999,
the  Company   recorded   depreciation   expense  of  $730,635   and   $272,870,
respectively.

Intangible asset
A  portion  of the  purchase  price of the six  landfill  gas power  plants  was
assigned to the electric power sales  contracts and is being  amortized over the
15 year life of the contracts on a  straight-line  basis.  During the year ended
December  31, 2000 and the period from May 27, 1999 to December  31,  1999,  the
Company recorded amortization expense of $727,405 and $372,303, respectively.

Supplemental cash flow information
Total  interest paid during the year ended December 31, 2000 and the period from
May 27, 1999 to December 31, 1999 was $553,003 and $305,953, respectively.

Income taxes
The Company  utilizes the asset and liability  method of  accounting  for income
taxes for its United Kingdom  securities.  The Company  recorded a provision for
United Kingdom income taxes of $178,274 and $306,155 for the year ended December
31, 2000 and the period from May 27, 1999 to December 31, 1999, respectively.

No  provision  is made  for  United  States  income  taxes  in the  accompanying
financial  statements  as the  United  States  income or loss of the  Company is
passed through and included in the tax returns of the partners.

3.       Long-Term Debt

Following is a summary of long-term debt at December 31, 2000 and 1999:

                             2000           1999
                          -----------    -----------
Bank loan payable .....   $ 9,838,164    $ 9,183,467
Less - Current maturity      (622,386)      (481,898)
                          -----------    -----------
Total long-term debt ..   $ 9,215,778    $ 8,701,569
                          -----------    -----------

In 2000, the Company renegotiated the terms of its long-term debt with the bank.
In connection with the  renegotiated  bank loan, the Company  incurred a $89,610
extraordinary  loss for the write-off of deferred loan costs.  The  renegotiated
bank loan is repayable in semi annual installments each March 31st and September
30th through  September  30, 2010.  The loan bears  interest at LIBOR plus 2.25%
(8.82% at December 31, 2000). The notes are secured by substantially  all of the
assets of the projects.

Scheduled principal  repayments of long-term debt for the next five years are as
follows:
               Year Ended
               December 31,                Payment
                 2001                      622,386
                 2002                      688,166
                 2003                      760,637
                 2004                      842,026
                 2005                      931,106

4.       Fair Value of Financial Instruments

At December  31,  2000 and 1999,  the  carrying  values of the  Company's  cash,
accounts receivable and accounts payable approximate their fair values. The fair
value of the  long-term  debt,  calculated  using  current  rates for loans with
similar maturities, also approximates its carrying value.

5.       Electric Power Sales Contract

The  Company is  committed  to sell all of the  electricity  it  produces to two
quasi-autonomous   non-governmental   organizations  that  purchase  electricity
generated by renewable  sources (such as landfill gas power plants) on behalf of
all British utilities in order to meet British  environmental  protection goals.
The  electricity  prices will be  increased  annually  by a factor  equal to the
percentage increase in the United Kingdom Retail Price Index.

7.       Transactions with Affiliates

CLP Services Limited ("CLPS"), a new company organized by the previous owners of
CLP, provides  day-to-day  services to the projects.  CLPS is paid a flat fee of
approximately  1.2 cents per  kilowatt-hour  for those  services  (adjusted  for
increases in the Retail  Price  Index) and is eligible  for bonus  payments if a
project's actual annual electricity output exceeds 90% of its capacity.  CLPS is
also paid  approximately  $88,000 per year (also  adjusted for  increases in the
Retail Price Index) for management services for the various companies owning the
six existing projects. The gas extraction and cleaning systems for the landfills
will be operated by CLPS for no additional  cost.  The Company may terminate the
contract with CLPS if at the end of any year the projects in the aggregate  have
not  produced  at least  90% of their  capacity  (adjusted  for loss of time for
scheduled  downtime,  catastrophic  failures  not caused by CLPS or  failures to
receive landfill gas not caused by CLPS), or at any time if it can be shown that
it is physically  impossible  for the plants as a whole to meet the 90% standard
for the current year.

8.       Additional Projects

CLPS will proceed to develop additional landfill gas plants in Great Britain and
will bear the  developmental  costs itself. As each remaining plant is completed
and  commissioned,  the Company  expects  that the bank will  provide  long-term
financing for  approximately  55% of the plant's  reasonable cost,  although the
bank has not yet  committed  to do so. If full bank  financing is obtained for a
plant,  the Company has the option to buy the equity  interest  from CLPS.  Four
sites were  completed  and acquired by the Company in the first  quarter of 2001
for  approximately  $3,100,000.  The  Ridgewood  Power  Growth Fund (the "Growth
Fund") supplied the required  development equity for the four plants acquired in
January 2001 and expects to supply the required equity for any additional plants
purchased by the Company.  To the extent that the Growth Fund supplies  capital,
it will receive an  undivided  interest in the entire  package of operating  and
developmental projects.




<PAGE>

EXHIBIT 24 -- POWERS OF ATTORNEY

POWER OF ATTORNEY

         KNOW ALL  PERSONS  BY THESE  PRESENTS,  that  the  undersigned,  Joseph
Ferrante,  appoints Robert E. Swanson and Martin V. Quinn,  and each of them, as
his true and lawful  attorneys-in-fact  with full power to act and do all things
necessary,  advisable or  appropriate,  in their  discretion,  to execute on his
behalf as an Independent Trustee of Ridgewood Electric Power Trust II, Ridgewood
Electric  Power  Trust III and  Ridgewood  Electric  Power  Trust V, the  Annual
Reports  on Form  10-K  for the year  ended  December  31,  2000 for each of the
above-named trusts, and all amendments or documents relating thereto.

         IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 24th day of March, 2001, at Carlsbad, California.

                                                /s/Joseph Ferrante
                                                     Joseph Ferrante


POWER OF ATTORNEY

         KNOW  ALL  PERSONS  BY THESE  PRESENTS,  that  the  undersigned,  Ralph
Hellmold,  appoints Robert E. Swanson and Martin V. Quinn,  and each of them, as
his true and lawful  attorneys-in-fact  with full power to act and do all things
necessary,  advisable or  appropriate,  in their  discretion,  to execute on his
behalf as an Independent Trustee of Ridgewood Electric Power Trust II, Ridgewood
Electric  Power  Trust III and  Ridgewood  Electric  Power  Trust IV, the Annual
Reports  on Form  10-K  for the year  ended  December  31,  2000 for each of the
above-named trusts, and all amendments or documents relating thereto.

         IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 24th day of March, 2001, at Carlsbad, California.

                                                 /s/Ralph Hellmold
                                                     Ralph Hellmold


POWER OF ATTORNEY

         KNOW ALL  PERSONS BY THESE  PRESENTS,  that the  undersigned,  Jonathan
Kaledin,  appoints  Robert E. Swanson and Martin V. Quinn,  and each of them, as
his true and lawful  attorneys-in-fact  with full power to act and do all things
necessary,  advisable or  appropriate,  in their  discretion,  to execute on his
behalf as an Independent Trustee of Ridgewood Electric Power Trust II, Ridgewood
Electric  Power  Trust III and  Ridgewood  Electric  Power  Trust V, the  Annual
Reports  on Form  10-K  for the year  ended  December  31,  2000 for each of the
above-named trusts, and all amendments or documents relating thereto.

         IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 24th day of March, 2001, at Carlsbad, California.

                                                 /s/Jonathan Kaledin
                                                     Jonathan Kaledin