SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                       FOR ANNUAL AND TRANSITION REPORTS
                      PURSUANT TO SECTIONS 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
 _X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT
             OF 1934__ For the fiscal year ended December 31, 1999

                                   OR

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
      ACT OF 1934__ For the transition period from _________ to _________

                     Commission File 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
April 14, 2000 was $93,288,750.

Exhibit Index is located on page [ ].

<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, year 2000 remediation and other matters relating to the Trust's
future results and the business  climate and are found,  among other places,  at
Items 1(c)(3),  1(c)(4),  1(c)(6)(ii) and 7. 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 of fuel 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 1,611 holders of Investor Shares (the "Investors").  As described
below  in  Item  1(c)(4),  as of  December  31,  1999  the  Trust  had  invested
approximately $55.9 million of its funds in the acquisition of interests in four
sets of  Independent  Power  Projects  and five other  Projects  and is actively
seeking additional Projects for investment.

     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
following chart illustrates some of the important relationships among the Trust,
the  Managing   Shareholder  and  some  of  their  affiliates.   For  additional
information, see Item 10 -- Directors and Executive Officers of the Registrant.

Ridgewood  Electric  Power  Trust V and certain  affiliates  as of March 1, 2000
(some entities and relationships omitted)


             Robert E. Swanson         Family trusts
                         x                  x (Mr. Swanson has
 Sole manager            x                  x  sole voting and
 Chief executive officer x                  x  investment power)
 Owner of 46% of equity  x                  x Owners of 54% of equity
        _________________X__________________X______________________________
       x             x                x        x            x             x
       x             x                x        x            x             x
       x             x                x        x            x             x
Ridgewood   Ridgewood Power   Ridgewood    Ridgewood    Ridgewood   Ridgewood
Securities   Management LLC   Power LLC    Energy       Power VI     Capital
Corporation                                Holding        LLC       Management
                                          Corporation                  LLC

             Operates power                Corporate                  Manager
Placement    plants for five  Managing     Trustee       Co-Managing  of two
agent        power trusts     Shareholder  for all      Shareholder   venture
("Ridgewood    ("RPMCo")       of six      six trusts    (dormant)    capital
 Securities")                  trusts          x          of the      funds &
                            ("Ridgewood        x         Growth Fund   marketing
                               Power")         x     ("Power VI Co")  affiliate
                                  x            x                x   ("Ridgewood
                                  x            x                x     Capital")
                                  x            x                x         x
    ______________________________x____________x_____________   x         x
    x           x          x           x            x        x  x         x
    x           x          x           x            x        x  x         x
Ridgewood   Ridgewood   Ridgewood   Ridgewood   Ridgewood  The Ridgewood  x
Electric    Electric    Electric    Electric    Electric   Power Growth   x
Power Trust Power Trust Power Trust Power Trust Power Trust   Fund        x
    I          II         III          IV           V         (the        x
("Power I") ("Power II") (Power III")("Power IV")(the "Trust") "Growth    x
                                                                Fund")    x
                                                                          x
                                          ________________________________X__
                                          x                                  x
                                          x                                  x
                                   Ridgewood Capital          Ridgewood Capital
                                   Venture Partners         Venture Partners II
                                            (the "Venture Capital Funds")



Ridgewood Power I through IV are referred to as the "Prior Programs."

 (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  electric 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 energy  projects  (but not in nuclear
facilities) or capital projects that have similar risk-return characteristics to
those of electric power  projects.  These projects or potential  investments for
the Trust will be referred to as "Projects." The Trust has acquired  significant
interests in four sets of electric power Projects to date.

     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 and The  Ridgewood  Power Growth Fund (the "Growth  Fund"),  a similar
investment  program managed by Ridgewood Power LLC (the Managing  Shareholder of
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.

         The Trust and the  Growth  Fund have also  funded  Ridgewood  Near East
Development,  LLC, a New Jersey  limited  liability  company that has invested a
total of $10.6 million through March 1, 2000 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"). Operations are expected to begin at one of the sites in March 2000.

For more information, see Item 1(c)(2) - The Trust's Investments, below.

     The following chart summarizes some of these relationships:

                               Ridgewood Power
                                    LLC
                                      x
                                      x   Managing Shareholder
                                      x
            __________________________X___________
            x                                    x
     Ridgewood Electric                Ridgewood Electric Power
     Power Trust IV                          Trust V
             x                                  x
             x  50%                             x  50%
             x                                  x
             x                                  x
    _________X__________________________________X______
    x                   x                             x
    x                   x                             x
    x                   x                             x
Ridgewood Maine         x                   Ridgewood Maine
Hydro Corporation       x                   LLC
          x             x                    x
General   x             x Limited    Member  x
partner   x             x partners   (50%)   x    Indeck Energy
(1%)      x             x (49.5%             x    Services, Inc.
          x             x  each)             x         x (50%)
          x             x                    x         x
Ridgewood Maine Hydro Partners,           Indeck Maine Energy
 L.P.(owner of Maine Hydro                 L.L.C.
 Projects)


     Historically, producers of electric power in the United States consisted of
regulated  utilities,  government  agencies and  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 utility regulatory requirements. Under PURPA, Projects that
are  Qualifying  Facilities  are  generally  not subject to federal  regulation,
including the Public Utility Holding Company Act of 1935, as amended,  and state
regulation. 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 has also invested in five Projects outside the independent  power
industry:  Santee  River Rubber  Company,  which is building 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 is planning to construct a fiber optic
communications  cable under the western  portion of the  Mediterranean  Sea (the
"Mediterranean Fiber Optic Project").

    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,  the remaining 50% interest
was purchased by Power V, a similar  investment program organized in 1996 by the
Managing Shareholder.  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. Most
of the  contracts  are  subject to price  redeterminations  in 2000 based on the
Maine Public  Utilities  Commission's  computations  of avoided cost.  The Trust
anticipates  that the  prices  payable  under  those  contracts  will fall by an
average of 7.5%, thus reducing net Project  revenues by  approximately  $350,000
per year beginning in 2000.

     The Trust's net equity in the income of the Maine Hydro  Projects  for 1999
was $849,000 (a 15.0% return on equity), up from $658,000 in 1998.

     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.  In 1999,  the
operator was paid a total of $323,000 for  operating and  incentive  fees,  down
from $429,000 in 1997. The agreements has 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 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 Trust and Power IV
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 IV
provided an equal amount of the total purchase price.

     The junior  membership  interest in Indeck Maine is owned by Indeck  Energy
Services, Inc. ("Indeck").  The preferred membership interest entitles the Trust
and Power IV to receive all net cash flow from  operations  each year until they
receive a 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 for
that year,  without  cumulation.  Any remaining net operating  cash flow for the
year is payable 25% to the Trust and Power IV together and 75% to Indeck  unless
the Trust and Power IV recover  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 IV and (b) Indeck.

     Under Indeck Maine's amended operating agreement, if the Trust and Power IV
did not receive annual  distributions at least equal to the 18% preferred return
requirement or if Indeck Maine after a cure period failed to make  distributions
to them in  accordance  with the  operating  agreement,  they  had the  right to
designate a majority of the managers of Indeck  Maine.  Under that  arrangement,
until March 1999, Indeck Operations,  Inc., an affiliate of Indeck,  managed the
plant  and was  reimbursed  for its  costs.  In  addition,  the  three  managers
nominated by the original Indeck Maine members received aggregate annual fees of
$300,000  and  certain  other  fees  were  payable  to  Indeck  affiliates.  The
management  agreement  could be  terminated  on notice if the Trust and Power IV
obtained the right to designate a majority of the managers of Indeck Maine.

     The  Trust,  Power  IV and  Indeck  agreed,  effective  March 1,  1999,  to
terminate the arrangements  described above and to transfer operating control of
the  Projects  to the Trust and Power IV.  This has  occurred  and the Trust and
Power IV have engaged RPMCo to operate the two  Projects.  RPMCo is doing so 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
in  the  most   reliable  way  possible  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.

     Under current economic conditions,  the Maine Biomass Projects would not be
profitable  if they were  operated  as "base  load"  plants that run most of the
time. Instead,  they are 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 five to ten days'  advance  notice.  Because the
Projects are capable of providing  electricity,  they are entitled to sell their
"installed capability," a measurement of the rated ability of a generating plant
to create electric power. Plants are credited with installed  capability whether
or not they run. For an additional  discussion of installed capability and other
concepts related to electricity pricing, see (3) - Plant Operation,  below. Each
distribution  utility that is a member of NEPOOL 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 may auction it through  the ISO.  The Maine  Biomass  plants sold
installed  capability  throughout 1999 under short-term  bilateral contracts and
thus earned revenues  (approximately  $1.4 million) without generating  material
amounts of  electric  power.  Prices for  installed  capability  have  tended to
decline from the area of $1.50 to $1.75 per kilowatt per month in February  1999
to $1.25 to $1.75 per kilowatt per month in February  2000.  In April 2000,  the
ISO announced that it believed that unnamed  generators and market  participants
had engaged in short-term  manipulation of the installed  capability  market and
had caused  artificial  shortages of installed  capability in January 2000. This
was  despite  the  startup or  anticipated  startup of  several  new  generating
stations  in  New  England,   which  would  increase  the  supply  of  installed
capability.  Several  market  participants  have  called  for the  ending of the
installed capability market by June 2000, which would materially reduce revenues
to the Maine Biomass Projects.  The ISO has announced its intention to phase the
market out by the end of 2002.

     In addition,  the Maine Biomass Projects  operated on  apporximately  seven
days in June,  July,  October  and  December  1999 on  dispatch  by the ISO.  As
described below at Item 1(c)(3) - Plant  Operation,  the Projects claim that the
ISO owes them  approximately  $14  million  for the  electricity  products  they
provided on those days and the ISO has claimed that no material revenues are due
to the Projects. A description of these disputes is found below.

     The cost to the owners of Indeck Maine for  maintaining  the  facilities in
operable  condition  and  for  fixed  costs  such as  taxes  and  insurance  was
approximately $2.7 million for both projects in 1999.  Additional variable costs
were  incurred to run the Projects on the days they were  dispatched  by the ISO
and on days on which capability or air quality tests were run.

         Indeck Maine funded the approximately  $2.2 million  difference between
the Maine Biomass  projects'  revenues and operating  expenses by borrowing from
its members.  The Trust provided 25% of the loans  ($525,000 in 1998),  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 is building a waste tire and
rubber  processing  facility  (the "Santee River  Project")  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 Santee River Project is designed to receive and process waste tires
and other waste rubber  products and produce fine crumb rubber of various sizes.
The Project 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.  At
full  production,  the Project,  which is being  constructed on an approximately
30-acre site (the "Site") in Berkeley  County,  South  Carolina  owned by Santee
River,  will produce  approximately  100 million pounds per year of usable crumb
rubber. The Site is mortgaged as security for the bonds issued for the Project.

         The Santee River Project is being  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
is  responsible   for  assuring  that  the  Project  meets   specified   design,
construction and performance  criteria.  The Contractor's  obligations under the
construction contract are 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 Project operation.

         Initial  construction was  substantially  completed at the end of 1999.
Testing in January and February 2000 uncovered  material  design and performance
inadequacies  that  will  require  five to six  months  or  more  of  sequential
alterations and additional work to be paid for by the Contractor. The Project is
being operated at approximately 18% of capacity while work is being done so that
it can supply an existing tire  manufacturing  customer.  If the alterations are
completed  on  schedule  in  September  2000,  the  Project  will  then  undergo
performance  testing for  approximately  one month. If the tests are successful,
operation at full  capacity is expected to begin no earlier  than early  October
2000. If the tests are not successful or if additional deficiencies are found or
if the contractor takes longer to complete the planned series of  modifications,
operation would be further  delayed.  The Project's  financial plan assumed full
operation  by summer  2000 and if  operations  are  delayed  significantly,  the
Project could require additional cash.

         Until  January  2000,  Santee River paid the Trust and Power IV a fixed
distribution of 12% per year on $11,000,000 of the total they  contributed.  The
Trust and Power IV are entitled to a cumulative annual  distribution  preference
equal to 12% of contributed  capital from January 2000 until  operations  begin.
The Trust does not anticipate any payment of that  preference  until the Project
has significant cash flow from operations. After operations begin, the preferred
membership  interest  entitles  the Trust and Power IV to receive all  available
operating cash flow annually from Santee River after payment of debt service and
other  obligations  until they  receive a  cumulative  20% annual  return on its
capital  investment.  Thereafter,  the Trust and Power V are entitled to receive
25% of any remaining operating cash flow available for distribution in that year
from Santee  River.  All  non-operating  cash flow,  such as proceeds of capital
events,  is divided  equally between (a) the Trust and Power IV and (b)the other
owner of Santee River.  All amounts and tax items the Trust and Power IV receive
from Santee River are shared  two-thirds by the Trust and one-third by Power IV,
with neither having any preference  over the other.  The Trust and Power IV have
the joint right to designate  two of the five  managers of Santee River and have
the further  right to remove a third  manager and  designate a successor  in the
event of certain defaults under Santee River's Operating Agreement.

         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 contributed the
contracts,  permits, plans and other intangible property for the construction of
the Project that EPS generated prior to this transaction.  Until a default,  EPS
has the right to designate three managers of Santee River.

         Santee River estimates that approximately $52,680,000 will be needed to
construct the Project and begin operations.  After paying costs of the financing
(which included a $333,000  payment to the Trust and a $167,000 payment to Power
IV from Santee River to defray the trusts' transaction costs),  Santee River had
approximately  $16,500,000 available.  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. As
mentioned above,  $4,500,000 of the  Contractor's  price is deferred over a four
year period.

         Because  bringing the Project to full  operation  will be delayed,  EPS
informed the Managing  Shareholder  in late March 2000 the Project may run short
of working  capital  during the second  quarter of 2000.  This might result in a
shutdown of the Project and other material  adverse  consequences.  The Managing
Shareholder  and the Trust  refused to  contribute  additional  capital.  EPS is
attempting to provide additional capital or obtain additional  financing for the
Project; the Managing Shareholder has not approved any such plan.

         Santee River has entered into  long-term  agreements  for supply of its
requirements  of waste  tires and other  waste  rubber as its raw  material,  of
liquid  nitrogen  for  cryogenic  processing  and of  electricity  (from a local
electricity  cooperative).  Santee  River  intends  to  sell  the  crumb  rubber
manufactured at the Facility to various companies in the tire, plastics, rubber,
building products, adhesives and paint industries.

         EPS on behalf of Santee  River has  obtained  short term  crumb  rubber
sales  contracts for  approximately  30% of the Facility's  expected output with
several major rubber products manufacturers. Santee River is currently supplying
crumb rubber under one of these contracts to a tire manufacturer at about 18% of
the Project's anticipated capacity.  Each contract is contingent upon successful
testing of the Facility's output.

         EPS will  provide  administrative  services to Santee  River during the
construction  and  operation of the Facility at its cost  (including  direct and
indirect  costs  and  allocable  overhead).  Neither  Santee  River  nor  EPS is
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.

(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.  At December 31,
1999, the Trust's  equity in Quantum's  losses for 1999 was $346,000 and Quantum
had a negative net worth of over $4.7 million.

     In September  1998,  the Trust had  capitalized  a  subsidiary,  which lent
Quantum  $2,985,000 and purchased a 15% equity  interest in Quantum for $15,000.
The  subsidiary  had and  exercised  an option,  to invest an  additional  $1.99
million as a loan on the same terms and to  purchase  an  additional  10% equity
interest in Quantum for $10,000 in  connection  with the  additional  loan.  Two
venture capital funds organized and managed by Ridgewood  Capital LLC (Ridgewood
Capital Venture Partners, LLC and Ridgewood Institutional Venture Partners, LLC)
provided the capital for the  additional  $1.99 million loan and $10,000  equity
investment.  The two venture  capital funds  participated  in the  subsidiary in
proportion to the capital they  contributed on the same terms as the Trust.  The
Independent  Panel  Members  of the  Trust,  at  their  November  1998  meeting,
authorized a  co-investment  in Quantum with the two venture  capital funds.  In
July 1999,  the  subsidiary  purchased an additional  2% membership  interest in
Quantum for $100,000.

     The  Trust is  considering  various  means  to  realize  proceeds  from its
investment in Quantum.  These options  include,  but are not limited to, selling
all or a portion of its loans and equity interest to a possible buyer of Quantum
or recovering its investment through liquidation proceedings.

         Quantum  intends to produce  equipment  and  controls  for two  primary
markets: (i) package handling -- consisting of boxed or bagged packages that are
generally sized for finished goods in a manufacturing or distribution operation;
and (ii) small product  handling and sorting -- consisting of mail order,  video
and cassette distribution, bulk mailings, overnight mail, software and books.

         The  originators of the Quantum systems were Matthew  Mulhern,  Hans J.
Lem and Henry Pahl,  who had  organized a  corporation  named  Quantum  Conveyor
Systems,  Inc. ("Old Quantum") to develop and manufacture the systems. The Trust
organized  Quantum in August 1998. In early  September 1998, Old Quantum and its
shareholders contributed substantially all of Old Quantum's assets to Quantum in
exchange for a 37.2% equity interest in Quantum.  Mr. Lem, who owned certain key
patents and  intellectual  property,  was also issued a 37.2% equity interest in
exchange for those  patents and  intellectual  property.  In  addition,  Quantum
assumed Old Quantum's  indebtedness to Mr. Mulhern,  who received Quantum's note
for $3.75 million  secured by all of Quantum's  property.  Mr. Mulhern  received
$250,000 at the closing and Mr. Lem was given a $250,000 loan from Quantum.  Mr.
Mulhern and Mr. Lem also entered into three-year  executive employment contracts
with Quantum,  terminable for cause and renewable for up to two additional years
at Quantum's option.

     The existing loans are also secured by all of Quantum's  property and under
an intercreditor  arrangement with Mr. Mulhern, the subsidiary's note will share
pro rata with Mr. Mulhern's in any repayments or recoveries.

(v) MetaSound Systems, Inc.

         MetaSound Systems, Inc. is developing "digital audio marketing" systems
tied into 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 while they wait or to shoppers,  visitors and others in retail
stores and waiting areas.  MetaSound's  products feature 100% digital sound, the
ability to update and modify  messages either at the call site or from a central
broadcast  location  through the Internet or telephone  lines and the ability to
broadcast  content  from  many  sources  economically.  Other  features  include
superior  abilities for the customer to mix voice messages,  music and broadcast
content  and the  ability  of the  customer  to  manage  multiple  installations
world-wide from a single point.

         MetaSound is striving to offer a complete product by integrating  three
separate  elements:  content,   distribution  and  customer-level  hardware  and
software.  Currently,  most on-hold and similar  systems play  messages or music
from audiocassettes made or purchased by the customer. Updates require recording
a new cassette.  Some large media  companies  provide music and  information  by
telephone to the customer but do not provide  fully  variable  content.  Because
MetaSound's  systems can efficiently  rebroadcast  content  provided through the
Internet,   MetaSound  has  negotiated  a  non-exclusive  content  license  with
CNN-On-Hold  to provide  news to and through  MetaSound  systems.  MetaSound  is
exploring other similar  arrangements.  In addition,  MetaSound  itself provides
broadcast  application  services allowing  customers to create and produce their
own broadcasts and a library of music and sounds to support those broadcasts.

         MetaSound   has   also   signed    distribution    partnerships    with
telecommunications  companies,  hardware "original equipment  manufacturers" and
resellers such as GTE Network Services,  SBC  Communications  and Iwatsu.  These
will allow  Metasound to offer both  hardware  sales and support and  economical
distribution  of content to  customers.  Finally,  MetaSound  is  continuing  to
develop its hardware  and software to appeal to both small and large  businesses
and to give its customers  maximum ability to create custom messages.  MetaSound
is installing its systems at 700 Office Depot locations (with a 36 month service
contract) , Compaq Computer Corp. (250 units),  AT&T Corp. (50 units),  McKesson
Water  Products  Inc.  (50 units) and Aveda  Corp.  (180  units) and is actively
negotiating additional and repeat business.

         MetaSound believes that its competitive advantages are its high-quality
audio,  its ability to create alliances and partnerships to give its customers a
complete  solution,  and  its  ability  to  download   electronically   digital,
broadcast-quality,  real-time  messages to any telephone  system with  MetaSound
equipment.  MetaSound's  products have won the Call Center Solutions  magazine's
1998 "Editor's Choice Award," the 1998 and 1997 Teleconnect Magazine "Best of CT
Expo" awards, and the 1997 "Product of the Year" awards by Teleconnect  Magazine
and Computer Telephony Magazine.

         MetaSound  was  organized  in  September  1996 and has  developed  four
related  audio  broadcast  systems  for  customer  use as well as a package  for
customers to create messages and sound tracks.

         In December 1998,  Ridgewood Power  Corporation and the Manager created
Ridgewood  MetaSound,  LLC.  Ridgewood  MetaSound  received  initial  funding of
approximately  $2,500,000  from  the  Trust  At that  time  Ridgewood  MetaSound
acquired  approximately  4,676,000  shares of the Series C Preferred  Stock at a
price of $.54 per  share  (totalling  $2,525,000)  and  received  a  warrant  to
purchase up to 4,676,000 additional shares which was exercised at the same price
based on MetaSound's having met required sales and product development  targets.
Those  targets  included firm  contracts for or completed  sales of at least 800
systems,  many of which must be with large businesses,  execution of the license
agreement with CNN-On-Line at a fee not exceeding 30% of revenues, and execution
of at least two  remarketing  agreements.  An  additional  warrant for 2 million
shares of Series C Preferred  Stock was also granted to  Ridgewood  MetaSound at
the same  price,  expiring  in 2003.  Ridgewood  MetaSound  also has  received a
warrant to purchase  50,000 shares of  MetaSound's  Series B Preferred  Stock at
$.52 per share in connection  with temporary  financing that was rolled into the
purchase of the Series C Preferred Stock. The Preferred Stock owned by Ridgewood
MetaSound, if converted, would be equivalent to 42% of the total common stock of
Metasound.

         The $2,525,000 funding for Ridgewood  MetaSound's  anticipated May 1999
exercise  of the  4,676,000  share  warrant  was  provided  by the  first set of
Ridgewood  Capital  Venture  Funds,  through an  investment by them in Ridgewood
MetaSound.  The Trust and the venture capital fund group own undivided interests
in Ridgewood Metasound in proportion to the capital they contribute and none has
preferences over another.

         After the December  1998  transactions,  MetaSound  has three series of
preferred stock (A, B and C), all of which particpate pro rata and none of which
has a preference over the others,  although all preferred stock is senior to the
Common  Stock.  The Series C Preferred  Stock has an annual  dividend  amount of
$.00432  per  share  and a  liquidation  amount  of $.54 per  share.  There  are
approximately  320,000  shares of Series A  Preferred  Stock  having an  annual,
non-cumulative  preferred  dividend  of $.08 per share and  4,751,000  currently
outstanding  shares of Series B Preferred  Stock with an annual,  non-cumulative
preferred dividend of $.0416 per share. In the event of liquidation,  each share
of preferred stock is entitled to receive  declared but unpaid dividends plus $1
per share (Series A), $.52 per share (Series B) and $.54 per share (Series C). A
merger of MetaSound that does not give the holders of all of MetaSound's stock a
majority of the voting power of the successor company, or a sale of substanially
all  of  its  assets,   will  trigger  the  liquidation  rights.  The  preferred
liquidation  amounts are senior to the Common Stock but if the available  assets
are  insufficient  to fund all  preferred  liquidation  amounts,  the  preferred
stockholders  of all classes share pro rata with no class having any  preference
over another.

         Each share of the Series B and C Preferred  Stock is  convertible  into
one share of Common  Stock and each  share of the  Series A  Preferred  Stock is
convertible  into four shares of Common  Stock.  Conversion  is automatic if the
Company closes an underwritten public offering of Common Stock for at least $7.5
million  or if 2/3  of  the  preferred  stock,  voting  as a  single  class,  so
determines.   All  classes  of  preferred  stock  have  customary  anti-dilution
protections  except that no protection  is given for exercise of employee  stock
options or benefits  (but no more than  3,500,000  shares may be issued for that
purpose).  The consent of a majority of the holders of all classes of  preferred
stock,  voting  together as a single  class,  is needed for any amendment to the
terms of any class of  preferred  stock,  the  creation  of stock  senior to the
preferred stock, or other actions materially and adversely affecting the holders
of preferred stock. For that reason, if the warrant expiring May 31, 1999 is not
exercised,  holders  of  classes  of  preferred  stock  other  than the Series C
Preferred  Stock may be able to  adversely  change the terms or  position of the
Series C  Preferred  Stock.  So long as there are at least 4  million  shares of
Series C Preferred Stock outstanding,  (a) the holders of the Series C Preferred
Stock are entitled to elect two directors,  if the number of directors is six or
fewer, (b) they may elect three directors, if there are seven or eight directors
in total,  (c) they may elect four  directors,  if there are nine  directors  in
total and (d) the number of directors cannot be changed without the consent of a
majority of the holders of the Series C  Preferred  Stock,  voting as a separate
class.  The  holders  of the  Series A and  Series  B  Preferred  Stock,  voting
together,  have the right to elect the  remaining  directors.  Each share of the
preferred  stock  otherwise  has the same voting power as attaches to the Common
Stock  into which it can be  converted,  and is voted  together  with the Common
Stock as a single voting class.

         Ridgewood  MetaSound also received  registration  rights for the Common
Stock into which its preferred  stock can be converted,  subject to the right of
an  underwriter  of Metasound to require a 180 "lock-up" if the shares are to be
sold in an initial public  offering of Metasound,  the right to receive  certain
financial  information  and limited first refusal  rights with regard to certain
non-public and small public offerings of securities by MetaSound.

     Condensed  financial  information  for  MetaSound  is found in the notes to
financial  statements.  Audited financial  statements for MetaSound for the year
ended March 31, 2000 will be included in an amended Form 10-K.

(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 has leased  manufacturing space in Oak Harbor, Ohio and has begun
initial  construction  of prototype  water  purification  units.  Completion  of
prototypes  and testing was completed in early 2000. The Trust intends to expand
into commercial  production during 2000. During 1999,  Waterpure  incurred a net
loss, financed by the Trust, of $1,247,000.

(vii)  United Kingdom Landfill Projects

         The Trust and the Growth Fund are participating through a joint venture
in the United  Kingdom  Landfill  Projects,  which include owning five completed
landfill gas electric generation plants in Great Britain and developing up to 20
additional sites.

         The  estimated  cost of the  package  of  completed  plants  and the 20
developmental  sites, if all the  developmental  plants are built, is $36 to $38
million.  The Trust  supplied  the first $16 million of the  purchase  price and
developmental  equity  and the Growth  Fund will  supply  the  remainder  of the
developmental  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.  Ridgewood  Power V and the Growth Fund have  organized
Ridgewood U.K. Limited,  an English limited company ("Ridgewood U.K.") to act as
a holding company for the British projects.

The following five plants are currently in operation:

Project           Location           Current Price per     Installed capacity
                                          kWh (US$)

Chelson Meadow   Devon, England           4.57            2.85 megawatts
United Mines .   Cornwall, England        5.26            2.85 megawatts
Whinney Hill .   Lancashire, England      5.28            3.10 megawatts
Bellhouse ....   Essex, England           5.28            2.85 megawatts
Summerston ...   Glasgow, Scotland        5.26            2.85 megawatts

Total capacity                                            14.5 megawatts

         Each British plant has a 15-year long term power purchase contract with
the Non-Fossil  Purchasing Agency Limited, a  quasi-autonomous  non-governmental
organization that purchases  electricity generated by renewable sources (such as
landfill gas power  plants) on behalf of all English  utilities in order to meet
British  environmental  protection  goals.  The  Summerston  plant has a similar
15-year contract under the Scottish Renewables Order with Scottish utilties. The
electricity  prices  will  be  increased  annually  by a  factor  equal  to  any
percentage increase in the U.K. Retail Price Index.

         The five  projects  named above  (which  include  both the  electricity
generating plants and the gas collection and cleaning systems) have been or will
be financed with a total of $16.6 million of long-term bank debt, in addition to
the equity interest  purchased by the Trust. The loans are non-recourse  against
Ridgewood U.K., the Trust, the Growth Fund and their intermediate  subsidiaries.
The Trust and the  Growth  Fund have also  organized  Ridgewood  CLP  Management
Limited,  an English  company ("RW  Management"),  which will be responsible for
operating  the five plants and any  additional  plants that are  developed.  The
principal  stockholders of CLPS will own non-voting  stock in RW Management.  RW
Management  will  manage the plants at cost and will not be intended to earn any
profit.   CLP  Services  Limited,  a  new  company  ("CLPS")  organized  by  the
stockholders of CLP, will provide  day-to-day  services under  subcontract to RW
Management.  CLPS  will  be  paid a flat  fee of  approximately  1.2  cents  per
kilowatt-hour  for those  services  (adjusted  for increases in the Retail Price
Index) and will be eligible  for bonus  payments if a  project's  actual  annual
electricity output exceeds 90% of its capacity. CLPS will also pay 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. RW Management may terminate the  subcontract  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.

         CLPS will proceed to develop as many of the 20  remaining  sites as may
be feasible and will bear the developmental  costs itself.  Its principal source
of  funds  for  doing  so  will  be  approximately  4  million  pounds  sterling
contributed by its  stockholders  from the purchase price paid by Ridgewood U.K.
for the five plants  described  above.  As each remaining plant is completed and
commissioned, Ridgewood U.K expects that the bank will provide long-term finance
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,
Ridgewood  U.K. will have the option to buy the equity  interest from CLPS.  The
Trust has  provided  the  first $3  million  of the  additional  equity  capital
necessary  for  Ridgewood  U.K to buy the  plants.  That $3 million  was used to
develop  two  additional  projects.  If  additional  projects  are  successfully
completed,  the  additional  money will be provided  by the Growth Fund  through
contributions  of capital to Ridgewood  U.K. By doing that, the Growth Fund will
obtain an economic interest in each of Ridgewood U.K.'s plants  proportionate to
the share of Ridgewood U.K.'s total capital that it contributes.  Ridgewood U.K.
expects to contract with RW Management  to operate the  additional  plants using
CLPS on terms similar to those for the five existing plants.

         The  purchase  price  for  the  first  five  plants,  9,426,000  pounds
sterling, was determined by arms-length bargaining and was paid from proceeds of
the Trust's prior private placement offering.  The price reflected the estimated
value of the cash flow from the five plants,  assuming  production meets the 90%
standard,  plus  estimated  adjustments  for  the  current  assets  acquired  by
Ridgewood  U.K,  interest  at 5.25% per year on those  amounts  from an  assumed
purchase date of April 1, 1999, and retention  amounts held against  amounts due
for completion of the Chelson Meadow and Summerston  plants.  The purchase price
was adjusted to reflect actual results for the April - June 1999 period.

         For the last six  months of 1999,  the  Trust's  equity  in the  United
Kingdom Landfill Projects' income totalled $180,000

     The Trust funded its  investment  in Ridgewood  U.K.  from  proceeds of its
completed offering of Investor Shares.

(viii)   Egyptian Projects

     In late  1998,  the  Managing  Shareholder  organized  the  predecessor  of
Ridgewood International  Development LLC ("RIDCo") to be a project developer for
the Trust and the Growth  Fund.  RIDCo is owned by Robert E.  Swanson and family
trust of Mr.  Swanson's and he is the sole manager of RIDCo.  Like RPMCo,  RIDCo
acts on behalf of the Trust,  hires personnel for Projects and is reimbursed for
its costs and allocable  overhead.  The President and chief operating officer of
RIDCo,  beginning in January 1999, is Donald Stewart,  who from May 1994 through
December 1998 acted as an  acquisition  consultant to the Managing  Shareholder.
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
based on Project cost.

         Mr.  Stewart  has 25 years of  experience  in the field of  independent
power  generation  and  finance.  Mr.  Stewart  spent the first ten years of his
business   career  as  a  Certified   Public   Accountant  with  KPMG,  a  major
international  accounting  firm.  He also  served as  Chairman  of  Vermont  Gas
Systems,  a  regulated  public  utility;  Vice-Chairman  of  Consolidated  Power
Company,  a developer  of large scale  co-generation  projects;  and Chairman of
Hercules  Engines,  Inc., a  manufacturer  of industrial  engines and electrical
generation equipment.

     Mr. Stewart holds a Bachelor of Science  degree in Engineering  from Lehigh
University and is a Certified Public Accountant.

         In the third quarter of 1999 the Trust and the Growth Fund organized an
Egyptian  development company and have loaned approximately $10.6 million to the
company,  secured by the  company's  stock.  The Trust and the Growth  Fund have
supplied this capital and as soon as  governmental  formalities  are  completed,
they will exchange the loans for all of the equity in the development company.

     The  capital  has been used to  purchase  an  existing  electric  and water
distillation plant and to expand it at the Le Meridien Hotel in Hurghada, Egypt.
Hurghada is a developing  tourist  resort on the western shore of the Red Sea in
southeastern Egypt distant from most population centers.  RIDCo has entered into
an agreement with the hotel to provide an  electricity  and  desalination  plant
with a capacity of 5 megawatts and 142,000 gallons of fresh water per day and to
operate  the plant for 40 years.  The hotel pays for  electricity  at a variable
rate tied to fuel costs and pays for distilled  water at a flat rate per gallon,
escalated  annually.  Total  investment in the plant,  which began  operation in
March 2000, is approximately $8.25 million.

         RIDCo  is  also  developing  five  additional  Projects  or  groups  of
Projects.  One  Project  is being  constructed  to  supply  electricity  only (8
megawatts capacity) at the El Malha Touristic Association, a group of hotels and
developers  building  a resort  community  approximately  50 miles  south of the
Egyptian-Israeli  border on the Gulf of Aqaba.  Estimated cost is $6 million and
operations  are scheduled to begin in April 2000. A second project is located at
the tip of the Sinai Peninsula at  Sharm-el-Sheikh,  for desalinating  water for
three hotels.  Its estimated cost is $3.2 million and estimated capacity will be
3 million gallons per day. These projects are expected to be in operation by the
end of 2000.

         A third  group of  Projects  will  also be  located  at  Hurghada.  Two
generating stations will provide 5.8 megawatts of electricity to two hotels, and
a series of  desalination  facilities will provide up to 3.4 million gallons per
day of water to those two hotels and three others.  Estimated  cost will be $8.5
million and completion is expected in 2000.

         The remaining two projects are to be located at Ras Sidr and Marsa Alam
on the western  shore of the Red Sea. The Ras Sidr  project is for  desalinating
water only while the Marsa Alam project will provide both water and electricity.
Estimated  costs are $2.9 million and $3 million,  respectively.  These Projects
are  in  due  diligence  and  it is  uncertain  whether  they  will  proceed  to
completion.  The  additional  $23.6  million  of  capital  needed to fund  these
commitments  will be provided by the Trust and the Growth Fund. The El Malha and
Sharm-el-Sheikh  projects are supported by contracts with associations of resort
hotels  organized under Egyptian law to develop new resort sites. The members of
each  association  are jointly  responsible for the  association's  obligations,
which  include  amounts  owed to the projects for  electricity  and water.  Each
contract with the  associations is for 10 years on terms similar to those of the
Le Meridien Hotel project.

         The Trust's equity in the net losses of the Egyptian  Projects for 1999
was $198,000.

    (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 is
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.  Ridgewood MedFiber or its designees have first refusal rights to invest in
future telecommunications facilities developed by GFG. GFG's original management
was comprised of former executives of AT&T Corp.'s underwater cable division.

         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 informally agreed with the managers to provide some
compensation for their interest, contingent upon completion of financing for the
Project. Ridgewood MedFiber has searched for other equity investors to allow the
Project to proceed, but to date has been unsuccessful. There is a high risk that
it will be unable  to find  additional  equity  investors  and that the  Project
therefore  will not be  developed,  in which  case the Fund will lose its entire
investment.

         GFG had entered into an agreement with Alcatel Submarine Networks, SARL
("ASN"),  a  subsidiary  of Alcatel  SA, a major  European  telephone  equipment
manufacturer.  Each of GFG and ASN owns one-half of a joint venture to construct
the  Project.   The  joint  venture  was  organized  to  enter  into  a  turnkey
construction contract with ASN and to have ASN operate and market the Project.

         The estimated cost of the Project is  approximately  $500 million.  The
joint  venture  had  obtained a  commitment  from a major  European  bank and an
investment bank to sell a  approximately  $350 million of senior secured debt in
the  Project.   The  remaining   $150  million  was  to  be  equity   financing.
Approximately  60% of that  equity  financing  would be  provided as a preferred
("mezzanine")  equity  interest in the joint  venture and the remaining 40% ($60
million) would be provided by GFG and ASN as common equity.  Each of GFG and ASN
would also receive an  unspecified  amount of common equity in the joint venture
as developers' compensation.

         The Trust and the Growth Fund had  tentatively  budgeted an  additional
investment  of $18  million  through  Ridgewood  MedFiber in the Project for the
second  quarter of 2000.  That would be used to provide  part of the $30 million
common equity investment by GFG. The Managing Shareholder expects that decisions
about  financing and whether to proceed with the Project will be made by the end
of April  2000.  Intensive  negotiations  are in  progress  with  regard  to the
financing and operation of the Project and there may be material  changes to the
arrangements described here.

         There  are  no  current  commitments  or  agreements  to  purchase  the
communications  capacity or  facilities  that the  Project  would  provide.  The
Project would be developed to meet the anticipated  demand for high-speed global
communications  links,  but there is no assurance  that there will be sufficient
demand to make it  profitable,  that other  cables,  wireless  links,  satellite
communications   or  landlines  will  not  be  developed  under  more  favorable
conditions  or that the  developers  and  investors  of this  Project  will have
sufficient  resources  to  complete  it if there  are cost  overruns,  delays or
unanticipated events. The Project is thus highly speculative.

  (x)  Proposed Investments.

         The Trust and the Growth Fund are in  negotiations  with Synergics Inc.
of Annapolis, Maryland for the purchase of nine small, operating,  hydroelectric
Projects  (and a minority  interest in a tenth)  located in  California,  Maine,
Nevada,  New  York,  Rhode  Island  and  Virginia.  The  Projects  have a  total
generating  capacity of 21 megawatts  and each is a Qualifying  Facility  with a
long-term Power Contract.  The proposed purchase price is $30 million. The Trust
and the Growth Fund would each provide $10 million and the remaining $10 million
would be obtained from a long-term  loan from their  principal  bank.  The Trust
expects that a final decision on purchasing the Projects will be made by the end
of April 2000.

     If  investments  in any  of  these  Projects  do not  occur,  the  Managing
Shareholder is considering  additional  developments  of landfill gas generating
plants in Europe,  expansion  of the  Egyptian  projects  or other Near  Eastern
projects.

         The Trust is  actively  seeking  additional  Projects  for  investment,
either by itself or in conjunction with other programs sponsored by the Managing
Shareholder if such programs are authorized to do so.

     If the Trust and another  program with similar  investment  objectives have
funds available at the same time for investment in the same or similar Projects,
and a  conflict  of  interest  thus  arises  as to which  program  will make the
investment,  the Managing  Shareholder  will review the investment  portfolio of
each program. It will make the investment decision on the basis of such factors,
among others,  as the effects of the investment on the  diversification  of each
program's portfolio,  potential alternative investments,  the effects investment
by either program would have on the program's risk-return profile, the estimated
tax effects of the investment on each program, the amount of funds available and
the length of time those funds have been available for investment.  If more than
one program has funds  available for investment and the factors  discussed above
and other  considerations  indicate  that the  Project has  approximately  equal
benefit for each program,  the Managing  Shareholder will generally allocate the
opportunity  to each program in order of its  organization  date. In that event,
the  Managing  Shareholder  will cause the  oldest  program to commit all of its
reasonably available funds to that opportunity; if those funds are insufficient,
the remainder of the opportunity will be offered to each successive program with
reasonably  available  funds until the investment  opportunity  is exhausted.  A
similar process would be followed for divestiture  opportunities  or competitive
electricity sales.

     An additional  conflict could arise where the entities make  investments in
different forms, which would be the case where one entity's  investment took the
form of equity and the other's  took the form of debt.  Although it  anticipates
that  this  situation  is  unlikely  to  arise,  the  Managing  Shareholder,  if
practicable,  would attempt to resolve any conflict of this type by reference to
the terms  negotiated  by other  debt or  equity  participants  in the  relevant
Project or similar Projects.  Although the Managing  Shareholder  believes these
practices may reduce potential  conflicts of interest of this type, there can be
no assurance that the interests of the entities will not diverge.

(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  in the  range of 30% over or 25%  below  the  average  output  from 1987
through 1997.  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 wood waste,  including brush and chips
from woodcutting or 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 output on the
market. In 1999, NEPOOL instituted a somewhat competitive market, managed by the
ISO, for  generators to sell capacity and output to utilities and other entities
that distribute electricity ("loads").  Generators may sell directly to loads 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 (monthly for
installed  capability),  bills loads for their  shares of the products and is to
pay generators in accordance with the  generators'  offers and the market rules.
In 1999, seven  "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  electrical
products for the summer of 1999 at relatively  high prices with the  expectation
that the plants would  called upon by 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.  ISO dispatched the plants to
run on only three days during June 1999 when NEPOOL was short of  resources  and
accepted the Projects' offered prices, which would have entitled the Projects to
receive significant revenue for those three days.

     In early July 1999,  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 ISO's
actions during June, RPMCo concluded that 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,
RPMCo  revised its offer  strategy to hold the Maine  Biomass  Projects  off the
market for the remainder of the summer and made further  revisions at the end of
September.

     In early October  1999,  ISO informed  RPMCo 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
an high price,  reflecting the costs of restarting the plants,  obtaining a crew
on short notice and covering fixed costs.  ISO accepted the offer subject to its
market rules and conditions.  The Maine Biomass Plants operated as dispatched by
ISO on October 16 and, if they were paid in  accordance  with their offer terms,
would have received between $2.2 million and $5.4 million. In November 1999, ISO
advised  RPMCo that it would pay a total of $5,000  for the energy the  Projects
produced on October 16. 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.

     RPMCo is  vigorously  disputing  all  elements of the ISO's  arguments  for
reducing the June and October  payments and is preparing to bring a legal action
in the appropriate forum.

         The Maine Biomass Projects ran on seven other days during 1999 in order
to undergo NEPOOL  capacity  testing,  testing for air pollution  control permit
requirements or modifications, and to meet ISO dispatch orders on three of those
days.  On each of the days ISO cancelled the orders just before the plants would
have begun providing synchronized electricity to NEPOOL. As a result, the plants
had to be crewed  and  restarted  but no  revenues  were  earned.  RPMCo is also
disputing these actions by the ISO.

         Electricity  produced  by a  Project  is  typically  delivered  to  the
purchaser  through  transmission  lines which are built to interconnect with the
utility's existing power grid, or in the case of the Maine Biomass Projects, via
utility lines owned by Bangor  Hydro-Electric  Company  ("Bangor  Hydro") to the
ISO's transmission  facilities.  Bangor Hydro's tariffs for transmission and for
electricity  demand (incurred by the need for start-up  electricity at the Maine
Biomass Projects) imposed a significant burden on their potential profitability.
After extended  investigation,  the Managing  Shareholder and Indeck Operations,
Inc.  concluded  that the Projects were eligible  under  regulations  of the New
England Power Pool and ISO-New England to be considered as directly connected to
the ISO's  "pooled  transmission  facilities."  That status would  significantly
reduce  transmission  charges for the Projects.  Indeck Maine petitioned the New
England  Power Pool and  ISO-New  England to  recognize  the  Projects  as being
connected  to pooled  transmission  facilities  and when  those  petitions  were
disapproved,  brought  administrative  complaints  in  October  1998  before the
Federal  Energy  Regulatory  Commission  ("FERC")  alleging that the failures to
recognize  the  Projects  were  anti-competitive,  in  violation of system rules
approved by FERC  actions and in violation of FERC  deregulatory  orders.  Those
complaints  were  rejected  by FERC in  February  2000 and RPMCo is  considering
whether further proceedings with other similarly situated NEPOOL members will be
appropriate.  Indeck  Maine has  negotiated a package of tariff  amendments  and
special  facilities  agreements  with Bangor Hydro that would remove most of the
tariff  disadvantages.  Bangor  Hydro filed a request for approval of the tariff
changes with FERC in March 2000.  The special  facilities  agreements  will also
require approval by the Maine Public Utility Commission.

     The overall demand for electrical energy is somewhat seasonal,  with demand
usually  peaking  in the  summertime  as a result  of the  increased  use of air
conditioning.  As described  above,  peak periods in New England  generally  are
limited to daytime and evening  hours in the summer  months (with a smaller peak
in Maine for  light  and  heating  during  the  winter)  and  power  prices  are
significantly higher during those periods.

         The Santee River Project is under  construction.  When  completed,  the
primary raw materials for the Santee River Project will be used tires, which are
readily  available,   electricity  (purchased  from  the  local  rural  electric
cooperative) and liquid nitrogen for freezing the tires (which is available,  as
described above,  under a long-term  contract from a producer of liquid oxygen).
Accordingly, the Santee River Project is not currently expected to be subject to
unexpected, adverse raw material price changes or supply interruptions.

         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.

     Customers of Projects that  accounted for more than 10% of annual  revenues
from operating sources to the Trust in each of the last three fiscal years are:

                                    Calendar year
                               1999           1998          1997

Central Maine Power Company     n/m (1)        52%          80%
 (Maine Hydro Projects)
Bangor Hydro-electric Co.       n/m (1)        13%          20%
(Maine Hydro Projects)

Non-Fossil Purchasing Agency    n/m (1)       ---           ---
 Ltd. (U.K. Landfill Projects)


(1) Not meaningful. The Maine Hydro Projects earned $849,000 of revenues, net to
the Trust's  interest,  in 1999 and the U.K Landfill Projects earned $486,000 of
revenues,  net to the  Trust's  interest,  to the agency.  However,  total Trust
operating revenues, on an equity basis, were only $85,000.

     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

         There are numerous  references for further  information on the electric
power industry.  Interested  persons may particularly  wish to refer to the U.S.
Department of Energy's Annual Energy Outlooks and special  studies,  prepared by
the department's  Energy Information  Administration  (the "EIA").  Much of this
information is available on EIA's World Wide Web site at  http://www.eia.doe.gov
under the "Electric"  heading.  Neither the Department of Energy nor EIA nor any
other agency of the United States  Government has endorsed or approved the Trust
or the Investor Shares and the Trust takes no responsibility for the preparation
or content of the Department of Energy's publications.

         (i)  Qualifying Facilities with long-term Power Contracts

         The Trust is somewhat insulated from recent  deregulatory trends in the
electric  industry  because the Maine Hydro Projects are  Qualifying  Facilities
with long-term formula- price Power Contracts.  Each Power Contract now provides
for rates in excess of current  short-term rates for purchased power.  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.   Further,   there  are   federal
constitutional provisions restricting actions to impair existing contracts.

     To date, the Federal  Energy  Regulatory  Commission and state  authorities
have  ruled  that  existing  Power  Contracts  will  not be  affected  by  their
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.  The  utilities are to be
allowed to recover  those costs  during a transition  period.  This is typically
done by  imposing a  transition  fee or  surcharge  on rates that is paid to the
utility.

     No material  action has yet been taken by federal or state  legislators  to
date to impair independent power projects' existing power sales contracts,  and.
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 have  required  utilities to police  independent  power
projects' compliance with those Power Contracts (and in California,  fuel supply
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 2017 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.  The Maine Hydro Projects may have  diseconomies  of
small scale and, because they are run-of-river  projects,  they cannot commit to
producing  fixed amounts of  electricity on schedule.  This might  significantly
restrict  demand for their output  after their Power  Contracts  terminate.  The
Trust is unable to anticipate  whether the Maine Hydro  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.

         (ii)  Maine Biomass Projects and "Merchant Power Plants"

         The Maine Biomass  Projects do not have long-term  Power  Contracts and
are exposed to the newly-deregulating  market for electricity generation.  Those
Projects and other similar plants  without  long-term  Power  Contracts that the
Trust may acquire are sometimes  described as "merchant  power  plants"  because
they sell their output on the open market. As a consequence of federal and state
moves  to  deregulate  large  areas  of the  electric  power  industry  and  the
existence, spurred by PURPA, of private competitors to electric utilities in the
market for generating electricity, a number of interrelated trends are occurring
that will affect merchant power plants.

Continued Deregulation of the Generating Market

         The  Comprehensive  Energy  Policy Act of 1992 (the "1992  Energy Act")
encourages  electric utilities to expand their wholesale  generating capacity by
removing  some,  but not  all,  of the  limitations  on their  ownership  of new
generating  facilities that qualify as "exempt wholesale  generators"  ("EWG's")
and on their  ability  to  participate  in  merchant  power  plants.  Many state
electric  utility   regulators  are  considering   plans  to  further  encourage
investment in wholesale  generators and to facilitate  utility decisions to spin
off  or  divest  generating  capacity  from  the  transmission  or  distribution
businesses of the  utilities.  As a result,  merchant power plants in the future
will face  competition not only from other  independent  power plants seeking to
sell  electricity on a wholesale basis but also from EWG's,  electric  utilities
with excess capacity and independent  generators spun off or otherwise separated
from their parent utilities.

Wholesale-level Access to Transmission Capacity

         The 1992 Energy Act empowered  FERC to require  electric  utilities and
power pools to transmit  electric power generated by other wholesale  generators
to wholesale  customers.  This process is referred to as "wheeling" the electric
power.  Essentially,  the generator contributes power to a utility or power pool
and is credited  with that  contribution,  and the utility or power pool serving
the wholesale  customer  makes  available  that amount of electric  power to the
customer and debits the generator. Wheeling is effected between power pools on a
similar basis.

         Without access to transmission  capacity, an independent power plant or
other  wholesale  generator can only sell to the local electric  utility or to a
facility  on  which  it is  located  (or,  in some  states,  which  adjoins  its
location).  FERC has required  that  transmission  capacity  owners or the power
pools that  operate  transmission  facilities  (such as NEPOOL  through the ISO)
provide  transmission  capacity  to all  generators  and  power  marketers  on a
non-discriminatory  basis pursuant to "open-access"  tariffs. FERC in its recent
Order 2000 has mandated  improvements  to the power pool systems.  When combined
with the increased  competition in the generating area, this is likely to create
an  electricity  supply  market that may  profoundly  change the  operations  of
electric utilities, consumers and independent power plants.

         On April 24,  1996 the Federal  Energy  Regulatory  Commission  adopted
Order  888,  which  requires  electric  utilities  and  power  pools to  provide
wholesale transmission  facilities and information to all power producers on the
same terms,  and endorses the recovery by utilities of uneconomic  capital costs
from  wholesale  customers who change  suppliers.  The  utilities  would also be
required to furnish ancillary services,  such as scheduling,  load dispatch, and
system protection,  as needed. These rights,  however, would apply only to sales
of new  electric  power over and above  existing  utility  supply  arrangements.
Non-utility  wholesale  deliveries  of  electricity  have grown  vigorously  and
according to the federal  government grew at the rate of 21% per year in the ten
years from 1986 to 1996.

         The Maine Biomass  Projects are dependent on wheeling power in order to
sell  their  capacity  or energy to  purchasers  other  than  Bangor  Hydro,  as
described  above.  Order 888 takes no action to modify existing Power Contracts.
The  order  intends  to create a  competitive  national  market  in  electricity
generation and thus may create additional pressure on electric utilities to seek
changes to long-term power purchase contracts, as described further below. State
public utility regulatory  agencies must also review and approve certain aspects
of  wholesale  power  deregulation,  and those  agencies are  currently  holding
proceedings  and making  determinations.  In addition to the FERC order or other
Congressional  or  regulatory  actions  that  may  result  in  freer  access  to
transmission  capacity,  agreements  with  Canada,  and to a lesser  extent with
Mexico,  are  leading  toward  access for those  countries'  generators  to U.S.
markets.  In particular,  certain Canadian  suppliers,  such as HydroQuebec (the
Quebec  provincial   utility)  are  already  offering   substantial  amounts  of
electricity in New England,  and more may be offered if sufficient  transmission
capacity can be approved and built.  These  agreements may also afford access to
those  countries'  markets in the  future for  independent  power  plants.  As a
result,  there is the possibility  that a North American  wholesale  market will
develop  for  electricity,   with  additional   competitive  pressures  on  U.S.
generators.

Retail-level Competition

         An even more  radical  prospect  for the  electric  power  industry  is
retail-level competition,  in which generators would be allowed to sell directly
to  customers by using (and paying a fee for) the local  utility's  distribution
facilities.  Retail-level  competition presupposes the ability to wheel power in
the  appropriate  amounts at economic costs from the  generating  Project to the
electric  utility  whose wires link to the retail  customer  (typically  a large
industrial,  commercial or  governmental  unit) and the ability to use the local
utility's facilities to deliver the electricity to the customer.  In addition to
the business and regulatory issues arising from wholesale wheeling, retail-level
competition  raises  fundamental  concerns  as to the  ability of  utilities  to
recover  stranded  costs  at  the  generating  and  distribution   levels,   the
possibility  that smaller  customers  will have less  ability to demand  pricing
concessions,  incentives for governmental  agencies to act as intermediaries for
consumers  and  the   functions  of   state-level   regulatory   agencies  in  a
price-competitive  environment  which may be inconsistent with their traditional
price-setting   and   service-prescribing   roles.   Maine,   Massachusetts  and
Connecticut are implementing  retail competition in April 2000; Rhode Island has
already done so.

         Although  retail  deregulation  is  being  implemented  currently  on a
state-by-state  basis,  there are some common  elements which are expected to be
included  in  the  Maine  and  Massachusetts  deregulation  plans.  First,  most
deregulating  states will require that local utilities will be the "suppliers of
last  resort,"  which are  required  to serve any  customers  in their  existing
territories who do not purchase  generated  electricity  from another source and
which are required to obtain adequate  generating  capacity to meet those needs.
Second,  most  deregulating  states  are  requiring  that  utilities  and  other
suppliers of electricity work through "independent system operators" such as the
ISO, which coordinate  purchase,  transmission  and sale of electricity  between
generators and distribution  utilities.  Independent  system operators will have
significant responsibility for supply reliability.

         Third,  most  deregulating  states  are  requiring  that  utilities  be
compensated  for stranded costs (which include  long-term  Power  Contracts with
Independent Power Projects that are above current and anticipated market prices)
for a transition period.  This is typically done by imposing a transition fee or
surcharge on rates that is paid to the utility.  In some states,  utilities  are
being  encouraged or ordered to issue bonds or other  financial  instruments  to
retire  stranded  cost assets or  contracts,  supported by  transition  charges.
Fourth,  many states are requiring  local utilities to divest a large portion or
all of their  generating  assets or to sell their rights under  long-term  Power
Contracts.  The states have cited concerns such as the anti-competitive  effects
of allowing  the  utilities,  which  retain a monopoly  over the wires that take
electricity the last stages to the customer, to own generating assets.  Further,
the sale of assets (or  above-market  Power  Contracts)  sets a market price for
those assets and allows a somewhat  objective  computation of the stranded costs
related to those assets or contracts.  For example,  the true stranded cost of a
nuclear plant is approximately  the difference  between the value assigned to it
under state regulation and the price someone will pay for it at auction.

         Fifth,  utilities  having stranded costs are expected to mitigate those
costs by buying out contracts or selling costly assets. Finally, many states are
attempting  to  protect  generators  who  use  "renewable  fuels"  or  that  are
considered to have  environmental or social benefits.  As discussed below, Maine
and Massachusetts are doing so.

Price and Cost Pressures

         The  pricing  pressures  that  retail and  wholesale  deregulation  are
bringing are expected to decrease the marginal cost of electricity.  Competition
will force utilities and generators to reduce overhead and administrative costs,
to trim  operation and  maintenance  costs and to more  efficiently  buy and use
fuel. Further, wholesale and retail deregulation and new generating technologies
discussed below are expected to significantly reduce capital costs. For example,
electric utilities  currently  maintain large amounts of generating  capacity in
reserve to meet peak loads (for example,  to serve customers  during a heat wave
in July).  According to the federal government,  competition may lead to pricing
strategies that reduce these peak loads. Competition may also force utilities to
stop  maintaining  high-cost  reserve  capacity and to take greater  risks.  The
widening  wholesale  market for electricity may increase  efficiency by allowing
utilities and power consumers to obtain distant, lower-cost capacity for reserve
purposes  rather  than  maintain  local,  higher  cost,   underutilized  reserve
capacity. Finally, political and economic pressures may induce market regulators
such as the ISO to manipulate prices downward.  For these and other reasons, the
federal government  currently  estimates that national average electricity rates
in real  terms  (adjusted  for  inflation)  will  decline to about 6.3 cents per
kilowatt-hour   in  2015  from  the  1996   average   level  of  7.1  cents  per
kilowatt-hour.

         As these trends  continue,  high-cost  generators will be disadvantaged
and may fail.  The  Trust's  small-scale  generating  plants have tended to have
higher  per-kilowatt  hour  costs  (except  for  fuel)  than  new,  large  scale
generating  plants.  The  fuel  cost  advantages,   if  any,  of  landfill  gas,
hydroelectricity  or waste biomass are thus critical to the  competitiveness  of
the Trust's  merchant  power plants.  To date,  the cost of wood chips and other
biomass  suitable  for use at the Maine  Biomass  Projects  is not low enough to
allow the Projects to compete for base load contracts.

         Conversely,  decreases in  electricity  costs may reduce Santee River's
production costs, although Santee River's business plan does not assume any such
decreases.

New Generating Technologies and New Industry Participants

         Recent improvements in turbine technology, coupled with what is seen as
the ample supply and relative  cheapness of natural gas,  have made gas turbines
the  favored  technology  for  new  electric   generating  plants.  The  federal
government  estimates  that 80% of the new  electric  generating  capacity to be
added  from 1995 to 2015 will be fueled by  natural  gas and that the  amount of
generation  fueled by natural  gas will  increase  from the  current 10% to 29%.
According to the federal government, new gas turbines only need 15 days per year
of maintenance, on the average, compared with 30 days a year for steam turbines.
Although gas  turbines  historically  have been used to meet peak demand  rather
than  baseload  demand,  new  "combined  cycle"  units  (which use heat from the
turbine's  exhaust  to  drive  a  second  steam  or gas  turbine)  have  thermal
efficiencies  approaching  60% (60% of the  theoretical  maximum  heat  from the
burning gas is converted to  electricity)  and can be used as baseload units. In
contrast,  steam turbines fired by coal have  efficiencies  in the 36% range and
have operating and maintenance costs higher than those of combined cycle plants.
Further,  natural  gas-fired  turbines  emit  relatively  low  levels  of sulfur
dioxide,  particulates  and  complex  carbon  compounds  and thus may have lower
environmental  compliance costs than coal-fired or oil-fired plants. The federal
government  estimates  that combined cycle gas turbine plants alone will account
from 96,000 to 143,000 Megawatts of the 319,000 Megawatts of additional capacity
to be added in the next 17 years.

         The new  emphasis  on natural  gas-fired  generation  is causing  large
natural  gas  transmission  or  brokering  companies  to enter  the  electricity
generation market rapidly. They have access to large volumes of gas and have the
ability to raise large amounts of capital.  Accordingly,  most new investment in
combined cycle gas Projects and other  large-scale gas turbine Projects is being
made by  these  natural  gas/energy  companies  or by large  utilities  that are
entering the competitive generation industry.

         A number of large participants in the independent  generating  industry
have announced their intentions to build large gas turbine merchant power plants
in Connecticut,  Massachusetts and Maine in sizes from 250 to 750 Megawatts. The
capacity  of the  proposed  plants  exceeds  one-half  of the total  deficit  in
capacity caused by the shutdown of the Northeast Utilities nuclear power plants.
If all or many of the  announced  plants were  built,  there might be a material
increase in low-cost  generation  capacity in the New England  area.  There have
also  been  reports,   especially  from  the  northeastern  states,  that  large
non-utility   generating   companies  and  utilities  entering  the  competitive
generating  market outside their existing  service  territories are buying large
numbers of older  plants from local  utilities  with the  intention of replacing
them on site with new, large,  natural  gas-fueled plants. It is unclear whether
many of the announced  merchant  power plants will actually be built,  given the
uncertainties  of the market for electricity and the possibility  that there may
be  insufficient  gas pipeline  capacity or supplies to fuel all of the recently
announced plants.

         Many companies,  including  affiliates of fuel suppliers and utilities,
have applied to FERC to act as electric power marketers, because they anticipate
that if wholesale  wheeling becomes  significant there will be strong demand for
brokers or market  makers in  electric  power.  It is  uncertain  whether  power
marketers  will become  significant  factors in the  electric  power  market.  A
related  development is the creation of derivative  contracts for hedging of and
speculation in electricity supplies,  which may offer generators,  utilities and
large industrial or commercial consumers the ability to reduce the volatility of
competitive  prices. To date, the effects of derivative  contracts on the market
for electricity in the Northeast have not been material.

Renewable Power

         The pressures of competition are expected to harm the "renewable power"
segment of the industry,  which includes the Maine Biomass 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.  Many  observers  believe  that
renewable  power plants  without  existing  Power  Contracts  (with the possible
exception of biomass,  hydroelectric and geothermal plants with very low or zero
fuel costs)  will be  non-competitive  in the new markets  unless they are given
governmental   protection.   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.  It is possible that even after renewable energy  requirements come into
effect that the price for renewable  power will not increase  enough to make the
Maine Biomass Projects profitable.

Initial Effects of Trends

         Within the last 12 months,  several  negative  trends have developed in
the  independent  power  sector.  There  have been  industry-wide  moves  toward
consolidation  of  participants.  A number of utilities and equipment  suppliers
have  proposed  or entered  into joint  ventures  to reduce  risks and  mobilize
additional  capital for the more  competitive  environment,  while many electric
utilities are in the process of combining,  either as a means of reducing  costs
and  capturing   efficiencies,   or  as  a  means  of  increasing   size  as  an
organizational survival tactic.

         A second trend has been the continuing divestiture of generating assets
by  utilities,  creating a  competitive  generating  market,  especially  in New
England.  Most of the  divested  plants have been  acquired by  subsidiaries  or
affiliates  of  utilities  located  outside New  England.  In effect,  a game of
musical assets has occurred, with utilities in one area selling their generating
assets and using the proceeds,  plus  borrowings,  to purchase the same types of
generating assets in different areas of the United States.

         These  pressures  to acquire  suddenly  divested  assets and to enlarge
organizations  caused the prices of large  generating  stations or strategically
located generating  stations to rise sharply.  The Trust elected not to purchase
additional   generating  capacity  in  New  England  or  elsewhere  because  the
anticipated  rates of  return at the  inflated  prices  were too low.  The Trust
currently believes that many owners of large generating  stations in New England
are  currently  operating  at marginal or negative  margins and there is intense
pressure  on prices for base load  contracts  as  purchasers  of power  stations
attempt to keep their  stations  running.  The  competitive  pressures have been
intensified by the importation of power at peak periods from HydroQuebec and the
New York Power Pool and by the  construction  of several large gas turbine power
plants  in New  England,  which  have  increase  base load  capacity.  The ISO's
decision to allow these imports to reduce  perceived  demand for electricity and
thus to depress  quoted  peak  period  prices  for energy  below the cost of the
imported electricity has exacerbated these pressures.

         Finally, the ISO's actions to cap prices of reserve products and energy
during  system peak demand  periods have caused RPMCo to take the Maine  Biomass
Projects offline and have caused at least one other generator  company to remove
a power  plant  designed  for peak  usage  periods  from New  England  entirely.
Paradoxically, although there is more generation capacity in New England now for
non-emergency periods and prices for that capacity are depressed,  there is less
capacity  available  for meeting  emergency  peaks because of the effects of the
capped prices.  The Trust believes that  continued  interference  with the power
market could start a vicious circle of failure and additional price  regulation,
as  emergency  capacity  shortages  cause the ISO to add more  controls and more
mandatory runtimes to meet reliability needs.

         This may already be occurring.  In response to the high prices  offered
by the Trust and other  generators  for reserve  products in the summer of 1999,
and in  response to what the ISO  believed  were flaws in the  markets,  the ISO
requested and obtained approval from FERC in February 2000 to abolish the market
for operable capability, to cap the price for other reserves at the energy price
and to propose a restructuring of the electric products markets.

         In the  long  term,  there  seem to be  three  primary  strategies  for
non-utility  generating plants to succeed in the United States:  first, Projects
that have existing,  firm, long-term Power Contracts may do well for the life of
those Contracts so long as regulatory or legislative actions do not abrogate the
Contracts.  Second, Projects that are low-cost producers of electricity,  either
from   efficiencies   or  good   management  or  as  the  result  of  successful
technologies,  will have advantages in the market. Third, the viability of small
Projects or Projects generating electricity from "renewable sources" will depend
on favorable  legislative and regulatory action unless  electricity prices climb
sharply.

         (iii) Foreign operations.

         Because  yields  on  U.S.  Independent  Power  Projects  are  currently
depressed,  the Trust has committed a large amount of its capital to Independent
Power Projects in the United Kingdom and in Egypt.  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 Gas 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.  RIDCo is developing the Projects  itself
using local engineering personnel and contractors. Environmental,  construction,
legal,  labor  and  geologic  requirements  are  often  unclear  and can  change
unpredictably at any time. RIDCo may find it difficult to enforce  contracts and
other legal  obligations  against local  suppliers or  customers.  RIDCo 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 RIDCo 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
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  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. In some cases, an
Egyptian  Project will serve a single hotel under a 40 year  contract.  Although
risks caused by having an  association as an  intermediary  do not apply to this
Project,  the other  risks  discussed  here will.  Further,  by serving a single
hotel, there is less diversification of risk.

         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 Trust is unable to  accurately  estimate the number of  competitors
but believes that there are many competitors at all levels and in all sectors of
the industry.  There are over 25 generating  companies who are members of NEPOOL
and who compete  against the Maine  Biomass  Projects.  The largest of those are
Pacific Gas and Electric Company (approximately 4.5 gigawatts of capacity),  NRG
Energy Inc. (2.4 gigawatts) and Sithe Energy LLC (2.0 gigawatts). By comparison,
the Trust's equity in the Maine Biomass Projects is approximately  .026 gigawatt
(1/173 the size of Pacific Gas and Electric's  capacity),  and its equity in the
Maine Hydro  Projects'  capacity  (which is sold under long-term Power Contracts
and thus is not competing with other generators) is approximately .007 gigawatt.

     Please also review the discussion of changes in the industry above at (4) -
Trends in the Electric Utility and Independent Power Industries.

         The Santee River Project is an innovative attempt to recycle old tires.
Its primary sales competition  includes chemical and tire companies that produce
synthetic  rubber.  To date,  there are no substantial  competitors in the crumb
rubber market but if the Project  proves  profitable,  there are few barriers to
entry. 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.

     Please also review the discussion of changes in the industry above at (4) -
Trends in the Electric Utility and Independent Power Industries.

(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.  Recent federal  legislation  has eliminated the maximum
size  requirement for solar,  wind,  waste and geothermal small power production
facilities (but not for hydroelectric or biomass) for a fixed period of time.

     In addition,  PURPA  requires  electric  utilities to purchase  electricity
generated by Qualifying  Facilities at a price equal to the purchasing utility's
full "avoided cost" and to sell back up power to Qualifying  Facilities on a non
discriminatory  basis.  Avoided  costs are defined by PURPA as the  "incremental
costs to the electric  utility of electric energy or capacity or both which, but
for the purchase from the  Qualifying  Facility or Qualifying  Facilities,  such
utility would  generate  itself or purchase from another  source."  While public
utilities are not required by PURPA to enter into long-term  Power  Contracts to
meet their obligations to purchase from Qualifying  Facilities,  PURPA helped to
create a  regulatory  environment  in which it has become  more  common for such
contracts to be negotiated until recent years.

     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 the Maine Hydro and Maine Biomass  Projects,  which sell
electricity to public  utilities,  are Qualifying  Facilities.  Maintaining  the
Qualified  Facility  status  of an  electric  generating  Project  is of  utmost
importance to the Trust.  Such status may be lost if a Project does not meet the
operational  or  ownership  requirements  of PURPA.  For small power  production
facilities such as the Maine Hydro and Maine Biomass Projects,  the requirements
are  limited to  maximum  size,  fuel use and  ownership  requirements  that are
currently  unlikely  to  be  violated.   If  the  Trust  acquires  interests  in
cogeneration Projects that are Qualifying Facilities, those facilities must meet
more stringent requirements,  such as minimum operating efficiency standards and
minimum use of thermal energy by customers of a cogeneration Project.

     The Trust endeavors to comply with applicable  PURPA  requirements and does
not believe that the Maine  Biomass and Maine Hydro  Projects are subject to any
requirement that could jeopardize their statuses as Qualified Facilities. If the
Trust  were to  invest  in  cogeneration  Projects  or  certain  other  types of
Qualifying  Facilities,  the PURPA  standards  could raise  material  compliance
questions.  In any event, there can be no assurance that a Project will maintain
its  Qualified  Facility  status.  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 (which are generally substantially below the Power Contract rates)
or the  Project's  Power  Contract can be  terminated  by the electric  utility.
States may  require  utilities  to  institute  monitoring  systems  under  which
electric utilities continuously meter a cogeneration Project's performance.

(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 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
nonnavigable,  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. All but six of the Maine Hydro Projects (with a
rated  capacity  of 2.1  Megawatts)  are  subject to  licensing.  Of these eight
Projects,  six (with a rated  capacity of 6.4 Megawatts)  have current  licenses
that  expire  from time to time  between  the  years  2019 and 2037 and two (1.5
Megawatts) are currently in the licensing process,  which can take from three to
five years. The Trust believes that it will obtain licenses for each of these.

     The proposed  conditions for one pending license, at the Pittsfield Project
on the Kennebec River (1.1 Megawatt),  have been received. The Project will have
to provide  upstream fish  passages no earlier than 2002 or, if later,  the time
when all dams further upstream have provided passage. The Project will also have
to provide  interim  fish passage both  upstream  and  downstream  to the extent
warranted by fishery  studies;  downstream  mitigation  measures may require the
Project to restrict flow through its turbines  during  certain  spring peak flow
periods that could  materially  impair  electricity  output.  Until  studies are
complete,  it is not  possible  to  estimate  the  effects of these  conditions.
Further,  as noted above at Item  1(c)(3) - Business  Narrative  Description  of
Business - Project Operation, the licenses may include other onerous conditions.
The  Trust is a  member  of the  Kennebec  Hydro  Developers  Group,  which  has
negotiated  with Maine  agencies  and  environmental  groups for  watershed-wide
studies and remediation programs.

(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.

     The Clean Air Act Amendments of 1990 contain  provisions which regulate the
amount of sulfur  dioxide  and  oxides of  nitrogen  which may be  emitted  by a
Project.  These emissions may be a cause of "acid rain."  Qualifying  Facilities
are  currently  exempt from the acid rain  control  program of the Clean Air Act
Amendments.  However, non-Qualifying Facility Projects will require "allowances"
to emit  sulfur  dioxide  after  the year  2000.  Under  the  Amendments,  these
allowances may be purchased from utility  companies then emitting sulfur dioxide
or  from  the  EPA.  Further,  an  Independent  Power  Project  subject  to  the
requirements has a priority over utilities in obtaining allowances directly from
the EPA if (a) it is a new  facility or unit used to generate  electricity;  (b)
80% or  more  of its  output  is sold at  wholesale;  (c) it does  not  generate
electricity  sold to affiliates (as determined under the Holding Company Act) of
the owner or operator (unless the affiliate cannot provide allowances in certain
cases)  and (d) it is  non-recourse  project-financed.  The  market  price of an
allowance  cannot be predicted  with  certainty at this time.  In recent  years,
supply of allowances has tended to exceed demand,  primarily because of improved
control technologies and the increased use of natural gas.

     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  Trust  has  filed  Title  V  applications  with  the
appropriate  states for the Maine Biomass Projects,  and has been advised by EPS
that an application  has been approved for the Santee River  Project,  which are
all the Projects that are required to file. 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  will be in compliance  with Title V
requirements  with  only  minor  modifications  such as the  installation  of an
additional catalytic converter on some engines.

     In July 1997 the  Environmental  Protection  Agency  adopted more stringent
standards for levels of ozone and small particulate  matter (particles less than
25 microns in diameter) in geographic areas.  These new standards may cause some
areas in which Projects are located to be classified as non-attainment areas. If
so, states will be required to impose additional  requirements for industries to
reduce emissions. It is uncertain whether or how any reductions would be applied
to small facilities such as the Trust's  Projects.  If reductions were required,
the Trust  might have to make  significant  capital  investments  to install new
control technology or might have to reduce operations. In addition, many eastern
states,  including Maine, have organized in the Ozone Transport Assessment Group
to  require  further   restrictions  on  emissions  of  nitrogen   oxides.   The
Environmental  Protection Agency is considering the Group's  recommendations  as
well as other  proposals  to  reduce  emissions  of  nitrogen  oxides  and other
ozone-forming chemicals. If adopted, new regulations could required the Trust to
install additional  equipment to reduce those emissions or to change operations.
Nitrogen oxide  reductions can be difficult to achieve with add-on equipment and
often  require  decreases  in  operating  efficiency,  both of which could cause
material cost to the Trust. It is not possible at this time to estimate  whether
or not any potential regulatory changes would materially affect the Trust.

     The Clean Air Act  Amendments  empower  states to impose  annual  operating
permit  fees of at  least  $25 per ton of  regulated  pollutants  emitted  up to
$100,000 per  pollutant.  To date, no state in which the Trust operates has done
so. If a state were to do so,  such fees  might  have a  material  effect on the
Trust's  costs  of  generation,  in light of the  relatively  small  size of the
Trust's  facilities  as opposed to large  utility  generation  plants that might
benefit from the cap on fees.

     The  Trust's  Projects  must  comply  with many  federal and state laws and
regulations  governing  wastewater and stormwater  discharges from the Projects.
These are generally  enforced by states under "NPDES"  permits for point sources
of  discharges  and by  stormwater  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 1999,  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        $(503,000)          $ 40,743,000 (a)

United Kingdom         180,000             16,916,000

Egypt                 (198,000)             4,736,000


(a) Includes  $1,497,000  investment in early development of Mediterranean Fiber
Optic Project principally expended for U.S. goods and services.

         Long-lived assets  indirectly owned by the Trust,  based on the Trust's
equity interest as of December 31, 1999, were as follows:
                                                    Value as stated in
Country                 Description of asset     financial statements

United States     Investments in Projects and
                           Global Fiber Group      $ 26,475,000(a)

United Kingdom    Investment in Landfill Projects    16,916,000

Egypt             Investment in Egyptian Projects     4,736,000

(a)  Investment  in early  development  of  Mediterranean  Fiber  Optic  Project
principally expended for U.S. goods and services.

         Projects or  investments  located in one  country do not have  material
customers from any other country.

         Disclosures of risks  associated  with these  investments  are found at
Item 1(c)(4) - Trends in the Independent Power and Other Industries.

(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 2 employees located in Oak Harbor,  Ohio. RIDCo has
approximately 10 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                                  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 five sites Leased by n/a       less than      n/a    Electric gen-
                  in Egypt   joint                10 acres      erating or
                       venture*                                water desali-
                                                               nation facil-
                                                                  ties

*Joint venture equally owned by Trust and Power IV.
#  Joint venture to be equally owned by Trust and Growth Fund.

     The Trust owns less than 50% of the equity  interest in the Maine  Biomass,
Santee River, Mediterranean Fiber Optic, Quantum and Metasound investments.

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

Item 3.  Legal Proceedings.

         In October 1998, Indeck  Maine  brought two  administrative  complaints
before  FERC,  naming  ISO-New  England  and  the  New  England  Power  Pool  as
defendants,  alleging  that the  defendants  had  violated  their  own rules and
applicable  FERC orders in denying pooled  transmission  facility status for the
transmission  links  between  Indeck  Maine's two  Projects  and the ISO's other
transmission facilities. In February 1999, FERC rejected the complaints.  Indeck
Maine is  considering  whether to bring a new action  together with other NEPOOL
members based on new facts.

         In March 2000  Indeck  Maine  intervened  in a complaint  before  FERC,
Dighton  Power  Assoc.,  L.P.  et.  al. v.  ISO-New  England,  Inc.,  Docket No.
EL00-40-000,  in which several  generators  alleged that the ISO had  improperly
capped operable  capability  prices during emergency  conditions in NEPOOL.  See
Item  1(c)(3)(ii)  -  Plant  Operation  - Maine  Biomass  Projects,  above.  The
complaint  requests FERC to rule that the operable  capability  prices should be
based on the highest bids on those  dates.  If this were  successful,  the Maine
Biomass Projects might be entitled to substantial  additional  payments from the
ISO. The matter is in the  preliminary  stages of pleading and motion  practice.
Indeck Maine intends to participate vigorously in the proceedings.

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 1999.

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  five  other  investment  programs  sponsored  by  the  Managing
Shareholder (Ridgewood Electric Power Trusts I, II, III and IV and the Ridgewood
Power  Growth  Fund) 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 1,611 record
holders of Investor Shares.

(c)  Dividends

     The Trust made distributions as follows in 1998 and 1999:

                                         Year ended December 31,
                                            1998        1999
Total distributions to Investors        $4,089,130   $ 3,904,757
Distributions per Investor Share             4,383         4,186
Distributions to Managing Shareholder       41,304        39,412

     Distributions  have been made on a quarterly  basis  since April 1997.  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. Because all Ridgewood
Power programs have converted their distribution  schedule to a quarterly basis,
the Trust will continue quarterly  distributions rather than moving to a monthly
basis as previously expected.

     The  Trust  made  distributions  at the  rate of 4.2% in 1999  and does not
anticipate  that  distributions  during 2000 will be at a  substantially  higher
rate.  This is because  distributions  from the Maine Hydro Projects during 1998
reflected higher than average water flows,  which may not recur,  because of the
7.5% decrease in the Maine Hydro Projects'  electricity rates, because the Maine
Biomass  Projects  may  continue to incur losses until at least 2001 and because
the Santee River Project is not anticipated to begin operation  before late 2000
and may not show operating profits for some additional time after that. Further,
if  adverse  events  were  to  occur,  the  Trust  may  be  required  to  reduce
distributions from existing levels.

     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.

<TABLE>
<CAPTION>
                                                                                As of and for the
                                                                         Period from Commencement
                                                                               of Share Offering
                                     As of and for the Years                     (April 12, 1996)
                                       Ended December 31,                              through
                                    1999               1998            1997     December 31, 1996

<S>                           <C>             <C>              <C>             <C>
Interest income                    $1,476,695       $ 2,767,348    $ 1,003,276    $      158,236
Total revenue (loss)                 (520,768)        3,020,949        844,877           257,460
Net income (loss)                  (4,975,059)       (2,643,662)    (1,345,153)         (114,375)
Net assets (shareholders'
  equity)                          60,433,793        69,216,738     53,046,118        14,501,931
Investments                        48,127,301        27,075,657     13,466,706         7,133,340
Total assets                       62,395,597        71,735,025     54,469,925        14,945,301
Long-term obligations                       0                 0              0                 0
Per Share of Trust
 Interest:
  Revenues (loss)                        (558)             3,238          1,108             1,418
  Net income (loss)                    (5,333)           (2,834)        (1,763)             (630)
  Net asset value                      64,983            74,303         69,342            79,856
Distributions to Investors              4,186             4,383          1,833             1,466

</TABLE>

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 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 United Kingdom
Landfill  Projects,  the  Egypt  Projects  and  the  Mediterranean  Fiber  Optic
Project/GFG.

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
the months of July,  August,  October,  November and December 1997. The Projects
are  currently  shut down and will not be operated  (except for required  tests)
unless sales arrangements are obtained which would provide sufficient revenue to
cover the Projects' fixed and variable  costs.  Under current  legislation,  the
electricity  market in the State of Maine will be  deregulated on March 1, 2000.
If  biomass  fuel can be  purchased  at  reasonable  prices in the year 2000 and
beyond,  the Maine  Biomass  Projects  could be among the low cost  producers of
electricity  in Maine and could be able to operate  profitably  in a competitive
market environment.  In the meantime,  the Trust intends to keep the Projects in
an idle mode until  market  conditions  become more  favorable,  and the Project
operator will seek short-term contracts to sell energy, installed capability and
operable capability.

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,  which is currently in the construction  phase,
will process waste tires and generate  high quality crumb rubber.  Assuming that
the plant  functions  as  specified  and that the price  received  for the crumb
rubber from  customers  is as  forecast,  the Project  should  begin  profitable
operations in 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 is to increase its sales and operating  results by offering
capable, inexpensive conveyor systems that are easy to install.

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 is  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 is to increase its sales and operating  results by
offering more flexible systems that offer superior sound quality.

The Trust and the Growth Fund are  developing  several  projects  that will sell
power and potable  water to hotels in Egypt.  The projects  will have  contracts
with the hotels  with terms of 10 to 40 years.  The first of these  projects  is
expected to begin operation in the first half of 2000.

The Trust and the Growth Fund also  purchased a 25% interest in GFG. GFG expects
to be the co-developer of a large Mediterranean fiber optic project scheduled to
close in the second  quarter of 2000.  The Trust and Growth  Fund expect to fund
approximately  $18 million of this  Mediterranean  Fiber Optic  project  when it
closes.

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. The Growth Fund is expected to provide additional funds to the subsidiary
to acquire  additional  plants as they are  developed.  To the  extent  that the
Growth Fund provides funds, it will receive an undivided  interest in the entire
package of plants.

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

Results of Operations

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 is 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 50% 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 and the Growth Fund own a 25% interest in GFG which  expects to be the
co-developer of a large  Mediterranean fiber optic project scheduled to close in
the  second  quarter  of  2000.  The  Trust  and  Growth  Fund  expect  to  fund
approximately $18 million of the Mediterranean Fiber Optic when it closes.

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.

The year ended December 31, 1998 compared to the year ended December 31, 1997.

In 1998,  the Trust had a net loss of  $2,644,000  as  compared to a net loss of
$1,345,000 in 1997. The 1998 and 1997 losses include the following  results from
projects:

Project                                    1998          1997
------------------------------------     ----------    -----------

Maine Hydro Projects .            (2)   $   658,000    $   522,000
Maine Biomass Projects            (2)      (694,000)      (680,000)
Santee River Rubber ..            (2)       363,000           --
MetaSound Systems ....            (2)       (61,000)          --
Quantum Conveyor .....            (2)       (12,000)          --
WaterPure Corporation             (1)    (1,881,000)          --

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

The  increase  in income  from the Maine  Hydro  Projects  reflects  the  higher
revenues in 1998 compared to 1997. The improved revenues were a result of better
rainfall improving water flow through the hydroelectric dams.

The loss from the  shutdown  Maine  Biomass  Projects in 1998 was similar to the
loss  incurred  in 1997.  However,  the 1998  loss  reflects  twelve  months  of
operations  compared  to six  months in 1997.  The lower  loss per month in 1998
reflects a reduction in expenses as well as the sale of installed capacity.

Income from the Santee  River  Rubber  project  reflects  the  Trust's  share of
interest income earned on unexpended cash balances.

The loss  incurred by MetaSound  Systems  primarily  reflects the  marketing and
sales costs of introducing its digital audio marketing products.

The  loss  incurred  by  Quantum  Conveyor   primarily  reflects  the  costs  of
aggressively marketing its conveyor systems.

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.

Interest  income  at the  Trust  level  increased  from  $1,003,000  in  1997 to
$2,709,000  in 1998 as a result of the  higher  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 increased $1,478,000
from  $2,190,000  in 1997 to  $3,668,000  in 1998.  The  primary  reason for the
increase was $1,606,000 of management  fees charged by the Managing  shareholder
beginning in April 1998.  Reimbursements to the Managing  Shareholder  increased
from $393,000 in 1997 to $794,000 in 1998. These increases were partially offset
by a decrease in the 2% investment fee on capital  contributions from $1,145,000
in 1997 to $337,000 in 1998  reflecting  the  decrease in capital  contributions
caused by the  closing  of the  Trust  offering  in April  1998.  Due  diligence
expenses related to unsuccessful  potential investments increased to $831,000 in
1998 from $604,000 in 1997.

Liquidity and Capital Resources

In 1999, the Trust's  operating  activities used cash of $3,186,000  compared to
$2,782,000  in 1998 as a result of lower  Trust  interest  income and  increased
research and development costs at its consolidated  WaterPure  subsidiary.  This
was partially offset by less use of cash in 1999 for working capital compared to
1998, when significant cash was used to pay down current liabilities.

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 1998, the Trust used
$14,021,000 in its investing activities,  primarily the purchase of its interest
in Santee River Rubber, Quantum Conveyor and MetaSound Systems.

In 1999,  financing  activities  used  $3,876,000 of cash compared to generating
$18,814,000 of cash in 1998. The 1998 financing  activities included $22,945,000
of cash from net shareholders'  contributions  from the offering which ceased in
April 1998.

As of December 31, 1999,  the Trust had  $14,759,000  of cash on hand. The Trust
anticipates investing most of these funds in new projects in 2000.

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. 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 1999 or 1998.

Other  than  investments  of  available  cash  in  power  generation   Projects,
obligations of the Trust are or will be generally  limited to payment of Project
operating  expenses,  payment of a management  fee to the Managing  Shareholder,
payments  for  certain  accounting  and  legal  services  to third  persons  and
distributions to shareholders of available  operating cash flow generated by the
Trust's  investments.  The Trust's  policy is to  distribute  as much cash as is
prudent to  Shareholders.  Accordingly,  the Trust has not found it necessary to
retain a material  amount of  working  capital.  The  amount of working  capital
retained is further reduced by the availability of the line of credit facility.

The  Trust  anticipates  that,  during  2000,  its cash  flow  from  operations,
unexpended  offering  proceeds and line of credit  facility  will be adequate to
fund its obligations.

Year 2000 Remediation

     The  Managing  Shareholder  and its  affiliates  began year 2000 review and
planning  in  early  1997.  After  initial  remediation  was  completed,  a more
intensive review discovered additional issues and the Managing Shareholder began
a formal  remediation  program in late 1997.  All  remediation  and testing were
completed by October 31, 1999 and no material  malfunctions have been discovered
through the date of this filing.

     The accounting,  network and financial packages for the Ridgewood companies
are basically  off-the-shelf packages that were remediated,  where necessary, by
obtaining patches or updated versions. The Trust's allocable portion of the cost
of upgrades that were accelerated because of the Year 2000 problem was less than
$1,000.

     The Managing  Shareholder  has two major  systems  affecting the Trust that
rely  on  custom-written  software,  the  subscription/investor   relations  and
investor  distribution  systems,  which maintain individual investor records and
effect  disbursement  of  distributions  to Investors.  These were remediated in
1999,  including the elements of those systems used to generate  internal  sales
reports  and  other  internal  reports.   Although  these  were  not  designated
mission-critical,  they were also  successfully  remediated by October 31, 1999.
Some subsystems are being remediated using the "sliding  window"  technique,  in
which two digit  years less than a  threshold  number  are  assumed to be in the
2000's and higher two digit  numbers are  assumed to be in the 1900's.  Although
this will allow  compliance  for several years beyond the year 2000,  eventually
those  systems  will  have to be  rewritten  again  or  replaced.  The  Managing
Shareholder expects that the ordinary course of system upgrading will eventually
cure this problem.

     The Trust's share of the incremental cost for Year 2000 remediation of this
custom  written  software  and  related  items  for 1998  and  prior  years  was
approximately $12,250 and was approximately $11,500 for 1999.

     Each of the Trust's electric  generating  facilities,  as well as Waterpure
and the  Egyptian  developments,  was  reviewed  in 1999 by RPMCo  personnel  to
determine if its electronic  control systems contained  software affected by the
Year 2000 problem or contain  embedded  components that contain Year 2000 flaws.
To date the Trust has discovered no systems having a material  impact on output,
environmental  compliance,  recordkeeping or any other material impact that have
Year 2000 concerns.  The Maine Biomass Projects contained certain embedded chips
that were replaced before December 31, 1999 at a nominal cost. The Trust's share
of the estimated costs of the review and of any minor upgrades or rehabilitation
was less than  $25,000.  The  operators  of the  Santee  River  Project  and the
management teams of MetaSound and Quantum have informed the Managing Shareholder
that their  equipment  and programs are  year-2000  compliant  and that they and
their  customers  and  suppliers  have not  experienced  any material  year 2000
malfunctions.

     The Managing  Shareholder and its affiliates do not  significantly  rely on
computer input from  suppliers and customers and thus are not directly  affected
by other  companies'  Year 2000  compliance.  No material  adverse  effects from
customers' or suppliers' Year 2000 problems have occurred.

     Based on its internal  evaluations and the risks and contexts identified by
the  Commission in its rules and  interpretations,  the Trust believes that Year
2000  issues  relating  to its assets and  remediation  program  will not have a
material effect on its facilities,  financial  position or operations,  and that
the costs of addressing the Year 2000 issues will not have a material  effect on
its future  consolidated  operating results,  financial condition or cash flows.
However,  this  belief is based upon  current  information,  and there can be no
assurance that unanticipated problems will not occur or be discovered that would
result in material adverse effects on the Trust.

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  primary  market risk  exposure is limited  interest  rate risk
caused  by  fluctuations  in  short-term  interest  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 flows and
related weighted average interest rates by contractual maturity dates.

                              December 31, 1999
                             Expected Maturity Date
                                     2000
                                    (U.S. $)

Bank Deposits and Commercial
  Paper                               $14,759,184
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, 1999 and 1998 ...   F-3
Statement of Operations for Years Ended
  December 31, 1999, 1998 and 1997 .............   F-4
Statement of Changes in Shareholders' Equity for
  Years Ended December 31, 1999, 1998 and 1997 .   F-5
Statement of Cash Flows for
  Years Ended December 31, 1999, 1998 and 1997
 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
Financial Statements for MetaSound Systems, to be filed by amendment

     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 Ridgewood Electric Power Trust
I ("Ridgewood  Power I"),  Ridgewood  Electric Power Trust II ("Ridgewood  Power
II"),  Ridgewood  Electric  Power Trust IV  ("Ridgewood  Power III"),  Ridgewood
Electric  Power Trust V ("Power  IV") and The  Ridgewood  Power Growth Fund (the
"Growth 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 Ridgewood
Power.  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 17 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 RPMCo.  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 53, has also served as President of the Trust since
its  inception in November  1992 and as President of RPMCo,  Ridgewood  Power I,
Ridgewood  Power II,  Ridgewood  Power III, Power IV and the Growth 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 or  controlling  owner 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 41,  has served as  Executive  Vice  President  of the
Managing Shareholder,  RPMCo,  Ridgewood Power I, the Trust, Ridgewood Power II,
Ridgewood  Power  III,  Ridgewood  Power  IV and the  Growth  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.

     Thomas R. Brown,  age 45, joined the Managing  Shareholder in November 1994
as Senior Vice  President and holds the same position with the Trust,  RPMCo and
each of the other trusts sponsored by the Managing Shareholder.  He became Chief
Operating Officer of the Managing  Shareholder,  RPMCo and the Ridgewood Power I
through V trusts in  October  1996,  and is the Chief  Operating  Officer of the
Growth Fund.  Mr. Brown has over 20 years'  experience  in the  development  and
operation of power and industrial projects. From 1992 until joining the Managing
Shareholder  he was  employed  by  Tampella  Services,  Inc.,  an  affiliate  of
Tampella,  Inc., one of the world's largest manufacturers of boilers and related
equipment for the power  industry.  Mr. Brown was Project Manager for Tampella's
Piney Creek  project,  a $100 million  bituminous  waste coal fired  circulating
fluidized  bed power plant.  Between 1990 and 1992 Mr. Brown was Deputy  Project
Manager at Inter-Power of  Pennsylvania,  where he successfully  developed a 106
megawatt  coal fired  facility.  Between 1982 and 1990 Mr. Brown was employed by
Pennsylvania  Electric  Company,  an  integrated  utility,  as a Senior  Thermal
Performance  Engineer.  Prior to that,  Mr. Brown was an Engineer with Bethlehem
Steel  Corporation.   He  has  an  Bachelor  of  Science  degree  in  Mechanical
Engineering  from  Pennsylvania  State University and an MBA in Finance from the
University of  Pennsylvania.  Mr. Brown  satisfied all  requirements to earn the
Professional Engineer designation in 1985.

     Martin V. Quinn,  age 52, assumed the duties of Chief Financial  Officer of
the  Managing  Shareholder,  the Trust,  the prior four trusts  organized by the
Managing Shareholder and RPMCo in November 1996 under a consulting  arrangement.
He became a full-time  officer of the  Managing  Shareholder  and RPMCo in April
1997 and is now also Chief Financial  Officer of the Growth Fund. He is also the
Chief Financial  Officer of Ridgewood  Capital and of Ridgewood  Capital Venture
Partners, LLC and Ridgewood Institutional Venture Partners, LLC.

     Mr. Quinn has 31 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 Price  Waterhouse,  and a Bachelor of Science
degree in Accounting and Finance from the University of Scranton (1969).

     Mary Lou  Olin,  age 47,  has  served  as Vice  President  of the  Managing
Shareholder,  RPMCo,  Ridgewood Capital, the Trust, Ridgewood Power I, Ridgewood
Power  II,  Ridgewood  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, 2001 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 59, is founder,  sole  shareholder and President of
Hellmold  Associates,  Inc., an investment  banking firm and investment  adviser
specializing  in working with  troubled  companies  or their  creditors to raise
capital,  divest businesses and restructure  liabilities,  whether in or outside
bankruptcy.  Other financial advisory services provided by 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
which 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  Ridgewood
Power I and Ridgewood  Power III, 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 42, 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 55, 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)  RPMCo.

     As  discussed  above  at  Item 1 -  Business,  RPMCo  assumed  day-  to-day
management responsibility for the Maine Biomass Projects in March 1999. Like the
Managing Shareholder,  RPMCo is wholly owned by Robert E. Swanson. It will enter
into an  "Operation  Agreement"  with the Indeck Maine  Energy,  LLC under which
RPMCo,  under the  supervision  of the  Managing  Shareholder,  will provide the
management,  purchasing,  engineering,  planning and administrative services for
the  Providence  Project.  RPMCo  will  charge  the  Trust at its cost for these
services and for the Trust's  allocable amount of certain overhead items.  RPMCo
shares space and facilities with the Managing Shareholder and its affiliates. To
the extent  that common  expenses  can be  reasonably  allocated  to RPMCo,  the
Managing  Shareholder  may, but is not required to, charge RPMCo 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 RPMCo for
the full amount of rent,  utility  supplies  and office  expenses  allocable  to
RPMCo.  As a  result,  both  initially  and on an  ongoing  basis  the  Managing
Shareholder  believes  that  RPMCo'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. RPMCo 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 RPMCo;  and allocations will be made in a manner  consistent
with generally accepted accounting principles.

     RPMCo 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.  RPMCo 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
RPMCo,  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 RPMCo;  however,  no amendment  that
materially  increases the obligations of the Trust or that materially  decreases
the  obligations  of RPMCo 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 RPMCo are Mr.  Swanson  (President),  Mr. Gold
(Executive Vice President), Mr. Brown (Senior Vice President and Chief Operating
Officer),  Mr. Quinn (Senior Vice President and Chief Financial Officer) and Ms.
Olin (Vice President.  Douglas V. Liebschner,  Vice President - Operations, is a
key employee.

     Douglas V. Liebschner,  age 52, joined RPMCo in June 1996 as Vice President
of  Operations.  He has  over  27  years  of  experience  in the  operation  and
maintenance of power plants.  From 1992 until joining RPMCo,  he was employed by
Tampella  Services,  Inc.,  an affiliate of Tampella,  Inc.,  one of the world's
largest  manufacturers of boilers and related  equipment for the power industry.
Mr. Liebschner was Operations  Supervisor for Tampella's Piney Creek project,  a
$100 million bituminous waste coal fired circulating fluidized bed ("CFB") power
plant.  Between 1989 and 1992,  he  supervised  operations  of a waste to energy
plant  in  Poughkeepsie,  N.Y.  and  an  anthracite-waste-coal-burning   CFB  in
Frackville,  Pa.  From 1969 to 1989,  Mr.  Liebschner  served in the U.S.  Navy,
retiring  with the rank of  Lieutenant  Commander.  While in the Navy, he served
mainly in billets  dealing with the  operation,  maintenance  and repair of ship
propulsion plants,  twice serving as Chief Engineer on board U.S. Navy combatant
ships.  He has a  Bachelor  of  Science  degree  from  the U.S.  Naval  Academy,
Annapolis, Md.

 Item 11.  Executive Compensation.

     The  Trust  reimburses  RPMCo  at cost for  services  provided  by  RPMCo'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 1998 or 1999. 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.  Accordingly  in August 1996,  January  1997 and  following
years the Trust paid each Independent Panel Member $5,000 for his services.  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.

     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 1998 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        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   2,377,941   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 RPMCo 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, 1999.

 (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    April 14, 2000
       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    April 14, 2000
       Robert E. Swanson     Executive Officer

By:/s/ Martin V. Quinn      Senior Vice President and
       Martin V. Quinn    Chief Financial Officer  April 14, 2000

By:/s/ Christopher I. Naunton   Chief Accounting Officer    April 14, 2000
       Christopher I. Naunton

RIDGEWOOD POWER LLC  Managing Shareholder  April 14, 2000

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

 /s/ Robert E. Swanson  *   Independent Panel Member   April 14, 2000
       Ralph O. Hellmold

 /s/ Robert E. Swanson  *   Independent Panel Member    April 14, 2000
       Jonathan C. Kaledin

 /s/ Robert E. Swanson  *   Independent Panel Member    April 14, 2000
       Joseph Ferrante, Jr.

*  As attorney-in-fact for the Independent Trustee

<PAGE>
                        Ridgewood Electric Power Trust V

                        Consolidated Financial Statements

                        December 31, 1999, 1998 and 1997

<PAGE>

                        Report of Independent Accountants


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

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated   statements  of  operations,   comprehensive   loss,   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, 1999 and 1998, and the results of their  operations
and their cash flows for each of the three  years in the period  ended  December
31, 1999, in conformity with  accounting  principles  generally  accepted in the
United States.  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,
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 the opinion expressed above.



PricewaterhouseCoopers LLP
New York, NY
March 24, 2000


<PAGE>



Ridgewood Electric Power Trust V
Consolidated Balance Sheet
--------------------------------------------------------------------------------

                                                       December 31,
                                                  1999             1998
                                               ------------    ------------
Assets:
Cash and cash equivalents ..................   $ 14,759,184    $ 42,832,241
Due from affiliates ........................        675,185       1,165,140
Other current assets .......................        404,351         262,489
                                               ------------    ------------
  Total current assets .....................     15,838,720      44,259,870

Investments:
    Maine Hydro Projects ...................      5,663,505       6,217,289
    Maine Biomass Projects .................      5,825,271       6,306,817
    MetaSound Systems ......................        921,163       2,447,413
    Quantum Conveyor .......................      2,810,410       3,096,170
    Santee River Rubber ....................      8,186,456       9,007,968
    Egypt Projects .........................      4,736,093            --
    Mediterranean Fiber Optic Project/GFG ..      1,497,670            --
    United Kingdom Landfill Projects .......     16,916,309            --

Deferred due diligence costs ...............           --           399,498
                                               ------------    ------------
  Total assets .............................   $ 62,395,597    $ 71,735,025
                                               ------------    ------------

Liabilities and shareholders' equity:

Liabilities:
Accounts payable and accrued expenses ......   $    174,857    $    194,531
Due to affiliates ..........................        449,178         593,582
                                               ------------    ------------
  Total current liabilities ................        624,035         788,113
                                               ------------    ------------

Minority interest ..........................      1,337,769       1,730,174

Commitments and contingencies

Shareholders' equity:
Shareholders' equity (932.8875 investor
 shares issued and
       outstanding) ........................     60,644,421      69,429,387
Subscription receivable ....................        (23,000)       (113,500)
                                               ------------    ------------
  Shareholders' equity, net ................     60,621,421      69,315,887
Managing shareholder's accumulated deficit
 (1 management share
       issued and outstanding) .............       (187,628)        (99,149)
                                               ------------    ------------
  Total shareholders' equity ...............     60,433,793      69,216,738
                                               ------------    ------------

  Total liabilities and shareholders' equity   $ 62,395,597    $ 71,735,025
                                               ------------    ------------





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

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

                                            For the Year Ended December 31,
                                     -----------------------------------------
                                          1999         1998           1997
                                     -----------    -----------    -----------
Revenue:
Interest income ..................   $ 1,476,695    $ 2,767,348    $ 1,003,276
Equity interest in incom
 (loss) of:
 Maine Hydro Projects ............       849,456        657,989        521,710
 Maine Biomass Projects ..........    (1,006,796)      (694,321)      (680,109)
 MetaSound Systems ...............    (1,526,250)       (61,227)          --
 Quantum Conveyor ................      (345,760)       (12,191)          --
 Santee River Rubber .............        98,488        363,351           --
 Egypt Projects ..................      (197,759)          --             --
 Mediterranean Fiber Optic
 Project/GFG .....................       (49,163)          --             --
 United Kingdom Landfill Projects        180,321           --             --
                                     -----------    -----------    -----------

Total (loss) revenue .............      (520,768)     3,020,949        844,877
                                     -----------    -----------    -----------
Expenses:
Investment fee paid to the
 managing shareholder ............          --          337,158      1,145,212
Project due diligence costs ......       969,793        830,823        603,639
Management fees ..................     2,377,941      1,606,269           --
Allocated management costs .......          --          793,654        392,752
Accounting and legal fees ........       100,104         59,719         30,130
Purchased research and development          --        1,969,951           --
Research and development .........     1,258,816           --             --
Other expenses ...................       140,042         40,342         18,297
                                     -----------    -----------    -----------

Total expenses ...................     4,846,696      5,637,916      2,190,030
                                     -----------    -----------    -----------

Loss from operations .............    (5,367,464)    (2,616,967)    (1,345,153)

Minority interest in loss
 (income) of consolidated
    subsidiaries .................       392,405        (26,695)          --
                                     -----------    -----------    -----------

Net loss .........................   $(4,975,059)   $(2,643,662)   $(1,345,153)
                                     -----------    -----------    -----------




        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, 1999, 1998 and 1997
--------------------------------------------------------------------------------
<TABLE>
<S>                             <C>              <C>             <C>             <C>
                                                    Subscription     Managing
                                    Shareholders     Receivable     Shareholder        Total
                                    ------------    ------------    ------------    ------------

Shareholders' equity, January
 1, 1997 (181.6 investor
  shares and 1 management share)    $ 14,566,764    $    (61,000)   $     (3,833)   $ 14,501,931

Capital contributions, net
 (581.2 investor shares) ........     49,845,474      (8,543,653)           --        41,301,821

Cash distributions ..............     (1,398,357)           --           (14,124)     (1,412,481)

Net loss for the year ...........     (1,331,702)           --           (13,451)     (1,345,153)
                                    ------------    ------------    ------------    ------------

Shareholders' equity, December
 31, 1997 (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
                                    ------------    ------------    ------------    ------------
</TABLE>

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

                                           For the Year Ended December 31,
                                    -----------------------------------------
                                      1999            1998            1997
                                    -----------    -----------    -----------

Net loss ........................   $(4,975,059)   $(2,643,662)   $(1,345,153)

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

Comprehensive loss ..............   $(4,906,638)   $(2,643,662)   $(1,345,153)
                                    -----------    -----------    -----------



        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,
                                 --------------------------------------------
                                     1999           1998             1997
                                 ------------    ------------    ------------
Cash flows from operating
 activities:
Net loss .....................   $ (4,975,059)   $ (2,643,662)   $ (1,345,153)
                                 ------------    ------------    ------------
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 .......       (392,405)         26,695            --
 Equity interest in (income)
  loss of:
  Maine Hydro Projects .......       (849,456)       (657,989)       (521,710)
  Maine Biomass Projects .....      1,006,796         694,321         680,109
  MetaSound Systems ..........      1,526,250          61,227            --
  Quantum Conveyor ...........        345,760          12,191            --
  Santee River Rubber ........        (98,488)       (363,351)           --
  Egypt Projects .............        197,759            --              --
  Mediterranean Fiber Optic
   Project/GFG ...............         49,163            --              --
  United Kingdom Landfill
   Projects ..................       (180,321)           --              --
  Changes in assets and
   liabilities:
  Increase in other current
   assets ....................       (141,862)        (95,319)       (137,170)
  (Decrease) increase in
   accounts payable and
   accrued expenses ..........        (19,674)       (906,754)        703,381
  Decrease (increase) in due
   to/from affiliate, net ....        345,551        (879,613)        389,931
                                 ------------    ------------    ------------
       Total adjustments .....      1,789,073        (138,641)      1,114,541
                                 ------------    ------------    ------------
Net cash used in operating
 activities ..................     (3,185,986)     (2,782,303)       (230,612)
                                 ------------    ------------    ------------
Cash flows from investing
 activities:
Investment in Hydro Projects .           --              --          (265,952)
Investment in Biomass Projects       (525,250)       (383,276)     (7,297,971)
Investment in MetaSound
 Systems .....................           --        (2,508,640)           --
Investment in Quantum Conveyor        (60,000)     (3,108,361)           --
Investment in Santee River
 Rubber ......................           --        (8,984,891)           --
Investment in WaterPure
 Corporation, net of cash
 acquired ....................           --          (266,472)           --
Investment in Egypt Projects .     (4,933,852)           --              --
Investment in Mediterranean
 Fiber Optic Project/GFG .....     (1,546,833)           --              --
Investment in United Kingdom
 Landfill Projects ...........    (16,667,567)           --              --
Distributions from Hydro
 projects ....................      1,403,240       1,135,526       1,006,257
Distributions from Santee
 River  Rubber ...............        920,000         340,274            --
Deferred due diligence costs .        399,498        (245,480)         65,901
                                 ------------    ------------    ------------
Net cash used in
 investing activities ........    (21,010,764)    (14,021,320)     (6,491,765)
                                 ------------    ------------    ------------
Cash flows from financing
 activities:
Proceeds from shareholders'
 contributions ...............         70,206      25,471,126      52,580,637
Selling commissions and
 offering costs paid .........         (2,344)     (2,526,410)    (11,278,816)
Cash distributions to
 shareholders ................     (3,944,169)     (4,130,434)     (1,412,481)
                                 ------------    ------------    ------------
Net cash (used in) provided
 by financing activities .....     (3,876,307)     18,814,282      39,889,340
                                 ------------    ------------    ------------

Net (decrease) increase in
 cash and cash equivalents ...    (28,073,057)      2,010,659      33,166,963
Cash and cash equivalents,
 beginning of year ...........     42,832,241      40,821,582       7,654,619
                                 ------------    ------------    ------------
Cash and cash equivalents,
 end of year .................   $ 14,759,184    $ 42,832,241    $ 40,821,582
                                 ------------    ------------    ------------

               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.

Income taxes
No provision is made for 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 the  respective  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.

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

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

3.       Investments

The Trust has the following investments:

                                   Accounting     Investment at December 31,
                                                   -------------------------
    Project Name                     Method           1999          1998
--------------------------------   -------------   -----------   -----------

Maine Hydro Projects ...........   Equity Method   $ 5,663,505   $ 6,217,289
Maine Biomass Projects .........   Equity Method     5,825,271     6,306,817
MetaSound Systems ..............   Equity Method       921,163     2,447,413
Quantum Conveyor ...............   Equity Method     2,810,410     3,096,170
Santee River Rubber ............   Equity Method     8,186,456     9,007,968
Egypt Projects .................   Equity Method     4,736,093          --
Mediterranean Fiber Optic
 Project/GFG ...................   Equity Method     1,497,670          --
United Kingdom Landfill Projects   Equity Method    16,916,309          --
WaterPure Corporation ..........   Consolidation     1,570,424     2,031,073
                                                   -----------   -----------
                                                   $48,127,301   $29,106,730
                                                   -----------   -----------

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 ("BHC") under long-term contracts. The purchase
price was $13,628,395, including transaction costs. In addition, Ridgewood Hydro
L.P.
assumed a long-term lease obligation of $1,004,679.

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 Corporation
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 $323,003,  $429,714
and $429,430 of expense under this arrangement during the periods ended December
31, 1999,  1998 and 1997,  respectively.  The agreement has a five-year term 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, 1999   December 31, 1998
                                -----------   -----------

Current assets ..............   $ 1,573,177   $ 1,346,077
Electric power sales contract    10,105,173    11,165,469
Other non-current assets ....     1,270,396     1,057,892
                                -----------   -----------
Total assets ................   $12,948,746   $13,569,438
                                -----------   -----------

Current liabilities .........   $ 1,621,737   $   438,443
Non-current liabilities .....          --         696,418
Partners' equity ............    11,327,009    12,434,577
                                -----------   -----------
Total liabilities and equity    $12,948,746   $13,569,438
                                -----------   -----------

Statement of Operations Information

                                 For the Year Ended December 31,
                            ----------------------------------------
                              1999            1998          1997
                            -----------    -----------   -----------

Revenue .................   $ 4,756,189    $ 4,511,361   $ 4,113,065
Total expenses ..........     3,002,245      3,217,846     2,952,589
Interest income (expense)       (55,033)        22,464      (117,056)
                            -----------    -----------   -----------
Net income ..............   $ 1,698,911    $ 1,315,979   $ 1,043,420
                            -----------    -----------   -----------

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
On July  1,  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  and  includes  transaction  costs of
$297,971. 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  had a power  sales
contract with the New England Power Pool,  which expired on August 31, 1997. The
facilities  were shut down in September  1997 and were  reactivated  in November
1997  to  sell  capacity  and  energy  to BHC  on a  month-to-month  basis.  The
facilities  were again 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  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 1999 and 1998, the Trust loaned  $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 also  made  identical  loans to the  Maine
Biomass Projects. The other Maine Biomass Project members also loaned $1,050,500
and $750,000 to the Maine Biomass Projects with the same terms in 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 July 1, 1997.

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 claim 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 are due to
the projects.  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, 1999    December 31, 1998
                               -----------    -----------

Current assets .............   $ 1,103,266    $   668,228
Non-current assets .........     3,154,813      3,339,584
                               -----------    -----------
Total assets ...............   $ 4,258,079    $ 4,007,812
                               -----------    -----------

Current liabilities ........   $ 4,394,990    $ 1,952,062
Members' equity ............      (136,911)     2,055,750
                               -----------    -----------
Total liabilities and equity   $ 4,258,079    $ 4,007,812
                               -----------    -----------

Statement of Operations Information

                                                          For the period from
             For the Year Ended   For the Year Ended   inception (April 1, 1997)
              December 31, 1999    December 31, 1998   to December 31, 1997
                 -----------         -----------          -----------

Revenue          $ 1,391,039          $ 1,430,296          $ 2,991,793
Expenses           3,583,700            2,847,896            4,376,458
                 -----------          -----------          -----------
Net loss         $(2,192,661)         $(1,417,600)         $(1,384,665)
                 -----------          -----------          -----------

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 the $2,525,040
required for the May 1999 exercise of the 4,676,000 share warrant. 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.

Summarized financial information for MetaSound Systems is as follows:

Balance Sheet Information

                        December 31, 1999   December 31, 1998
                               ----------   ----------

Current assets .............   $2,012,000   $2,678,000
Other non-current assets ...      382,000       70,000
                               ----------   ----------
Total assets ...............   $2,394,000   $2,748,000
                               ----------   ----------

Current liabilities ........   $1,486,000   $  738,000
Non-current liabilities ....      482,000      641,000
Members' equity ............      426,000    1,369,000
                               ----------   ----------
Total liabilities and equity   $2,394,000   $2,748,000
                               ----------   ----------

Statement of Operations Information

           For the Year Ended   For the Period December 1, 199
            December 31, 1999       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.

Summarized financial information for Quantum Conveyor is as follows:

Balance Sheet Information

                                       December 31,
                               ----------------------------
                                   1999            1998
                               ------------    ------------
Current assets .............   $  1,691,186    $  2,022,126
Non-current assets .........      5,265,476       5,395,560
                               ------------    ------------
Total assets ...............   $  6,956,662    $  7,417,686
                               ------------    ------------

Current liabilities ........   $  1,349,781    $    852,160
Non-current liabilities ....     10,291,596       7,260,336
Members' deficit ...........     (4,684,715)       (694,810)
                               ------------    ------------
Total liabilities and equity   $  6,956,662    $  7,417,686
                               ------------    ------------

Statement of Operations Information

     For the Year Ended December    For the Period August 20, 1998
                  31, 1999          to December 31, 1998
                 -----------          -----------

Revenue          $ 2,619,559          $   437,806
Expenses           6,621,965            1,222,616
                 -----------          -----------
Net loss         $(4,002,406)        $  (784,810)
                 -----------          -----------

Santee River Rubber
In August 1998, the Trust and Trust IV purchased preferred  membership interests
in Santee River Rubber Company,  LLC, a newly  organized South Carolina  limited
liability  company  ("Santee River  Rubber").  Santee River Rubber is building a
waste  tire and  rubber  processing  facility  located  near  Charleston,  South
Carolina.  The Trust  and Trust IV  purchased  the  interests  through a limited
liability  company owned  two-thirds by the Trust and one-third 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 or until the facility  begins  operations,  which ever occurs
first,  Santee  River Rubber will pay the Trust and Trust IV interest at 12% per
year on $11,000,000 of their investment.  After operations begin, the Trusts are
entitled  to receive all cash flow after  payment of debt and other  obligations
until the Trusts  receive a  cumulative  20% return on their  total  investment.
Thereafter,  the Trusts  receive 25% of any  remaining  cash flow  available for
distribution.  All cash  distributions and tax allocations  received from Santee
River Rubber are shared two-thirds by the Trust and one-third by Trust IV.

The Trusts have the right to  designate  two of the five members of the board of
directors of Santee  River  Rubber and have the further  right to remove a third
member and designate a successor in the event of certain  defaults  under Santee
River Rubber's operating agreement.  The remaining equity interest is owned by a
wholly-owned subsidiary of Environmental Processing Systems, Inc. of New York.

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.

The project has been designed to receive and process waste tires and other waste
rubber  products and produce fine crumb rubber of various sizes.  The processing
will  include  both  ambient and  cryogenic  processing  equipment  using liquid
nitrogen.  Santee River Rubber  anticipates  that the final product will be fine
crumb  rubber  that can be used to  manufacture  new tires or to replace  virgin
rubber in many applications.

Santee River Rubber has entered into long-term  agreements for the supply of its
requirements  for waste tires,  electricity  and liquid  nitrogen.  Santee River
Rubber has entered  into  short-term  (ranging  from one to three  years)  crumb
rubber sales  contracts for a portion of the facility's  output.  The agreements
are contingent upon successful testing of the facility's output.

The Trust's  investment in Santee River Rubber is accounted for under the equity
method of accounting.  The Trust's equity in the loss of Santee River Rubber has
been included in the financial statements since August 19, 1998.

Summarized financial information for Santee River Rubber is as follows:

         Balance Sheet Information

                         December 31, 1999   December 31, 1998
                               -----------   -----------

Current assets .............   $ 1,910,190   $24,403,190
Construction in progress ...    32,899,358    15,392,656
Other non-current assets ...     4,685,995     4,761,119
                               -----------   -----------
Total assets ...............   $39,495,543   $44,556,965
                               -----------   -----------

Liabilities ................   $34,576,964   $34,885,357
Members' equity ............     4,918,579     9,671,608
                               -----------   -----------
Total liabilities and equity   $39,495,543   $44,556,965
                               -----------   -----------

         Statement of Operations Information

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

Revenue          $     7,975          $      --
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, 1999, the Trust and the Growth Fund each contributed  $4,933,852 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, 1999
                                            ----------------------------

Current assets                                               $  719,794
Non-current assets                                            9,567,984
                                            ----------------------------
Total assets                                               $ 10,287,778
                                            ----------------------------

Liabilities                                                  $  815,592
Shareholders' equity                                          9,472,186
                                            ----------------------------
Liabilities and shareholders' equity                       $ 10,287,778
                                            ----------------------------

Statement of Operations Information

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

Interest income                                               $  7,794
Expenses                                                       403,312
                                            ----------------------------
Net loss                                                    $ (395,518)
                                            ----------------------------

Mediterranean Fiber Optic Project/GFG
In  September  1999,  the Trust and the Growth Fund made a joint  investment  of
$3,000,000 in Global Fiber Group ("GFG"),  which is 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,  provides for a 25% ownership  interest in GFG and the right to
invest in projects  developed by GFG.  The Trust and the Growth Fund  anticipate
equally  funding an $18,000,000  joint venture  investment in the  Mediterranean
Fiber Optic Project in the second quarter of 2000.

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

Summarized financial information for GFG is as follows:

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  another 20 landfill gas plants in
Great Britain.  The estimated cost of the package of completed plants and the 20
developmental  sites,  if all the  developmental  plants are built and the Trust
elects to acquire  them,  is $36 to $38  million.  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 accounts for these projects using the equity
method because its ability to exercise  control over the projects is expected to
be temporary due to the anticipated investment of the Growth Fund.

The first six 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.

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

                                                   Six Months Ended
                                                  December 31, 1999
                                               -----------------------

Revenues                                                  $ 2,862,290
Expenses                                                    2,681,969
                                               -----------------------
Net income                                                  $ 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 has been
written-off in the statement of operations 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.

Summarized financial information for WaterPure Corporation, which is included in
these consolidated financial statements, is as follows:

Balance Sheet Information

                                December 31, 1999   December 31, 1998
                                       ----------   ----------

Current assets .....................   $2,867,283   $3,761,246
Non-current assets .................      225,990         --
                                       ----------   ----------
Total assets .......................   $3,093,273   $3,761,246
                                       ----------   ----------

Liabilities ........................   $  185,080   $     --
Shareholders' equity ...............    2,908,193    3,761,246
                                       ----------   ----------
Liabilities and shareholders' equity   $3,093,273   $3,761,246
                                       ----------   ----------

Statement of Operations Information

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

Interest income ............................   $   165,503    $    58,121
Write-off purchased research and development          --        1,969,951
Other expenses .............................     1,061,438             89
                                                              -----------
                                                              -----------
Net loss ...................................   $  (895,935)   $(1,911,919)
                                               -----------    -----------

4.       Line of Credit Facility

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. 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, 1999 and 1998, there were no borrowings
outstanding under the facility.

5.       Fair Value of Financial Instruments

At  December  31,  1999  and  1998,  the  carrying  value of the  Trust's  cash,
receivables and accounts payable approximates their fair value.

6.       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,  1998 and 1997,  the Trust paid fees for these  services  to the  managing
shareholder of $2,100, $1,020,474 and $4,562,147,  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 and 1997, the Trust paid  investment fees
to the managing shareholder of $337,158 and $1,145,212, respectively.

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, 1999 and
1998, the Trust paid management fees of $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 and 1997, the managing shareholder charged $793,654
and $392,752, respectively, 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, 1999.

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,  1999,  Ridgewood  Securities  Corporation,  an
affiliate of the managing shareholder,  earned commissions and placement fees of
$1,016,287.

7.       Preferred Participation Rights

Preferred Participation Rights were given to each shareholder whose subscription
was fully  completed and paid for and accepted  prior to October 31, 1996.  Each
Preferred  Participation Right entitles the holder to an aggregate  distribution
priority of $1,000.  The number of  Preferred  Participation  Rights  earned per
investor  share was equal to the number of whole or partial months from the date
of the acceptance of the subscription to December 31, 1996.
A total of 865.08 Preferred Participation Rights were issued.

During 1996 and 1997, cash distributions were first allocated 99% to the holders
of  Preferred  Participation  Rights and 1% to the  managing  shareholder  until
shareholders  received in each year  distributions  equal to $500 for each Right
earned.

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, 1999, 1998 and 1997

<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, 1999 and 1998, and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United States.  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,  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 the opinion expressed above.


PricewaterhouseCoopers LLP
New York, NY
March 24, 2000


<PAGE>

Ridgewood Maine Hydro Partners, L.P.
Balance Sheet
------------------------------------------------------------------------------

                                                        December 31,
                                                 ---------------------------
                                                     1999           1998
                                                 ------------    -----------
Assets:
Cash and cash equivalents ....................   $    408,835    $    607,119
Accounts receivable, trade ...................      1,021,480         574,022
Due from affiliates ..........................           --            87,369
Prepaid and other current assets .............        142,862          77,567
                                                 ------------    ------------
     Total current assets ....................      1,573,177       1,346,077

Property, plant and equipment ................      1,349,024       1,089,248
Accumulated depreciation .....................        (78,628)        (31,356)
                                                 ------------    ------------
     Property, plant and equipment, net ......      1,270,396       1,057,892
                                                 ------------    ------------

Electric power sales contracts ...............     13,311,374      13,311,374
Accumulated amortization .....................     (3,206,201)     (2,145,905)
                                                 ------------    ------------
     Electric power sales contracts, net .....     10,105,173      11,165,469
                                                 ------------    ------------

     Total assets ............................   $ 12,948,746    $ 13,569,438
                                                 ------------    ------------

Liabilities and Partners' Equity:
Liabilities:
Accounts payable and accrued expenses ........   $     38,285    $    197,799
Due to affiliates ............................        799,905            --
Current portion of long-term lease obligations        783,547         240,644
                                                 ------------    ------------
     Total current liabilities ...............      1,621,737         438,443

Non-current portion of long-term
  lease obligations ..........................           --           696,418
                                                 ------------    ------------

Commitments and contingencies

Partners' equity:
General partner ..............................        103,548         114,624
Limited partners .............................     11,223,461      12,319,953
                                                 ------------    ------------

     Total partners' equity ..................     11,327,009      12,434,577
                                                 ------------    ------------

     Total liabilities and partners' equity ..   $ 12,948,746    $ 13,569,438
                                                 ------------    ------------




               See accompanying notes to the financial statements.

<PAGE>

Ridgewood Maine Hydro Partners, L.P.
Statement of Operations
-------------------------------------------------------------------------------

                                           Year Ended December 31,
                                   -----------------------------------------
                                      1999           1998            1997
                                   -----------    -----------    -----------

Net sales ......................   $ 4,756,189    $ 4,511,361    $ 4,113,065
                                   -----------    -----------    -----------

Operating expenses:
   Depreciation and amortization     1,107,568      1,089,969      1,062,838
   Labor .......................       565,015        592,812        549,289
   Insurance ...................       177,333        194,458        246,665
   Property taxes ..............       252,611        267,046        258,953
   Contract management .........       323,003        429,714        429,430
   Other expenses ..............       576,715        643,847        405,414
                                   -----------    -----------    -----------
                                     3,002,245      3,217,846      2,952,589
                                   -----------    -----------    -----------

Income from operations .........     1,753,944      1,293,515      1,160,476
                                   -----------    -----------    -----------

Other income (expense):
Interest income ................        42,852        153,983         30,812
Interest expense ...............      (112,885)      (131,519)      (147,868)
Other income ...................        15,000           --             --
                                   -----------    -----------    -----------
     Other income (expense), net       (55,033)        22,464       (117,056)
                                   -----------    -----------    -----------

Net income .....................   $ 1,698,911    $ 1,315,979    $ 1,043,420
                                   -----------    -----------    -----------



               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, 1999, 1998 and 1997
--------------------------------------------------------------------------------


                              Limited          General
                              Partners         Partner          Total
                             ------------    ------------    ------------
Partners' equity, January
 1, 1997 .................   $ 13,692,976    $    133,866    $ 13,826,842

Additional contributions .        531,906            --           531,906

Cash distributions .......     (1,992,391)        (20,125)     (2,012,516)

Net income for the year ..      1,032,986          10,434       1,043,420
                             ------------    ------------    ------------
Partners' equity, December
 31, 1997 ................     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
                             ------------    ------------    ------------



               See accompanying notes to the financial statements.


<PAGE>

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

                                               Year Ended December 31,
                                      -----------------------------------------
                                          1999          1998           1997
                                      -----------    -----------    -----------
Cash flows from operating
 activities:
Net income ........................   $ 1,698,911    $ 1,315,979    $ 1,043,420
                                      -----------    -----------    -----------
Adjustments to reconcile net income
 to net cash flows from operating
 activities:
 Depreciation and amortization ....     1,107,568      1,089,969      1,062,838
 Changes in assets and liabilities:
  (Increase) decrease in accounts
   receivable .....................      (447,458)      (105,371)       529,205
  (Increase) decrease in prepaid
   and other current assets .......       (65,295)        11,832        (41,716)
  Decrease (increase) in due
   to/from affiliates, net ........       887,274         16,281       (303,259)
  (Decrease) increase in accounts
   payable and accrued expenses ...      (159,514)        40,782       (505,122)
                                      -----------    -----------    -----------
Total adjustments .................     1,322,575      1,053,493        741,946
                                      -----------    -----------    -----------
Net cash provided by operating
 activities .......................     3,021,486      2,369,472      1,785,366
                                      -----------    -----------    -----------

Cash flows from investing
 activities:
Payments to purchase Maine
 Hydro Projects ...................          --             --         (323,217)
Capital expenditures ..............      (259,776)      (752,613)      (336,635)
                                      -----------    -----------    -----------
Net cash used in investing
 activities .......................      (259,776)      (752,613)      (659,852)
                                      -----------    -----------    -----------

Cash flows from financing
 activities:
Cash contributed by partners ......          --             --          531,906
Cash distributions to partners ....    (2,806,479)    (2,271,054)    (2,012,516)
Return of  deposits ...............          --          800,000           --
Payments to reduce long-term
 lease obligations ................      (153,515)      (134,894)      (118,532)
                                      -----------    -----------    -----------
Net cash used in financing
 activities .......................    (2,959,994)    (1,605,948)    (1,599,142)
                                      -----------    -----------    -----------

Net (decrease) increase in cash
 and cash equivalents .............      (198,284)        10,911       (473,628)

Cash and cash equivalents,
 beginning of year ................       607,119        596,208      1,069,836
                                      -----------    -----------    -----------
Cash and cash equivalents, end
 of year ..........................   $   408,835    $   607,119    $   596,208
                                      -----------    -----------    -----------


               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 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.

Depreciation is recorded using the straight-line method over the useful lives of
the assets,  which vary from 3 to 20 years.  During the year ended  December 31,
1999, 1998 and 1997, the Partnership  recorded  depreciation expense of $47,272,
$29,673 and $1,683, 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 the periods ended December
31,  1999,  1998 and 1997,  the  Partnership  recorded  amortization  expense of
$1,060,296, $1,060,296 and $1,061,155, respectively.

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.

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

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  has 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 has the
right to terminate the Agreement  and purchase the  hydroelectric  facility upon
proper  notice and payment of a scheduled  close-out  amount,  which  reduces to
$750,000 at April 30, 2000. This lease is accounted for as a capital lease,  and
accordingly, the estimated lease obligation of $783,547 has been recorded in the
accompanying balance sheet.

4.       Lease Commitments

The  Partnership  leases the sites of two of its  hydroelectric  projects  under
operating  leases expiring in June 2078. Total monthly payments in 1999 were the
greater of $1,236 or a percentage of the revenue from the hydroelectric project.
At December 31, 1999, the future minimum  rental  payments  required under these
leases are as follows:

                                    2000                    $  14,832
                                    2001                       14,832
                                    2002                       14,832
                                    2003                       14,832
                                    2004                       14,832
                                    Thereafter              1,090,152
                                                    ------------------
                                                          $ 1,164,312
                                                    ------------------

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, 1999 and 1998,  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.
(formerly  Consolidated  Hydro,  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 $323,003,  $429,714 and $429,430 of expense
under this  arrangement  during the periods  ended  December 31, 1999,  1998 and
1997, 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, 1999, 1998 and 1997


<PAGE>



                        Report of Independent Accountants


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

   In our opinion, the accompanying balance sheets and the related statements of
   operations,  changes in members'  (deficit)  equity 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, 1999 and 1998, and the results
   of its  operations and its cash flows for each of the two years in the period
   ended  December  31, 1999 and the period  April 1, 1997  (inception)  through
   December  31,  1997,  in  conformity  with  accounting  principles  generally
   accepted  in  the  United  States.   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,  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 the opinion expressed above.

   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 24, 2000

<PAGE>





Indeck Maine Energy, L.L.C.
Balance Sheet
--------------------------------------------------------------------------------

                                                     December 31,
                                             --------------------------
                                                1999             1998
                                             -----------    -----------
Assets:
Cash and cash equivalents ................   $   656,442    $    93,748
Accounts receivable ......................       274,362        185,808
Inventories ..............................       145,198        278,704
Prepaid expenses .........................        27,264        109,968
                                             -----------    -----------

   Total current assets ..................     1,103,266        668,228
                                             -----------    -----------

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 ..............      (435,869)      (264,380)
                                             -----------    -----------
                                               2,981,994      3,153,483
                                             -----------    -----------

Intangible assets ........................       206,577        206,577
Accumulated amortization .................       (33,758)       (20,476)
                                             -----------    -----------
                                                 172,819        186,101
                                             -----------    -----------

     Total assets ........................   $ 4,258,079    $ 4,007,812
                                             -----------    -----------

Liabilities and Members' (Deficit) Equity:
Liabilities:
Accounts payable and accrued expenses ....   $   426,001    $   327,062
Due to affiliates ........................       267,989           --
Management fee payable ...................       100,000        125,000
Notes payable to Members .................     3,601,000      1,500,000
                                             -----------    -----------

     Total current liabilities ...........     4,394,990      1,952,062

Commitments and contingencies

Total Members' (deficit) equity ..........      (136,911)     2,055,750
                                             -----------    -----------
     Total liabilities and members'
      (deficit) equity ...................   $ 4,258,079    $ 4,007,812
                                             -----------    -----------




                See accompanying notes to the financial statement

<PAGE>

Indeck Maine Energy, L.L.C.
Statement of Operations
--------------------------------------------------------------------------------

                                                              For the
                                                            period from
                                                             inception
                                For the         For the       April 1,
                               year ended     year ended      1997) to
                                December       December       December
                                31, 1999       31, 1998       31, 1997
                              -----------    -----------    -----------

Revenues ..................   $ 1,391,039    $ 1,430,296    $ 2,991,793

Operating expenses ........     3,478,842      2,800,185      4,399,670
                              -----------    -----------    -----------

   Loss from operations ...    (2,087,803)    (1,369,889)    (1,407,877)

Other (expense) income, net      (104,858)       (47,711)        23,212
                              -----------    -----------    -----------

   Net loss ...............   $(2,192,661)   $(1,417,600)   $(1,384,665)
                              -----------    -----------    -----------





               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,  1999 and 1998 and the period from  inception
(April 1, 1997) to December 31, 1997
--------------------------------------------------------------------------------

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

Initial contributions ............   $     1,000    $ 4,857,015    $ 4,858,015

Net loss .........................          --       (1,384,665)    (1,384,665)
                                     -----------    -----------    -----------

Members' equity, December 31, 1997         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' equity (deficit),
 December 31, 1999 ...............   $      --      $  (136,911)   $  (136,911)
                                     -----------    -----------    -----------





               See accompanying notes to the financial statements.


<PAGE>


Indeck Maine Energy, L.L.C.
Statement of Cash Flows
--------------------------------------------------------------------------------

                                                                  For the
                                                                period from
                                                                 inception
                                    For the         For the       April 1,
                                   year ended     year ended      1997) to
                                    December       December       December
                                    31, 1999       31, 1998       31, 1997
                                  -----------    -----------    -----------
Cash flows from operating
 activities
 Net loss ......................   $(2,192,661)   $(1,417,600)   $(1,384,665)
                                   -----------    -----------    -----------
 Adjustments to reconcile net
  loss to net cash flows
  used in operating activities
  Depreciation and amortization        184,771        184,771        100,085
  Changes in assets and
   liabilities:
  (Increase) decrease in
   accounts receivable .........       (88,554)       205,704       (391,512)
  Decrease (increase) in
   inventories .................       133,506         71,955       (350,659)
  Decrease (increase) in
   prepaid expenses ............        82,704        (91,424)       (18,544)
  Increase (decrease) in
   accounts payable and accrued
   expenses ....................        98,939       (560,621)       887,683
  Increase in due to affiliates        267,989           --             --
  (Decrease) increase in
   management fee payable ......       (25,000)       100,000         25,000
                                   -----------    -----------    -----------
  Total adjustments ............       654,355        (89,615)       252,053
                                   -----------    -----------    -----------
Net cash used in operating
 activities ....................    (1,538,306)    (1,507,215)    (1,132,612)
                                   -----------    -----------    -----------

Cash flows from investing
 activities
Capital expenditures ...........          --             --         (604,757)
Acquisition of intangible assets          --             --          (19,683)
                                   -----------    -----------    -----------
Net cash used in investing
 activities ....................          --             --         (624,440)
                                   -----------    -----------    -----------

Cash flows from financing
 activities
Capital contributions ..........          --             --        4,858,015
Payment of note payable -
 affiliate .....................          --             --       (3,300,000)
Issuance of notes payable ......     2,101,000      1,500,000        300,000
                                   -----------    -----------    -----------
Net cash provided by financing
 activities ....................     2,101,000      1,500,000      1,858,015
                                   -----------    -----------    -----------

Net increase (decrease) in cash
 and cash equivalents ..........       562,694         (7,215)       100,963

Cash and cash equivalents,
 beginning of period ...........        93,748        100,963           --
                                   -----------    -----------    -----------

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

Non-cash  activities:  On April 1,  1997,  land,  power  generation  facilities,
equipment  and  intangible  assets  were  acquired  from Indeck  Power  Overseas
Limited,  a related  entity,  for  $3,000,000  through  the  issuance  of a note
payable.



               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 the years ended
December  31,  1999 and 1998 and the period  from  inception  (April 1, 1997) to
December  31,  1997,  the Company  recorded  depreciation  expense of  $171,489,
$171,489 and $92,891, respectively.

Intangible assets
Intangible assets are amortized over 20 years on a straight-line  basis.  During
the years ended December 31, 1999 and 1998 and the period from inception  (April
1, 1997) to December  31, 1997,  the Company  recorded  amortization  expense of
$13,282, $13,282 and $7,194.

Significant Customers
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.

3.       Notes Payable

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

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

Note payable to Ridgewood Maine, LLC
  (a Member), due on demand with interest
  at 5% .................................    1,800,500
                                            ----------

                                            $3,601,000
                                            ----------

4.       Operating Status

Both projects have temporarily  suspended  operations;  one in December 1997 and
the other in January  1998.  It is  management's  intent  not to  operate  these
facilities,  except during periods of peak demand,  until profitable power sales
contracts can be negotiated.  Management is currently negotiating contracts with
various  utility  companies  and expects to commence  operations in late 2000 or
2001. 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
$50,000 in 1997 and $100,000 per year thereafter.  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, 1999 or 1998.

The Company incurred  expenses of approximately  $770,000 and $1,189,000 for the
year ended December 31, 1998 and for the period from  inception  (April 1, 1997)
through December 31, 1997, respectively, 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.  At
December  31,  1998,  approximately  $57,000 of these  charges  were in accounts
payable.

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 year  ended  December  31,  1999,  Ridgewood  Management
charged the Company  $197,825 for overhead items allocated based on time records
and  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.       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.  The Company has not  recorded any of the disputed
revenues in the financial statements and it is too early to estimate the outcome
of the dispute.
<PAGE>
                                Ridgewood UK, LLC

                        Consolidated Financial Statements

                                December 31, 1999
<PAGE>


                        Report of Independent Accountants


To the Member of Ridgewood UK, LLC:

In our opinion,  the  accompanying  consolidated  balance  sheet 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, 1999, and the results of their  operations and their cash flows for
the period May 27, 1999 through December 31, 1999, in conformity with accounting
principles  generally accepted in the United States.  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,  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 the opinion  expressed
above.



PricewaterhouseCoopers LLP
New York, NY
March 24, 2000

<PAGE>
Ridgewood UK, LLC
Consolidated Balance Sheet
--------------------------------------------------------------------------------


                                                               December 31, 1999
                                                                   ------------
Assets:
Cash and cash equivalents .................................        $  3,378,123
Accounts receivable, trade ................................           1,389,285
Accounts receivable, other ................................           1,321,594
                                                                   ------------
     Total current assets .................................           6,089,003
                                                                   ------------

Plant and equipment .......................................          13,601,629
Less - Accumulated depreciation ...........................            (272,870)
                                                                   ------------
      Plant and equipment, net ............................          13,328,759
                                                                   ------------

Electric power sales contract .............................          11,637,924
Less - Accumulated amortization ...........................            (372,303)
                                                                   ------------
       Electric power sales contract, net .................          11,265,621
                                                                   ------------

     Total assets .........................................        $ 30,683,382
                                                                   ------------


Liabilities and Member's Equity:

Liabilities:
Current portion of long-term debt .........................        $    481,898
Accounts payable and accrued expenses .....................           4,122,728
                                                                   ------------
     Total current liabilities ............................           4,604,626

Long-term debt, less current portion ......................           8,701,569
Deferred income taxes .....................................             460,878

Commitments and contingencies

Member's equity ...........................................          16,916,309
                                                                   ------------

     Total liabilities and member's equity ................        $ 30,683,382
                                                                   ------------












        See accompanying notes to the consolidated financial statements.

<PAGE>



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

                                                             For the Period From
                                                               May 27, 1999 to
                                                               December 31, 1999
                                                                    -----------

Revenue ..................................................          $ 2,862,290

Cost of sales ............................................            1,595,189
                                                                    -----------

Gross profit .............................................            1,267,101

General and administrative expenses ......................              539,811
                                                                    -----------

Income from operations ...................................              727,290

Other income (expense):
     Interest income .....................................               30,708
     Interest expense ....................................             (271,522)
                                                                    -----------

Income before taxes ......................................              486,476

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

Net income ...............................................              180,321

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

Comprehensive income .....................................          $   248,742
                                                                    -----------


























        See accompanying notes to the consolidated financial statements.

<PAGE>



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


Initial capital contribution .............................           $16,667,567

Net income for the year ..................................               180,321

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

Member's equity, December 31, 1999 .......................           $16,916,309
                                                                     -----------








































        See accompanying notes to the consolidated financial statements.

<PAGE>



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

                                                          For the Period From
                                                            May 27, 1999 to
                                                           December 31, 1999
                                                               ------------
Cash flows from operating activities:
Net income .................................................   $    180,321
                                                               ------------
Adjustments to reconcile net income to cash
 flows from operating activities:
   Depreciation and amortization ...........................        645,173
   Changes in assets and liabilities, net of assets acquired
     Increase in accounts receivable, trade ................       (371,375)
     Increase in accounts receivable, other ................     (1,315,062)
     Increase in accounts payable and accrued expenses .....      3,652,266
     Increase in deferred taxes ............................        460,113
                                                               ------------
       Total adjustments ...................................      3,071,115
                                                               ------------
       Net cash provided by operating activities ...........      3,251,436
                                                               ------------

Cash flows from investing activities:
Cash used to purchase landfill gas fired projects ..........    (16,436,548)
                                                               ------------
       Net cash used in investing activities ...............    (16,436,548)
                                                               ------------

Cash flows from financing activities:
Payment of bank debt .......................................       (104,332)
Cash contributions .........................................     16,667,567
                                                               ------------
       Net cash provided by financing activities ...........     16,563,235
                                                               ------------
Net increase in cash and cash
 equivalents and balance at end of period ..................   $  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 first six 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  maturaties  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 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 period
from May 27, 1999 to  December  31,  1999,  the  Company  recorded  depreciation
expense of $272,870.

Intangible asset
A portion of the purchase  price of the  Providence  Project 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.  During the period from May 27, 1999 to
December 31, 1999, the Company recorded amortization expense of $372,303.

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
deferred  United  Kingdom  income  taxes of $306,155 for the period from May 27,
1999 to December 31, 1999.

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, 1999:

Bank loan payable                               $9,183,467
Less - Current maturity                           (481,898)
                                      ----------------------
Total long-term debt                            $8,701,569
                                      ----------------------

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% (7.5625% at December 31, 1999). 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

                                      2000                    481,898
                                      2001                    533,358
                                      2002                    590,469
                                      2003                    653,388
                                      2004                    724,051

4.       Fair Value of Financial Instruments

At December  31, 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
five  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 as many as 20  additional  landfill  gas plants in
Great Britain as may be feasible 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  finance 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. The estimated cost of the 20 developmental sites, if all the
developmental plants are built and the Company elects to acquire them, is $20 to
$22  million.  The Company  expects  that The  Ridgewood  Power Growth Fund (the
"Growth Fund") will supply any remaining  required  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.