Exhibit
      99.1




FINANCIAL
      STATEMENTS AND


REPORT
      OF
      INDEPENDENT CERTIFIED


PUBLIC
      ACCOUNTANTS





**INDECK
      MAINE ENERGY, LLC**





December
      31, 2006 and 2005










**C
        O N T E N T S**
 
 
 
 PageReport
                  of Independent Certified Public Accountants
              3Financial
                  StatementsBalance
                  Sheets
              4Statement
                  of Operations and Changes in Members’ Deficit
              5Statements
                  of Cash Flows
              6Notes
                  to Financial Statements
              7
                  -
                  18




**REPORT
      OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS**











The
      Members


**Indeck
      Maine Energy, LLC**








We
      have
      audited the accompanying balance sheets of Indeck Maine Energy, LLC (an Illinois
      limited liability company) as of December 31, 2006 and 2005, and the related
      statements of operations and changes in members’ deficit andcash flows for each of the three
      years in the period ended
      December 31, 2006. 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 in accordance with auditing standards generally accepted
      in
      the United States of America as established by the American Institute of
      Certified Public Accountants.  Those standards 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
      consideration of internal control over financial reporting as a basis for
      designing audit procedures that are appropriate in the circumstances, but not
      for the purpose of expressing an opinion on the effectiveness of the Company’s
      internal control over financial reporting.  Accordingly, we express no
      such opinion.  An audit also 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, as well as evaluating the overall financial statement
      presentation.  We believe that our audits provide a reasonable basis
      for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Indeck Maine Energy, LLC as of
      December 31, 2006 and 2005, and the results of its operations and its cash
      flows
      for each of the three years in the period ended December 31, 2006 in conformity
      with accounting principles generally accepted in the United States of
      America.
















Edison,
      New Jersey


August
      6,
      2007




-
          3 -





Indeck
      Maine Energy, LLC





**BALANCE
      SHEETS**





December
      31,


(in
      thousands)





ASSETS
            
            **2006**
            
            
            2005Current
                assetsCash
                and cash equivalents
            
            **$**
            **3,685**
            
            
            $
            3,714Trade
                receivables
            
            ****
            **3,831**
            
            
            
            5,473Due
                from affiliates
            
            ****
            **137**
            
            
            
            -Inventory
            
            ****
            **1,125**
            
            
            
            1,753Prepaid
                expenses
            
            ****
            **39**
            
            
            
            43Total
                current assets
            
            ****
            **8,817**
            
            
            
            10,983Property,
                plant and equipment, net
            
            ****
            **8,808**
            
            
            
            6,577Security
                deposits
            
            ****
            **2,542**
            
            
            
            2,559Other
                assets
            
            ****
            **118**
            
            
            
            193Total
                assets
            
            **$**
            **20,285**
            
            
            $
            20,312LIABILITIES
                AND MEMBERS’ DEFICITCurrent
                liabilitiesAccounts
                payable and accrued expenses
            
            **$**
            **871**
            
            
            $
            706Due
                to affiliates
            
            ****
            **896**
            
            
            
            1,502Management
                fees payable
            
            ****
            **800**
            
            
            
            700Term
                loan payable - current portion
            
            ****
            **1,100**
            
            
            
            1,100Note
                payable - current portion
            
            ****
            **48**
            
            
            
            45Total
                current liabilities
            
            ****
            **3,715**
            
            
            
            4,053Term
                loan payable - long-term portion
            
            ****
            **623**
            
            
            
            1,823Note
                payable - long-term portion
            
            ****
            **165**
            
            
            
            213Notes
                payable to members
            
            ****
            **16,301**
            
            
            
            16,301Interest
                payable to members
            
            ****
            **3,135**
            
            
            
            3,403Total
                liabilities
            
            ****
            **23,939**
            
            
            
            25,793Commitments
                and contingenciesTotal
                members’ deficit
            
            ****
            **(3,654**
            **)**
            
            
            (5,481
            )Total
                liabilities and members’ deficit
            
            **$**
            **20,285**
            
            
            $
            20,312








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




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          4 -




Indeck
      Maine Energy, LLC





**STATEMENTS
      OF OPERATIONS AND**


**CHANGES
      IN MEMBERS’ DEFICIT**





Year
      ended December 31,


(in
      thousands)











**2006**
            
            
            2005
            
            
            2004Power
                generation revenue
            
            **$**
            **18,921**
            
            
            $
            21,536
            
            
            $
            8,605Renewable
                attribute revenue
            
            ****
            **14,618**
            
            
            
            12,283
            
            
            
            6,179Total
                revenues
            
            ****
            **33,539**
            
            
            
            33,819
            
            
            
            14,784Cost
                of revenues
            
            ****
            **29,921**
            
            
            
            26,870
            
            
            
            16,542Gross
                profit (loss)
            
            ****
            **3,618**
            
            
            
            6,949
            
            
            
            (1,758
            )General
                and administrative expenses
            
            ****
            **364**
            
            
            
            544
            
            
            
            394Income
                (loss) from operations
            
            ****
            **3,254**
            
            
            
            6,405
            
            
            
            (2,152
            )Other
                (expense) incomeOther
                income
            
            ****
            **12**
            
            
            
            -
            
            
            
            -Interest
                income
            
            ****
            **342**
            
            
            
            87
            
            
            
            9Interest
                expense
            
            ****
            **(1,781**
            **)**
            
            
            (1,550
            )
            
            
            (811
            )Other
                expense, net
            
            ****
            **(1,427**
            **)**
            
            
            (1,463
            )
            
            
            (802
            )Net
                income (loss)
            
            ****
            **1,827**
            
            
            
            4,942
            
            
            
            (2,954
            )Members’
                deficit, beginning
            
            ****
            **(5,481**
            **)**
            
            
            (10,423
            )
            
            
            (7,469
            )Members’
                deficit, ending
            
            **$**
            **(3,654**
            **)**
            
            $
            (5,481
            )
            
            $
            (10,423
            )






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




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          5 -




Indeck
      Maine Energy, LLC





**STATEMENTS
      OF CASH FLOWS**





Year
      ended December 31,


(in
      thousands)








**2006**
            
            
            2005
            
            
            2004Cash
                flows from operating activitiesNet
                income (loss)
            
            **$**
            **1,827**
            
            
            $
            4,942
            
            
            $
            (2,954
            )Adjustments
                to reconcile net income (loss) to net cashprovided
                by (used in) operating activitiesDepreciation
            
            ****
            **500**
            
            
            
            324
            
            
            
            261Loss
                on disposal of vehicle
            
            ****
            **(34**
            **)**
            
            
            -
            
            
            
            -Noncash
                interest payable to members
            
            ****
            **1,615**
            
            
            
            1,355
            
            
            
            683Changes
                in operating assets and liabilitiesRestricted
                cash
            
            ****
            **-**
            
            
            
            -
            
            
            
            (2
            )Trade
                receivables
            
            ****
            **1,642**
            
            
            
            (2,920
            )
            
            
            (2,305
            )Inventory
            
            ****
            **628**
            
            
            
            (1,422
            )
            
            
            (271
            )Prepaid
                expenses
            
            ****
            **4**
            
            
            
            44
            
            
            
            (74
            )Security
                deposits
            
            ****
            **17**
            
            
            
            (709
            )
            
            
            (1,690
            )Other
                assets
            
            ****
            **75**
            
            
            
            75
            
            
            
            (268
            )Accounts
                payable and accrued expenses
            
            ****
            **165**
            
            
            
            192
            
            
            
            (76
            )Due
                to/from affiliates, net
            
            ****
            **(743**
            **)**
            
            
            (676
            )
            
            
            1,412Management
                fees payable
            
            ****
            **100**
            
            
            
            100
            
            
            
            100Total
                adjustments
            
            ****
            **3,969**
            
            
            
            (3,637
            )
            
            
            (2,230
            )Net
                cash provided by (used in) operating activities
            
            ****
            **5,796**
            
            
            
            1,305
            
            
            
            (5,184
            )Cash
                flows from investing activitiesCapital
                expenditures
            
            ****
            **(2,697**
            **)**
            
            
            (2,834
            )
            
            
            (693
            )Cash
                flows from financing activitiesProceeds
                from notes payable to members
            
            ****
            **-**
            
            
            
            4,000
            
            
            
            4,000Repayment
                of interest payable to members
            
            ****
            **(1,883**
            **)**
            
            
            -
            
            
            
            -Repayment
                of note payable
            
            ****
            **(45**
            **)**
            
            
            -
            
            
            
            -Repayment
                of term loan payable, net of restricted cashapplied
                of $1,777 in 2005
            
            ****
            **(1,200**
            **)**
            
            
            (1,300
            )
            
            
            -Proceeds
                from term loan, net of restricted cash of $1,775
            
            ****
            **-**
            
            
            
            -
            
            
            
            4,225Net
                cash (used in) provided by financing activities
            
            ****
            **(3,128**
            **)**
            
            
            2,700
            
            
            
            8,225Net
                (decrease) increase in cash and cash equivalents
            
            ****
            **(29**
            **)**
            
            
            1,171
            
            
            
            2,348Cash
                and cash equivalents, beginning of year
            
            ****
            **3,714**
            
            
            
            2,543
            
            
            
            195Cash
                and cash equivalents, end of year
            
            **$**
            **3,685**
            
            
            $
            3,714
            
            
            $
            2,543Supplemental
                disclosure of cash flow information:Cash
                paid during the year for interest
            
            **$**
            **2,049**
            
            
            $
            268
            
            
            $
            111Supplemental
                disclosure of noncash investing and financing activities:Equipment
                acquired under finance agreement
            
            **$**
            **-**
            
            
            $
            259
            
            
            $
            -





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




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          6 -




Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS**





December
      31, 2006 and 2005











**NOTE
      A - DESCRIPTION OF BUSINESS**





Indeck
      Maine Energy, LLC (the “Company”) is an Illinois limited liability company
      formed on April 1, 1997 by Indeck Energy Services, Inc. (“IES”) for the purpose
      of acquiring, operating and managing two 24.5 megawatt wood-fired electric
      generation facilities (the “Facilities”) located in Maine.  The
      Facilities were acquired on June 10, 1997 and the operations will be dissolved
      by 2097.  On June 11, 1997, Ridgewood Maine, LLC (“Ridgewood”), which
      is owned equally by Ridgewood Electric Power Trust IV and Ridgewood Electric
      Power Trust V, purchased a 50% membership interest in the Company from IES
      for
      $14 million.





In
      accordance with the Operating Agreement, fiscal year allocations are to be
      made
      to the members as follows:





*1.    
      Allocation of Profits and Losses*





Profits
      shall be allocated to IES until the cumulative amount of profits allocated
      is
      equal to the cumulative amount of distributions made or to be made to each
      member pursuant to the distribution provisions of the Operating
      Agreement.





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





Losses
      and depreciation allocated to IES in accordance with the Operating Agreement
      may
      not exceed the amount that would cause IES 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 Ridgewood which
      will not be subject to this limitation, in proportion to and to the extent
      of
      its positive Capital Account Balances, as defined.





Also,
      if
      in any fiscal year a member 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.





The
      Operating Agreement authorizes Ridgewood, as the Tax Matters Member, to divide
      other allocations of profits, losses and other items of income, gain, loss
      and
      deduction among the members in any reasonable manner so as to prevent the
      allocations from distorting the manner in which they were intended.




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          7 -





Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      A (continued)**





*2.    
      Distributions of Net Cash Flow From Operations*





First,
      the Company shall distribute to Ridgewood 100% of Net Cash Flow From Operations,
      as defined, 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.





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.





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.  As of December 31, 2006, Ridgewood’s Priority
      Return From Operations is approximately $23.9 million.





Third,
      the Company shall distribute 100% of Net Cash Flow From Operations to IES,
      in
      accordance with its interest until it has 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 IES, 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 allocated 50% to Ridgewood and 50% to IES.





There
      were no distributions of Net Cash Flow From Operations during the years ended
      December 31, 2006, 2005 and 2004.





*3.     Distributions
      of Net Cash Flow From Capital Events*





The
      Company shall distribute Net Cash Flow From Capital Events, as defined, with
      50%
      paid to Ridgewood and 50% paid to IES.  Net Cash Flow from Capital
      Events is defined as any cash received from any source other than Net Cash
      Flow
      From Operations.





There
      were no distributions of Net Cash Flow From Capital events during the years
      ended December 31, 2006, 2005 and 2004.




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          8 -





Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





*1.     Use
      of Estimates*





The
      preparation of financial statements in accordance with accounting principles
      generally accepted in the United States of America requires the Company to
      make
      estimates and judgments that affect the reported amounts of assets, liabilities,
      revenue and expenses, and related disclosure of contingent assets and
      liabilities.  On an ongoing basis, the Company evaluates its
      estimates, including bad debts, recoverable value of property, plant and
      equipment and recordable liabilities for litigation and
      other contingencies.  The Company bases its estimates on
      historical experience, current and expected conditions and various other
      assumptions that are believed to be reasonable under the circumstances, the
      results of which form the basis for making judgments about the carrying values
      of assets and liabilities that are not readily apparent from other
      sources.  Actual results may differ from these estimates under
      different assumptions or conditions.





*2.     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.  Cash balances
      with banks as of December 31, 2006 and 2005, exceed insured limits by
      approximately $3,482,000 and $3,511,000, respectively.





*3.     Trade
      Receivables*





Trade
      receivables are recorded at invoice price in the period in which the related
      revenues are earned, and do not bear interest.  No allowance for bad
      debt expense was provided based upon historical write-off experience, evaluation
      of customer credit condition and the general economic status of the
      customers.





*4.     Revenue
      Recognition*





Power
      generation revenue is recorded in the month of delivery, based on the actual
      volume sold at daily market rates through an Independent System Operator
      (“ISO”).  Renewable attribute revenue is derived from the sale of
      renewable portfolio standard attributes (“RPS Attributes”). As discussed in Note
      H, qualified renewable electric generation facilities produce RPS Attributes
      when they generate electricity.  Renewable attribute revenue is
      recorded in the month in which the attributes are produced, as the Company
      has
      substantially completed its obligations for entitled benefits, represented
      by
      the underlying generation of power within specific environmental
      requirements.




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          9 -





Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      B (continued)**





*5.     Inventory*





Inventory,
      consisting of wood, is stated at the lower of cost or market value, with cost
      being determined using the first-in, first-out method.





*6.     Impairment
      of Long-Lived Assets*





The
      Company evaluates long-lived assets, such as property, plant and equipment,
      when
      events or changes in circumstances indicate that the carrying value of such
      assets may not be recoverable.  The determination of whether an
      impairment has occurred is made by comparing the carrying value of an asset
      to
      the estimated undiscounted cash flows attributable to that asset.  If
      an impairment has occurred, the impairment loss recognized is the amount by
      which the carrying value exceeds the estimated fair value of the asset, which
      is
      based on the estimated discounted future cash flows.





*7.     Property,
      Plant and Equipment*





Property,
      plant and equipment, consisting of land, power generation facilities, equipment
      and construction in progress, are stated at cost.  Renewals and
      betterments that increase the useful lives of the assets are
      capitalized.  Repair and maintenance expenditures are expensed as
      incurred.





The
      Company uses the straight-line method of depreciation over the estimated useful
      life of the assets:





Power
                generation facilities
            20
                yearsEquipment
            5
                years





*8.     Significant
      Customers*





During
      2006, 2005 and 2004, the Company’s two largest customers accounted for 56% and
      34%, 63% and 27%, and 57% and 42% of total revenues, respectively.





*9.     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 income
      tax returns of the members.




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          10 -





Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      B (continued)**





*10.     New
      Accounting Standards and Disclosures*





*SFAS
      No. 157*





In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value
      Measurements.”  SFAS No. 157 defines fair value, establishes a
      framework for measuring fair value in accounting principles generally accepted
      in the United States of America, and expands disclosures about fair value
      measurements.  The Company will adopt SFAS No. 157 in the first
      quarter of 2008 and is still evaluating the effect, if any, on its financial
      position or results of operations.





*SFAS
      No. 159*





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities.”  SFAS No. 159 provides
      the option to report certain financial assets and liabilities at fair value,
      with the intent to mitigate volatility in financial reporting that can occur
      when related assets and liabilities are recorded on different
      bases.  The Company will adopt SFAS No. 159 in the first quarter of
      2008 and is still evaluating the effect, if any, on its financial position
      or
      results of operations.








**NOTE
      C - PROPERTY, PLANT AND EQUIPMENT**





For
      the
      years ended December 31, 2006 and 2005, property, plant and equipment at cost
      and accumulated depreciation were:





**2006**
            
            
            2005(in
                thousands)Land
            
            **$**
            **158**
            
            
            $
            158Power
                generation facilities
            
            ****
            **10,542**
            
            
            
            8,012Equipment
            
            ****
            **211**
            
            
            
            271Construction
                in progress
            
            ****
            **227**
            
            
            
            -****
            **11,138**
            
            
            
            8,441Less
                accumulated depreciation
            
            ****
            **(2,330**
            **)**
            
            
            (1,864
            )**$**
            **8,808**
            
            
            $
            6,577




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          11 -




Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      C (continued)**





For
      the
      years ended December 31, 2006, 2005 and 2004, the Company recorded depreciation
      expense of approximately $500,000, $324,000 and $261,000, respectively, which
      is
      included in cost of revenues.








**NOTE
      D - LONG-TERM DEBT**





On
      August
      6, 2004, the Company entered into a $6,000,000 Mortgage Loan Agreement with
      Commerce Bank/North (“Commerce”).  Pursuant to the terms of the
      agreement, the Company received approximately $4,225,000 with the remaining
      $1,775,000 placed in a restricted reserve account with Commerce.  The
      loan requires the payment of interest only during the period September 1, 2004
      through November 30, 2004.  Interest for this period was based on a
      variable rate equal to the prime rate plus 1%.  On December 1, 2004,
      the loan converted to a term loan bearing interest, which is payable monthly,
      at
      6.27% per annum, which was based on the five-year treasury bill rate as of
      November 24, 2004 plus 275 basis points.  Monthly principal payments
      of $100,000 commenced on January 1, 2005 and will continue through December
      1,
      2009.  The loan is secured by the Company’s assets, with the exception
      of receivables on renewable attribute revenue.





On
      January 25, 2005, the Company and Commerce agreed to amend the commercial
      loan.  Pursuant to the amendment, the restricted reserve funds,
      which amounted to approximately $1,777,000 at December 31, 2004 and were
      part of the $6,000,000 loan, were applied to the outstanding loan balance
      without incurring a prepayment penalty.  As a result of this
      prepayment, the loan will now mature on July 1, 2008.  All other terms
      of the original agreement remain unchanged.





On
      August
      28, 2006, the Company and Commerce amended the mortgage loan note and
      subordination agreement whereby the Company was permitted to make payments
      of up
      to $2,500,000 to its members in 2006 towards outstanding
      obligations.    On December 18, 2006, the Company paid
      approximately $1,883,000 of interest on the subordinated notes payable to its
      members and paid approximately $617,000 to Ridgewood Power Management LLC
      (“Ridgewood Management”) for reimbursement of working capital
      advances.




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          12 -





Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      D (continued)**





Following
      is a summary of term loan payable as of December 31, 2006 and 2005:





Year
                ended December 31,**2006**
            
            
            2005(in
                thousands)Term
                loan payable
            
            **$**
            **1,723**
            
            
            $
            2,923Less
                current portion
            
            ****
            **(1,100**
            **)**
            
            
            (1,100
            )Total
                long-term portion
            
            **$**
            **623**
            
            
            $
            1,823


Remaining
      scheduled repayments of term loan payable as of December 31, 2006 are as
      follows:





Year
                ended December 31,
            
            (in
                thousands)2007
            
            $
            1,1002008
            
            
            623$
            1,723


In
      December 2005, the Company entered into an agreement to finance equipment for
      the West Enfield facility.  The promissory note bears interest at the
      rate of 6.40% per annum.  Monthly installments of approximately
      $5,000, including interest, commenced in January 2006 and will continue through
      December 2010.  The loan is collateralized by the
      equipment.





Following
      is a summary of the note payable as of December 31, 2006:





Year
                ended December 31,**2006**
            
            
            2005(in
                thousands)Note
                payable
            
            **$**
            **213**
            
            
            $
            258Less
                current portion
            
            ****
            **(48**
            **)**
            
            
            (45
            )Total
                long-term portion
            
            **$**
            **165**
            
            
            $
            213





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          13 -




Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      D (continued)**





Remaining
      scheduled repayments of the note payable as of December 31, 2006 are as
      follows:





Year
                ended December 31,
            
            (in
                thousands)2007
            
            $
            482008
            
            
            522009
            
            
            552010
            
            
            58$
            213





**NOTE
      E - NOTES PAYABLE TO MEMBERS**





Notes
      payable to members consist of the following as of December 31, 2006 and
      2005:





**2006**
            
            
            2005(in
                thousands)Note
                payable to IES; interest at 5% per annum
            
            **$**
            **4,150**
            
            
            $
            4,150Note
                payable to IES; interest at 12% per annum
            
            ****
            **2,000**
            
            
            
            2,000Note
                payable to IES; interest at 18% per annum
            
            ****
            **2,000**
            
            
            
            2,000Note
                payable to Ridgewood; interest at 5% per annum
            
            ****
            **4,151**
            
            
            
            4,151Note
                payable to Ridgewood; interest at 12% per annum
            
            ****
            **2,000**
            
            
            
            2,000Note
                payable to Ridgewood; interest at 18% per annum
            
            ****
            **2,000**
            
            
            
            2,000**$**
            **16,301**
            
            
            $
            16,301





The
      notes
      to members, which are payable on demand, are subordinate to the Commerce term
      loan.  Accrued interest on the notes payable to members, which is also
      subordinated to the term loan, is classified as interest payable to
      members.  As a part of the subordination agreement, the members have
      agreed that prior to the payment in full of the Commerce loan and termination
      of
      all obligations of Commerce, the members shall not, without prior written
      consent of Commerce, accelerate the maturity of all or any portion of the
      subordinated debt and related interest, or take any action towards collection
      of
      all or any portion of the subordinated debt or enforcement of any rights, powers
      or remedies under the subordinated debt documents.  On August 28,
      2006, the Company and Commerce amended the mortgage loan note (see Note D)
      and
      subordination agreement whereby the Company was permitted to pay approximately
      $1,883,000 of interest on the subordinated notes payable to its
      members.




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          14 -




Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      E (continued)**





Interest
      payable to members at December 31, 2006 and 2005 is as follows:





December
                31,**2006**
            
            
            2005(in
                thousands)IES
            
            **$**
            **1,567**
            
            
            $
            1,701Ridgewood
            
            ****
            **1,568**
            
            
            
            1,702**$**
            **3,135**
            
            
            $
            3,403





**NOTE
      F - RELATED PARTY TRANSACTIONS**





The
      Company is required to pay certain members of the board of managers 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 positive
      Net
      Cash Flow from Operations and Capital Events, as defined, and are subordinated
      to Ridgewood’s Priority Return from Operations, as defined.  For the
      years ended December 31, 2006, 2005, and 2004, management fees of $100,000
      for
      each of the years are included in cost of revenues.  As of December
      31, 2006 and 2005, the Company has management fees payable of $800,000 and
      $700,000, respectively.





Under
      an
      Operating Agreement with Ridgewood Electric Power Trust IV and Ridgewood
      Electric Power Trust V (collectively, the “Trusts”), 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, 2006, 2005 and 2004, Ridgewood Management charged the Company
      approximately $684,000, $486,000 and $358,000, 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 nonoperating expenses incurred during the
      periods.  Additionally, the Company records noninterest-bearing
      advances from and due to other affiliates in the ordinary course of
      business.  At December 31, 2006 and 2005, the Company had outstanding
      payables and receivables, with the following affiliates:





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          15 -





Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      F (continued)**








Due
                from
            
            
            Due
                to**2006**
            
            
            2005
            
            
            **2006**
            
            
            2005(in
                thousands)Ridgewood
                Management
            
            **$**
            **-**
            
            
            $
            -
            
            
            **$**
            **896**
            
            
            $
            1,432Ridgewood
                Providence Power Partners
            
            ****
            **74**
            
            
            
            -
            
            
            ****
            **-**
            
            
            
            20Ridgewood
                Providence Expansion
            
            ****
            **63**
            
            
            
            -
            
            
            ****
            **-**
            
            
            
            50**$**
            **137**
            
            
            $
            -
            
            
            **$**
            **896**
            
            
            $
            1,502





**NOTE
      G - FAIR VALUE OF FINANCIAL INSTRUMENTS**





At
      December 31, 2006 and 2005, the carrying value of the Company’s cash and cash
      equivalents, accounts receivable, accounts payable and accrued expenses,
      management fee payable and notes payable to members approximates their fair
      value.  The fair value of the term loan payable, calculated using
      current rates for loans with similar maturities, does not differ materially
      from
      its carrying value.








**NOTE
      H - APPROVAL OF QUALIFICATION**





In
      1997,
      Massachusetts enacted the Electric Restructuring Act of 1997 (the “Restructuring
      Act”).  Among other things, the Restructuring Act requires that all
      retail electricity suppliers in Massachusetts (i.e., those entities supplying
      electric energy to retail end-use customers in Massachusetts) purchase a minimum
      percentage of their electricity supplies from qualified new renewable generation
      units powered by one of several renewable fuels, such as solar, biomass or
      landfill.  Beginning in 2003, each such retail supplier must obtain at
      least one (1%) percent of its supply from qualified new renewable generation
      units.  Each year thereafter, the requirement increases one-half of
      one percentage point until 2009, when the requirement equals four (4%) percent
      of each retail supplier’s sales in that year.  Subsequent to 2009, the
      increase in the percentage requirement will be determined and set by the
      Massachusetts Division of Energy Resources (“DOER”).





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          16 -




Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      H (continued)**





On
      July
      8, 2002, the Company received a “Statement of Qualification” from the DOER
      pursuant to the renewable portfolio standards (“RPS”) adopted by
      Massachusetts.  Since the Company has been qualified, it may sell to
      retail electric suppliers the RPS Attributes associated with its electrical
      energy.  Retail electric suppliers need to purchase RPS Attributes
      associated with renewable energy and not necessarily the energy
      itself.  Thus, electrical energy and RPS Attributes are separable
      products and need not be sold or purchased as a bundled
      product.  Retail electric suppliers in Massachusetts will then use the
      purchase of such RPS Attributes to demonstrate compliance with the Restructuring
      Act and RPS Regulations.








**NOTE
      I - COMMITMENTS AND CONTINGENCIES**





The
      Company and several of its affiliates have an agreement with a power marketer
      for which they are committed to sell RPS Attributes derived from their electric
      generation.  The agreement provides such power marketer with six
      separate annual options to purchase such attributes from 2004 through 2009
      at
      fixed prices, as defined.  If the Company and its affiliates fail to
      supply the required number of attributes, penalties may be
      imposed.  In accordance with the terms of the agreement, if the power
      marketer elects to exercise an annual option and the Company and its affiliates
      produce no attributes for such option year, the Company and its affiliates
      face
      a maximum penalty, which is adjusted annually for the change in the consumer
      price index, among other things, of approximately $3,283,000, measured using
      current factors, for that option year and any other year in which an option
      has
      been exercised and no attributes have been produced.  Pursuant to the
      agreement, the Company is liable for 70% of the total penalty, but may be liable
      up to 100% in the event of the default of its affiliates.  In the
      fourth quarters of 2006 and 2005, the power marketer notified the Company and
      its affiliates that it has elected to purchase the output for 2007 and 2006,
      respectively, as specified in the agreement.  In 2006 and 2005, the
      Company satisfied and delivered the renewable attributes as prescribed in the
      agreement and, therefore, no penalties were incurred.





As
      part
      of the agreement, the Company has assigned and pledged its receivables from
      renewable attribute revenue to the power marketer as well as deposited
      $2,175,000 (included in security deposits in the financial statements) with
      the
      power marketer.  In addition, the Company’s affiliates have deposited
      $825,000 with the power marketer for a total deposit of $3,000,000 as of
      December 31, 2006.




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          17 -




Indeck
      Maine Energy, LLC





**NOTES
      TO FINANCIAL STATEMENTS (continued)**





December
      31, 2006 and 2005











**NOTE
      I (continued)**





The
      Company is subject to legal proceedings involving ordinary and routine claims
      related to its business.  The ultimate legal and financial liability
      with respect to such matters cannot be estimated with certainty and requires
      the
      use of estimates in recording liabilities for potential litigation settlements.
      Estimates for losses from litigation are disclosed if considered reasonably
      possible and accrued if considered probable after consultation with outside
      counsel.  If estimates of potential losses increase or the related
      facts and circumstances change in the future, the Company may be required to
      record additional litigation expense.








**NOTE
      J - SUBSEQUENT EVENT**





In
      July
      2007, the Company entered into an agreement (“Agreement”) with a private utility
      located in Maine (“Utility”), to deliver power at fixed prices beginning
      September 1, 2007 through February 29, 2008.  The pricing under the
      Agreement provides for escalating prices over its term, which exceeds current
      spot market pricing.  In the event that power demands from the Utility
      exceed the Company’s ability to produce, the Company would be required to
      purchase power on the open market and such prices could exceed the rate charged
      to the Utility under the Agreement.  Management believes the
      likelihood of the Company incurring a material negative impact under this
      contract is remote.  In connection with the Agreement, Ridgewood
      Renewable Power supplied a letter of credit for $960,000 on behalf of the
      Company.








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