==============================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                      For the quarter ended March 31, 2005
                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

                        -------------------------------
<TABLE>
<CAPTION>


<S>   <C>               <C>                         <C>               <C>
      0001261679         MSW Energy Holdings LLC       Delaware        14-1873119
      0001261680         MSW Energy Finance Co.,       Delaware        20-0047886
                                  Inc.
Commission File Number     (Exact name of each     (State or other  (I.R.S. Employer
                       registrant as specified in  jurisdiction of   Identification
                              its charter)         incorporation or      Number)
                                                    organization)
</TABLE>

                        c/o American Ref-Fuel Company LLC
                             155 Chestnut Ridge Road
                           Montvale , New Jersey 07645
                             Phone No. 800-727-3835
               (Address, including zip code, and telephone number,
                    including area code, of the registrants'
                          principal executive offices)

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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act):

MSW Energy Holdings LLC:         yes  [  ]   no  [X]
MSW Energy Finance Co., Inc:     yes  [  ]   no  [X]

 Indicate the number of shares outstanding of each of the registrants' classes
of common stock, as of the latest practicable date.

MSW Energy Holdings LLC:     None
MSW Energy Finance Co., Inc:  100 shares of Common Stock

Documents Incorporated by Reference:  None

MSW Energy Finance Co., Inc. meets the conditions set forth in General
Instruction H 1(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q
with the reduced disclosure format.


                                       1
<PAGE>

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
<S>                                                                                            <C>
Part I  FINANCIAL INFORMATION....................................................................3

Item 1. Consolidated Financial Statements........................................................3

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations..20

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.............................29

Item 4.  Controls and Procedures................................................................31

PART II  OTHER INFORMATION......................................................................32

Item 1.  Legal Proceedings......................................................................32

Item 2.  Unregistered Sale of Equity Securities and Use of Proceeds.............................33

Item 3.  Defaults Upon Senior Securities........................................................33

Item 4.  Submission of Matters to a Vote of Security Holders....................................33

Item 5.  Other Information......................................................................33

Item 6.  Exhibits...............................................................................34
</TABLE>


SIGNATURES


SAFE HARBOR STATEMENT
This Form 10-Q contains "forward-looking statements" intended to qualify for
safe harbor from liability established by the Private Securities Litigation
Reform Act of 1995. Forward-looking statements should be read with the
cautionary statements and important factors included in this Form 10-Q at Part
I, Item 2- "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Risk Factors." Forward-looking statements are all
statements other than statements of historical fact, including without
limitation those that are identified by the use of the words "anticipates,"
"estimates," "expects," "intends," "plans," "predicts" and similar expressions.




                                       2
<PAGE>




Part I  FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements






                                       3
<PAGE>


                    MSW ENERGY HOLDINGS LLC AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                            (Unaudited, in thousands)

<TABLE>
<CAPTION>
                  Assets
                                                                         March 31, 2005  December 31, 2004
                                                                         --------------  -----------------
Current assets
<S>                                                                       <C>                <C>
   Cash and cash equivalents                                              $   49,243         $   86,310
   Restricted cash and short-term investments                                 46,592             64,703
   Accounts receivable, net of allowance for doubtful accounts of
      $1,317 and $1,491, respectively                                         68,241             72,027
   Prepaid expenses and other current assets                                  15,892             12,426
                                                                          ----------         ----------
Total current assets                                                         179,968            235,466
                                                                          ----------         ----------

Long-term assets
   Property, plant and equipment, net                                      1,185,048          1,187,178
   Intangible assets, net                                                    519,050            535,134
   Goodwill                                                                    2,175              2,175
   Restricted cash and long-term investments                                  92,389             90,972
   Other long-term assets                                                     11,755              4,806
                                                                          ----------         ----------
Total long-term assets                                                     1,810,417          1,820,265
                                                                          ----------         ----------
Total assets                                                              $1,990,385         $2,055,731
                                                                          ==========         ==========

                  Liabilities and Members' Equity

Current liabilities
   Accounts payable and other current liabilities                         $   48,915         $   44,979
   Current portion of long-term debt                                          75,713             87,184
   Accrued interest payable                                                   20,321             16,583
   Income taxes payable                                                         --                   22
                                                                          ----------         ----------
Total current liabilities                                                    144,949            148,768
                                                                          ----------         ----------

Long-term liabilities
   Long-term debt                                                          1,138,093          1,158,829
   Other long-term liabilities                                               219,933            224,619
   Deferred taxes                                                             32,438             27,044
                                                                          ----------         ----------
Total long-term liabilities                                                1,390,464          1,410,492
                                                                          ----------         ----------
Total  liabilities                                                         1,535,413          1,559,260
                                                                          ----------         ----------

Commitments and contingencies (Notes 10 and 11)

Minority interest in consolidated subsidiary                                 349,646            365,123
                                                                          ----------         ----------

Members' equity
     Total members' equity                                                   105,326            131,348
                                                                          ----------         ----------
Total liabilities and members' equity                                     $1,990,385         $2,055,731
                                                                          ==========         ===========
</TABLE>

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



                                       4
<PAGE>




                    MSW ENERGY HOLDINGS LLC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                            (Unaudited, in thousands)

<TABLE>
<CAPTION>
                                                                   For the Three       For the Three
                                                                    Months Ended        Months Ended
                                                                       March 31,         March 31,
                                                                        2005               2004
                                                                     ----------          ---------
Revenues
<S>                                                                   <C>                <C>
   Waste disposal and related services                                $  64,639          $    --
   Energy                                                                32,388               --
   Other                                                                  3,204               --
                                                                      ---------          ---------
       Total net revenues                                               100,231               --
Expenses
   Operating                                                             52,794               --
   Depreciation and amortization                                         16,736               --
   General and administrative                                            11,030               --
   Loss on asset retirements                                              1,386               --
                                                                      ---------          ---------
       Operating income                                                  18,285               --

Interest income                                                           1,130                 28

Interest expense                                                        (16,913)            (5,055)

Equity in net earnings of unconsolidated affiliate - Ref-Fuel

   Holdings                                                                 --               4,539

Minority interests in net income of subsidiaries                         (4,101)              --

Other income (expense), net                                                 360               (473)
                                                                      ---------          ---------
     Loss before income taxes                                            (1,239)              (961)

Income tax benefit                                                          519               --
                                                                      ---------          ---------
Net loss                                                              $    (720)         $    (961)
                                                                      =========          =========
</TABLE>

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



                                       5
<PAGE>




                    MSW ENERGY HOLDINGS LLC AND SUBSIDIARIES
                    CONSOLIDATED STATEMENT OF MEMBERS' EQUITY

                            (Unaudited, in thousands)

<TABLE>
<CAPTION>
                                                                   Accumulated Other
                                         Members' Interests      Comprehensive Income           Total
                                         --------------------    ---------------------     ---------------
<S>                                          <C>                    <C>                    <C>
Balance, January 1, 2004                       $ 160,111              $    --                $ 160,111
   Assumption of tax                             (14,892)                  --                  (14,892)
   liability
   Current tax benefit contributed
     to member                                    (3,463)                  --                   (3,463)
   Distribution to members                       (29,355)                  --                  (29,355)
   Unrealized gain on investments
   from the consolidation of
   Ref-Fuel Holdings                                --                      211                    211
   Comprehensive income                           18,947                   (211)                18,736
                                               ---------              ---------              ---------
Balance, December 31, 2005                       131,348                   --                  131,348
   Distribution to members                       (25,302)                  --                  (25,302)
   Net loss                                         (720)                  --                     (720)
                                               ---------              ---------              ---------
Balance, March 31, 2005
                                               $ 105,326              $    --                $ 105,326
                                               =========              =========              =========
</TABLE>



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




                                       6
<PAGE>




                    MSW ENERGY HOLDINGS LLC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS

                            (Unaudited, in thousands)

<TABLE>
<CAPTION>
                                                                  For the Three         For the Three
                                                                  Months Ended          Months Ended
                                                                 March 31, 2005         March 31, 2004
                                                               --------------------   ------------------
Cash flows from operating activities

<S>                                                                <C>                   <C>
  Net (loss)                                                       $   (720)             $   (961)
   Adjustments to reconcile net loss to net cash provided by
      operating activities:
     Depreciation and amortization                                   26,124                   293
    Deferred taxes                                                    5,394                  --
    Revenue contract levelization                                       328                  --
    Equity earnings in unconsolidated affiliate - Ref-Fuel
            Holdings                                                   --                  (4,539)
    Interest on loss contract                                           547                   512
    Distributions from unconsolidated affiliate -
         Ref-Fuel Holdings                                             --                  23,904
    Loss on asset retirements                                         1,386                  --
    Minority interest in consolidated subsidiaries                    4,101                  --

  Changes in assets and liabilities:
    Accounts receivable, net                                          3,786                  --
    Prepaid expenses and other current assets                        (3,466)                   38
    Other long-term assets                                           (6,902)                 --
    Accounts payable and current liabilities                          3,936                  (406)
    Accounts payable affiliates                                        --                    (230)
    Taxes payable                                                       (22)                 --
    Accrued interest payable                                          3,738                (4,250)
    Other long-term liabilities                                      (1,915)                 --
                                                                   --------              --------
Net cash provided by operating activities                            36,315                14,361
                                                                   --------              --------
Cash flows from investing activities
    Change in restricted cash and investments, net                   16,694                     1
    Additions of property, plant and equipment                      (17,076)                 --
      Proceeds from sale of assets                                    1,036                  --
                                                                   --------              --------
Net cash provided by investing activities                               654                     1
                                                                   --------              --------

Cash flows from financing activities
    Payment of long-term debt                                       (29,156)                 --
    Distributions paid to members                                   (25,302)              (18,500)
      Distribution paid to holders of minority interest             (19,578)                 --
                                                                   --------              --------
Net cash (used in) financing activities                             (74,036)              (18,500)
                                                                   --------              --------
Net (decrease) in cash and cash equivalents                         (37,067)               (4,138)
Cash and cash equivalents, beginning of period                       86,310                 5,513
                                                                   --------              --------
    Cash and cash equivalents, end of period                       $ 49,243              $  1,375
                                                                   ========              ========

</TABLE>

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



                                       7
<PAGE>





MSW Energy Holdings LLC and Subsidiaries

-------------------------------------------------------------------------------


1.       Organization

MSW Energy Holdings LLC (MSW Energy Holdings and collectively hereinafter with
its subsidiaries, referred to as the Company), a Delaware limited liability
company formed in March 2003 and its consolidated wholly-owned subsidiaries, MSW
Energy Finance Co., Inc. (MSW Finance), a Delaware corporation, and MSW Energy
Hudson LLC (MSW Hudson), a Delaware limited liability company, were organized
for the purpose of acquiring and holding a 50% interest in Ref-Fuel Holdings LLC
(Ref-Fuel Holdings) from Duke Energy Corporation (Duke). The initial acquisition
of Ref-Fuel Holdings (the initial closing) was completed on June 30, 2003. MSW
Finance, was organized for the sole purpose of acting as co-issuer with MSW
Energy Holdings of $200 million aggregate principal amount of 8 1/2% senior
secured notes due September 1, 2010 (Senior Notes). Other than serving as
co-issuer, MSW Finance does not conduct operations of its own and has no assets.

At the initial closing, MSW Energy Holdings acquired MSW Hudson, which holds a
49.8% membership interest in Ref-Fuel Holdings. MSW Energy Holdings has agreed
to acquire Duke Energy Erie, LLC (Duke Erie), an indirect, wholly-owned
subsidiary of Duke, which holds an additional 0.2% membership interest in
Ref-Fuel Holdings, within two years and six months after its purchase of MSW
Hudson.

As a result of a series of transactions known as the Equalization Transactions,
which were consummated on April 30, 2004, several private equity funds (the
DLJMB Funds), each of which is managed by entities affiliated with Credit Suisse
First Boston Private Equity, Inc. (CSFB Private Equity), and several investment
funds (the Highstar Funds) managed by AIG Global Investment Corp. (AIGGIC)
(collectively the Control Group) beneficially owned 60% and 39.99%,
respectively, of the equity interests in the Company, and 60% and 40%,
respectively, of the equity interests in American Ref-Fuel Holdings Corp.
(Holdings Corp., and formerly known as United American Energy Holdings Corp.).
Holdings Corp. owned a 0.01% managing member interest in the Company.

The Equalization Transactions also resulted in Holdings Corp. assuming full
control of the management and operations of the Company and Ref-Fuel Holdings
through its interests in the Company and MSW Energy Holdings II LLC (MSW Energy
Holdings II). MSW Energy Holdings II acquired its membership interest in
Ref-Fuel Holdings in a separate series of transactions (Merger) completed on
December 12, 2003. As a result of the Equalization Transactions, the Company has
effective control of Ref-Fuel Holdings, and is therefore consolidating its
results of operations and cash flows for the period from May 1, 2004.

On August 31, 2004, Holdings Corp., the indirect parent of MSW Energy Holdings
II and managing member of the Company, the DLJMB Funds and the Highstar Funds
effected a series of transactions that resulted in Holdings Corp. becoming the
indirect parent of the Company (the August 31 Transactions).

American Ref-Fuel Company LLC (American Ref-Fuel, ARC or ARC LLC), a
wholly-owned subsidiary of Ref-Fuel Holdings, owns partnerships that develop,
own and operate waste-to-energy facilities, which combust municipal solid waste
and produce energy in the form of electricity and steam. Through such
partnerships, American Ref-Fuel owns or controls six waste-to-energy facilities
located in the northeastern United States (the ARC operating facilities). The
subsidiaries of American Ref-Fuel that operate the ARC operating facilities (the
ARC operating companies) derive revenues principally from disposal or tipping
fees received for accepting waste and from the sale of electricity and steam
produced by those facilities. ARC operating subsidiaries include: (a) American
Ref-Fuel Company (Ref-Fuel Management); (b) TransRiver Marketing Company, L.P.
(TransRiver); (c) American Ref-Fuel Company of Hempstead (Hempstead); (d)
American Ref-Fuel Company of Essex County (Essex); (e) American Ref-Fuel Company
of Southeastern Connecticut (Seconn); (f) American Ref-Fuel Company of Niagara,
L.P. (Niagara); (g) American Ref-Fuel Company of Semass, L.P. (Ref-Fuel Semass);
(h) American Ref-Fuel Operations of Semass, L.P. (Semass Operator); (i) American
Ref-Fuel Company of Delaware Valley, L.P. (Delaware Valley) (collectively
referred to as the American Ref-Fuel Partnerships).

                                       8
<PAGE>

On February 1, 2005, the Control Group announced that they have signed a
definitive agreement to sell Holdings Corp. to Danielson Holding Corporation
(Danielson) (the Sale). Danielson will pay $740 million in cash for the equity
of Holdings Corp. and will assume the consolidated net debt of Holdings Corp.
Notice of early termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 was obtained on March 21, 2005. Federal
Energy Regulatory Commission approval was obtained on March 29, 2005 and pending
the required financing, the transaction is expected to close in the second
quarter of 2005. In connection with the Sale, costs relating to transaction
expenses, severance, employment contracts, the Option Modification Agreement
(see Note 12), Long-Term Incentive Plans, housing subsidies, lease termination
and other related items are estimated to be between $50 million and $70 million.

The accompanying condensed consolidated financial statements are unaudited. In
the opinion of management, such statements include all adjustments, including
normal recurring accruals and adjustments, necessary for a fair presentation of
the results for the period presented. The accounting policies followed during
interim periods reported are in conformity with accounting principles generally
accepted in the United States of America; however, certain information and
footnote disclosures normally included in financial statements have been
condensed or omitted pursuant to the rules and regulations of the Securities and
Exchange Commission. These consolidated financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2004. The
Company believes that the disclosures included are adequate and provide
sufficient information. The results of operations for the interim periods are
not necessarily indicative of the results that might be expected for future
interim periods or for a full year.



2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of MSW
Energy Holdings, its wholly-owned subsidiaries and Ref-Fuel Holdings. Prior to
the Equalization Transactions, the Company's investment in Ref-Fuel Holdings was
accounted for using the equity method. As a result of the Equalization
Transactions, the Company has effective control of Ref-Fuel Holdings and as of
April 30, 2004, is consolidating its results of operations, cash flows and
balance sheet. All significant intercompany transactions and accounts have been
eliminated. The minority interests reported relates to Duke's 0.2% interest and
MSW Energy Holdings II's 50% interest in Ref-Fuel Holdings.

Reclassifications

Certain reclassifications have been made to the prior year to conform to the
current period's presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management of the
Company to make estimates and assumptions that affect the (a) reported amounts
of assets and liabilities at the date of the financial statements; (b)
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements; and (c) reported amounts of revenues and expenses
recognized during the reporting period. Significant management estimates include
the estimated lives of long-lived assets, allowances for doubtful accounts
receivable, estimated useful lives and fair value adjustments of net tangible
and intangible assets, liabilities for self-insurance and certain landfill
liabilities. Such estimates may be subsequently revised as necessary when
additional information becomes available. Actual results could differ from those
estimates.


                                       9
<PAGE>

Deferred financing costs represent certain capitalized costs incurred by the
Company to finance its long-term debt obligations. These costs are amortized to
interest expense over the life of the related debt using the effective interest
rate method.

Equity Method Investment

Investments are accounted for using the equity method of accounting if the
investment gives the Company the ability to exercise significant influence, but
not control, over an investee. Significant influence is generally deemed to
exist if the Company has an ownership interest in the voting stock of the
investee of between 20% and 50%, although other factors, such as representation
on the investee's board of directors, are considered in determining whether the
equity method of accounting is appropriate.

The Company's investment in Ref-Fuel Holdings was accounted for using the equity
method of accounting prior to the Equalization Transactions. As a result, the
accompanying consolidated results of operations include the Company's share of
net earnings in "Equity in net earnings of Ref-Fuel Holdings" for the period up
to April 30, 2004.

Stock-Based Compensation

The Company has adopted the disclosure-only provisions of SFAS No. 123,
Accounting for Stock-Based Compensation", (FAS 123) as amended by SFAS No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure - an
Amendment of FAS No. 123" concerning certain transition and disclosure
provisions, but applies the intrinsic value recognition provisions of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and
related interpretations in accounting for stock-based compensation plans.

Risks and Uncertainties

The Company's operations involve a number of significant risks and
uncertainties. Factors that could affect the Company's future operating results
and cause actual results to vary materially from expectations and adversely
affect the Company's financial condition and prevent it from fulfilling its
obligations include but are not limited to, the Company's dependency on the
operations of the ARC operating companies and the Company's substantial
indebtedness.

Effect of New Accounting Standard

On December 16, 2004, the Financial Accounting Standards Board (FASB) issued
FASB Statement No. 123(R), "Share-Based Payment" (FAS 123(R)). FAS 123(R)
revises FAS 123 and requires companies to expense the fair value of employee
stock options and other forms of stock-based compensation. This requirement
represents a change from our current practice. On April 14, 2005, the SEC
announced that FAS 123(R) is now effective for public companies for annual,
rather than interim, periods that begin after June 15, 2005. We are
reviewing FAS 123(R), and are currently assessing the impact to our financial
statements. In compliance with SEC requirements, we will adopt FAS 123(R) as
of January 1, 2006.




                                       10
<PAGE>

3. Equity Investment in Ref-Fuel Holding



Summarized statement of operations information for Ref-Fuel Holdings is as
follows (unaudited, in thousands):

                                                    For the Three
                                                    Months Ended
                                                    March 31, 2004
                                                    --------------
Revenues                                              $    102,105
Operating income                                            18,758
Net earnings                                                 8,802
Company's equity in net earnings                             4,539




Pro Forma Information



The following results represent the unaudited pro forma results as if the
Equalization Transactions and the August 31 Transactions had occurred on January
1, 2004. These results are presented for informational purposes only, and are
not necessarily indicative of the actual results that would have resulted had
the acquisition, the Equalization Transactions and the August 31 Transactions
actually occurred on January 1, 2004 (unaudited, in thousands):

<TABLE>
<CAPTION>

                                                       Pro Forma
                                                     For the Three
                                                      Months Ended
                                                     March 31, 2004
                                                    ---------------
Revenues
<S>                                                     <C>
   Waste disposal and related services                  $  65,321
   Energy                                                  31,658
   Other                                                    5,126
                                                        ----------
Total net revenues                                        102,105
                                                        ----------
Expenses
   Operating                                               54,621
   Depreciation and amortization                           17,371
   General and administrative                              11,306
    Loss on asset retirements                                 522
                                                        ----------
Operating income                                           18,285
Interest income                                               768
Interest expense                                          (15,889)
Minority interests in net income of subsidiaries           (4,419)
Other income, net                                             138
                                                        ----------
Net loss before taxes                                      (1,117)
Taxes                                                         458
                                                        ----------
Net loss                                                $    (659)
                                                        ==========
</TABLE>


                                       11
<PAGE>


4. Property, Plant and Equipment

Property, plant and equipment consist of the following (unaudited, in
thousands):

<TABLE>
<CAPTION>
                                                    Useful Life            March 31, 2005        December 31, 2004
                                                  ---------------       ---------------------    -----------------
<S>                                                  <C>                   <C>                       <C>
Plant and equipment                                  2-50 years            $  1,207,766              $ 1,206,558
Land                                                                              3,813                    3,813
                                                      Up to 17
Leasehold improvements                                  years                     5,575                    5,575
Landfill                                              13 years                   17,768                   17,768
Spare parts                                                                      12,282                   12,282
Construction in progress                                                         13,365                    6,244
                                                                            -----------              -----------
Total property, plant and equipment                                           1,260,569                1,252,240

Accumulated depreciation                                                        (75,521)                 (65,062)
                                                                            -----------              -----------
Property, plant and equipment, net                                          $ 1,185,048              $ 1,187,178
                                                                            ===========              ===========
</TABLE>




5. Intangible Assets

Intangible assets consist of the following (unaudited, in thousands):

<TABLE>
<CAPTION>
                                            Useful Life             March 31, 2005    December 31, 2004
                                          -------------------    -----------------    -------------------
<S>                                         <C>                      <C>               <C>
Energy contracts                            5-15 years               $ 525,125            $ 525,125
Waste contracts                               5 years                   23,600               23,600
Financing costs                               7 years                    8,382                8,382
Emissions credits                           Indefinite                  43,377               43,377
Other intangibles                           Indefinite                   3,579                3,579
                                                                     ---------            ---------
                                                                       604,063              604,063
Accumulated amortization                                               (85,013)             (68,929)
                                                                     ---------            ---------
Intangible assets, net                                               $ 519,050            $ 535,134
                                                                     =========            =========
</TABLE>



6. Accounts Payable and Other Current Liabilities

Accounts payable and other current liabilities consist of the following
(unaudited, in thousands):


<TABLE>
<CAPTION>
                                 March 31, 2005        December 31, 2004
                              ----------------------  -------------------
<S>                                   <C>                 <C>
Accounts payable                      $33,341             $25,016
Incentive plan accruals                 3,975               3,569
Compensation liabilities                4,614               8,254
Short-term Duke liability               2,500               2,500
Other                                   4,485               5,640
                                      -------             -------
                                      $48,915             $44,979
                                      =======             =======

</TABLE>

                                       12
<PAGE>



7. Financing Arrangements

Long-term debt obligations of the Company consist of the following (unaudited,
in thousands):


<TABLE>
<CAPTION>
                                                                                     March 31, 2005       December 31, 2004
                                                                     Final         -------------------    --------------------
                                              Interest Rate         Maturity
                                              -------------        ----------
<S>                                           <C>                  <C>             <C>                     <C>
 Senior Notes                                      8.5%              2010            $    200,000           $    200,000
                                                                                   -------------------     --------------------
 Ref-Fuel Holdings debt
    ARC Senior Notes                              6.26%              2015                 240,000                240,000
    Niagara Series 2001                       5.45 - 5.625%          2015                 165,010                165,010
   Seconn Corporate Credit Bonds -
      1992 Series A                               6.45%              2022                  30,000                 30,000
   Seconn Corporate Credit Bonds -
      ARC-I Series A and ARC-11 Series A          5.50%              2015                  13,500                 13,500
    Hempstead Corporate Credit Bonds              5.00%              2010                  42,670                 42,670
    Hempstead project debt                     4.625%-5.00%          2009                 114,543                114,543
    Essex project debt                         5.32%-7.48%           2020                  96,496                 96,496
    Seconn project debt                        5.125%-5.50%          2015                  50,602                 50,602
    Semass Series 2001A                        5.50%-5.625%          2016                 134,345                134,345
    Semass Series 2001B                        5.25%-5.50%           2010                  75,250                104,385
                                                                                   -------------------     --------------------
      Subtotal                                                                            962,416                991,551
                                                                                   -------------------     --------------------
    Other obligations                                                                         252                    273
                                                                                   -------------------     --------------------
 Total debt at par value                                                                1,162,668              1,191,824
    Unamortized debt premium, net                                                          51,138                 54,189
    Current portion                                                                       (75,713)               (87,184)
                                                                                   -------------------     --------------------
 Total long-term debt obligations                                                       1,138,093              1,158,829
                                                                                   ===================     ====================
</TABLE>


8.       Other Long-Term Liabilities

Other long-term liabilities consist of the following (unaudited, in thousands):


<TABLE>
<CAPTION>
                                                        Amortization
                                                           Period
                                                          (years)            March 31, 2005          December 31, 2004
                                                          -------         ---------------------    --------------------
<S>                                                         <C>                <C>                    <C>
        Waste contracts acquired                            9-17               $   117,493            $    120,276
        Operating lease acquired                             14                     37,629                  38,453
        Duke liability                                       16                     23,169                  22,623
        Energy contract levelization                         12                     24,451                  24,123
        Landfill liabilities                                 13                     11,305                  10,699
        Deferred revenue                                    8-20                     5,163                   5,112
        Incentive plan accruals                                                        723                   3,333
                                                                          ----------------------    --------------------
                                                                               $   219,933            $    224,619
                                                                          ======================    ====================
</TABLE>

See Note 13 for amortization of certain other long-term liabilities.


                                       13
<PAGE>


9. Income Taxes

The components of the provision for income taxes, for the three months ended
March 31, 2005 consist of the following (unaudited, in thousands):


<TABLE>
<CAPTION>
                                                                For the Three Months
                                                                       Ended
                                                                   March 31, 2005
                                                              -------------------------
<S>                                                                <C>
      Current provision                                            $      (5,913)
      Deferred provision                                                   5,394
                                                              -------------------------
      Total consolidated income tax benefit                        $        (519)
                                                              =========================
</TABLE>


The Company has federal net operating loss carryforwards of approximately $1.3
million at December 31, 2004 which expire between 2021 and 2024 and state net
operating loss carryforwards of approximately $2.2 million, which have various
expiration dates.


10. Operational and Other Agreements


The ARC operating facilities operate under various long-term service agreements,
the remaining terms of which end on dates ranging between 2009 and 2020. These
service agreements require the projects to provide disposal services for waste
delivered by counterparties to these agreements at prices determined by various
formulas contained in such agreements.

Duke and Allied Waste Industries, Inc. (Allied) are each obligated to fund
one-half of certain cash shortfalls and other liabilities of Essex arising out
of operating the project, including certain environmental claims. Essex and ARC
LLC entered into agreements with Duke and Allied requiring Essex and ARC LLC to
reimburse, indemnify and defend Duke and Allied from any liability in respect to
these obligations.

With respect to the Delaware Valley facility, ARC LLC has guaranteed amounts
payable by Delaware Valley pursuant to certain agreements. ARC LLC guarantees
through 2006 the obligations of Delaware Valley under its service agreement with
the Delaware County Solid Waste Authority. In conjunction with the acquisition
of the facility, ARC LLC also provides an indemnity to the sellers of the
facility from post-acquisition service agreement liability and environmental
damages as a result of remedial action for releases or threatened releases of
hazardous substances at the facility.


Credit Support

In order to provide ARC LLC with an additional source of funds to meet calls on
project support obligations, MSW Energy Holdings and Ref-Fuel Corp. have each
entered into the Equity Contribution Agreement pursuant to which they each have
agreed to provide up to $50 million in equity capital to ARC LLC. Each of their
respective obligations to make equity contributions under the Equity
Contribution Agreement is conditioned upon the other making an equal
contribution and is limited to each making no more than $50 million of aggregate
equity contributions. If either of them is not rated at least BBB by S&P, then
such entity is required to provide a letter of credit from a commercial bank
that is rated at least A- by S&P to secure its obligations under the Equity
Contribution Agreement.


                                       14
<PAGE>

11. Commitments and Contingencies

Environmental and Regulatory Risk

The Company operates in an environmentally sensitive industry and is subject to
extensive federal, state and local laws and regulations adopted for the
protection of the environment. The laws and regulations primarily applicable to
the Company are those related to discharge of emissions into the air and
management of solid waste but can also include those related to water use,
discharges to water, wetlands preservation and hazardous waste management.
Certain of these laws have extensive and complex requirements relating to
obtaining construction and operating permits, monitoring, record keeping and
reporting. While management believes that it is in substantial compliance with
permits and other applicable environmental laws relating to the Company, its
facilities, from time to time, may not be in full compliance with all such laws.

Noncompliance with environmental laws and regulations can result in the
imposition of civil or criminal fines or penalties. In some instances,
environmental laws also may impose clean-up or other remedial obligations in the
event of a release of pollutants or contaminants into the environment. The
Company incurs operating costs and capital expenditures related to various
environmental protection and monitoring programs. Such expenditures have not had
a material adverse effect on the Company's consolidated financial position or
results of operations. However, federal, state and local regulatory authorities
may consider proposals to restrict or tax certain emissions, which proposals, if
adopted, could impose additional costs on the operation of the Company.

Future Mercury Regulation at the Essex Facility. On December 6, 2004 the New
Jersey Department of Environmental Protection (NJDEP) promulgated regulations
applicable to the Essex facility that will make mercury emission requirements
more stringent. Specifically, the new regulations increase the required removal
efficiency to 85% removal on January 3, 2006 and 95% removal on January 3, 2012
versus the current 80% removal, while retaining the alternative limit of 28
micrograms per cubic meter. As a result of the new regulations, there is an
increased risk that emission exceedances will occur and therefore an increased
probability that additional controls will ultimately be required to prevent such
exceedances. ARC believes that the new requirements may at a minimum result in
increased operating costs due to increased use of activated carbon in the
current control equipment. It is also possible that the regulations will require
the installation of additional pollution control equipment such as compact
hybrid particulate collector units, a device similar to a baghouse. Management
estimates that the cost of the installation of such additional pollution control
equipment, if required, would be approximately $38 million. The Essex service
agreement provides a mechanism for a pass-through to the Port Authority of New
York and New Jersey of the majority of any additional capital and operating
costs that may be required. We cannot currently determine the likelihood of
additional and operating capital costs being incurred in connection with these
changes in regulation, or the total of any such costs.

Lower Passaic River Study. In August 2004, United States Environmental
Protection Agency (USEPA) notified Essex that it was potentially liable under
CERCLA Section 107(a) for response actions in the Lower Passaic River Study Area
(LPRSA), a 17 mile stretch of river in northern New Jersey. Essex is one of at
least 52 Potentially Responsible Parties (PRPs) named thus far. USEPA alleges
that hazardous substances found in the LPRSA were being released from the Essex
site, which abuts the river. USEPA's notice letter states that Essex may be
liable for costs related to a proposed $10 million study of the Lower Passaic
River and for unspecified natural resource damages. Considering the history of
industrial and other discharges into the LPRSA from other sources, including
named PRPs, Essex believes that its contribution will be determined to be de
minimus; however, it is not possible at this time to predict that outcome with
certainty or to estimate Essex's liability for the study or any eventual natural
resource damage.

                                       15
<PAGE>

Landfill Agreements

Semass Partnership, a subsidiary of Ref-Fuel Semass, has a waste management
agreement (the WMA) dated May 25, 1982, as amended, with the Carver, Marion,
Wareham Regional Refuse Disposal District (CMW). The WMA allows Semass
Partnership to utilize a portion of a landfill (the CMW Landfill), which CMW
leases from Wankinco River, Inc. (Wankinco).

Beginning in May 1997, Wankinco provided several notices purportedly terminating
the lease on the CMW Landfill based upon an allegation that the lease term
automatically expired due to alleged failures to strictly comply with the terms
of the lease. In June 1997, Semass Partnership and CMW filed suit against
Wankinco and A. D. Makepeace Company, Inc., Wankinco's parent company, seeking a
declaratory judgment that Semass Partnership and CMW may continue to operate the
CMW Landfill. Trial of the matter before the court was completed in 2001 and a
decision was received by the Company in December 2002, which decided virtually
all issues in favor of the Semass Partnership. The Semass Partnership avoided
both forfeiture of possession and any liability for damages due to landfill
operations. Wankinco appealed in January 2003, and on August 19, 2004, the
Appellate Court upheld the Trial Court decision in respect of all decisions
related to the alleged lease violations. One ruling unrelated to lease
forfeiture or damages for unlawful possession was remanded because the Judge's
ruling that Semass had not engaged in "an unfair and deceptive act or practice"
applied the law conjunctively rather than disjunctively (as required by the
law). The Appellate Court affirmed the Judge's ruling that there was no
unfairness, but remanded the question of deception for further findings since
the Appellate Court, due to the use of the conjunctive rather than disjunctive,
was unable to infer that the Judge did not find a compensable deceptive act.
Management believes that the Judge's ruling on remand will clarify this issue in
favor of the Company. In addition, Wankinco appealed the Appellate Court's
decision on the lease issues to the Supreme Judicial Court of Massachusetts and,
on September 30, 2004, the Supreme Judicial Court denied Wankinco's Application
for Further Appellate Review. Accordingly, except for the remand discussed
above, the favorable decisions received by Semass have become final and
nonappealable. Apart from this decision, the Semass Partnership and Wankinco
continue litigating several other actions involving regulatory issues at the
landfill.

Management believes that the ultimate resolution of these matters will not have
a material adverse impact on the results of operations, cash flows or financial
position of the Company.

In March 1990, the Semass Partnership, CMW and Wankinco entered into an
agreement related to the CMW Landfill, as amended (the Settlement Agreement),
which requires, among other things, the Semass Partnership to make annual
deposits into an environmental protection trust fund (the Fund) in lieu of
obtaining environmental impairment liability insurance for the CMW Landfill. The
Semass Partnership is required under the Settlement Agreement to deposit
$500,000 annually into the Fund, payable in equal quarterly installments.
Certain additional deposits are required subject to the availability of cash in
accordance with the Loan Agreement. The Semass Partnership's obligation to make
deposits into the Fund ceases when the Fund reaches a balance of $20.0 million
unless the fund limit is increased by agreement of the parties, or absent such
agreement, by arbitration, wherein it is determined the fund limit needs to be
increased to adequately protect against environmental damage. Wankinco by letter
dated March 29, 2005, and pursuant to its rights under the Settlement Agreement
described above, has requested a re-evaluation of the Fund limit and an increase
of such limit to $29.7 million. Management believes that the $20.0 million fund
limit is adequate for this purpose. Proceeds from the Fund are to be used
primarily for remediation of the CMW Landfill in the event of environmental
damage. The Semass Partnership and Wankinco are each entitled to receive
one-half of the balance of the Fund upon final closure of the CMW Landfill and
receipt of required governmental approvals. During first quarter of 2005 and the
year ended December 31, 2004, the Semass Partnership made the required quarterly
deposits into the Fund and charged operations for one-half of the deposits into
the Fund, representing one-half of the balance of the Fund which will be
disbursed to Wankinco upon final closure of the CMW Landfill. Additional charges
to operations may be required in future years if any disbursements are required
from the Fund to remediate any environmental damages. To date, management is not
aware of any such environmental damages. As of March 31, 2005 and December 31,
2004, the balance in the Fund is approximately $15.2 million and $14.0 million,
respectively, and is included in restricted cash and long-term investments. A
corresponding liability, representing approximately one-half of the deposits and
related earnings in the Fund, is included in other long-term liabilities.

                                       16
<PAGE>

Other Matters

The Company is involved in various claims or litigation in the ordinary course
of business. Management believes that the ultimate resolution of these matters,
either individually or in the aggregate, will not have a material adverse impact
on the future results of operations, cash flows or financial position of the
Company.

The Company is required to provide financial assurance to government agencies
under applicable environmental and procurement regulations relating to the
landfill operations and waste disposal contract.


12. Employee Compensation and Benefit Plans

Stock Option Plan


On August 11, 2004, the Board of Directors of Holdings Corp., managing member of
the Company, adopted the 2004 Stock Option Plan (the SOP), effective January 1,
2004, as further modified on September 16, 2004. The SOP was designed to link
the interests of officers of Holdings Corp. and other senior management of
Ref-Fuel Holdings to the interests of Holdings Corp. shareholders through the
granting of options to purchase stock of Holdings Corp. Holdings Corp. is a
privately held company. During 2004 Holdings Corp. granted 13,199 options to the
executive officers of Ref-Fuel Holdings under the SOP. Options awarded under the
SOP vest over a period of four years and expire ten years from the date of
grant. Such ten-year period is automatically extended under certain
circumstances.

On January 31, 2005, in conjunction with the Sale, the Board of Directors of
Holdings Corp. and optionees under the SOP adopted an Option Modification
Agreement (OMA). Under the terms of the OMA, immediately prior to the Sale, the
SOP plan will be canceled in exchange for a cash payment. The cash payment is
calculated as the value of all outstanding options granted or ungranted but
authorized under the terms of the SOP, together with certain amounts due and
anticipated under other long term compensation plans.



                                       17
<PAGE>

A summary of Holdings Corp.'s stock options held by senior management for the
three months ended March 31, 2005 and the year ended December 31, 2004, is as
follows:

<TABLE>
<CAPTION>
                                                                                      Weighted average
                                                                     Shares            exercise price
                                                                 ----------------    -------------------
Options outstanding:
<S>                                                               <C>                  <C>
January 1, 2004                                                                -        $             -
                                                                                                      -
Granted                                                                   13,199               1,189.51
Exercised                                                                      -                      -
Forfeited or terminated                                                        -                      -
Purchased by MSW Merger                                                        -                      -
                                                                 ----------------    -------------------
Balance at December 31, 2004 and March 31, 2005                           13,199        $      1,189.51
                                                                 ================    ===================
</TABLE>


The weighted average fair value of the options was $133.24 and $132.30 per share
at March 31, 2005 and December 31, 2004, respectively. The fair value of the
stock options at March 31, 2005 and December 31, 2004 is an estimate on the date
of grant that is calculated using the minimum value option pricing model with
the following assumptions:


Expected life (years)                                           3
Expected dividend                                               -
Risk-free interest rate                                      3.9%


The Company applies the recognition provisions of Accounting Principles Board
Opinion No. 25 and related interpretations in accounting for its stock-based
compensation plans. No compensation cost has been recognized for the stock
option plan. Set forth as follows are the Company's net income presented both as
reported and pro forma, as if compensation cost had been determined consistent
with the provisions of FAS No. 123 for the three months ended March 31, 2005
(unaudited in thousands):


                                       18
<PAGE>

<TABLE>
<CAPTION>


                                                               Three Months Ended
                                                                March 31, 2005
                                                         ------------------------------
<S>                                                             <C>
Net loss, as reported                                           $      (720)
Add:  stock-based compensation expense included in
    reported net income, net of taxes                                      -
Less:  stock-based compensation expense included using
    fair value method, net of  taxes                                 (1,759)
                                                         ------------------------------
Pro forma net loss                                              $    (2,479)
                                                         ==============================
</TABLE>

The effects of applying FAS No. 123 in this pro forma disclosure are not
necessarily indicative of future amounts.


13.      Supplemental Disclosure of Cash Flow Information

Depreciation and amortization expense included in the Statements of Cash Flows
for the three months ended March 31, 2005 and 2004 consists of the following
expenses (revenues) (unaudited, in thousands):

<TABLE>
<CAPTION>
                                                                                                              For the Three
                                                                                For the Three Months       Months Ended March
         Asset / liability                     Statement of operations          Ended March 31, 2005            31, 2004
-----------------------------------    ---------------------------------------- ---------------------- --- --------------------
<S>                                                                  <C>            <C>                           <C>
Property, plant and equipment          Depreciation and amortization (1)            $          16,736             $    -
Energy contracts                       Energy revenues                                         14,765                  -
Long-term waste contracts              Waste disposal and related services                     (1,758)                 -
Lease                                  Operating expenses (rent expense)                         (824)                 -
Debt                                   Interest expense                                        (2,757)               293
Deferred revenue                       Waste disposal and related services and
                                        energy revenues                                           (38)                 -
                                                                                ----------------------     --------------------
 Total                                                                              $          26,124             $  293
                                                                                ======================     ====================
(1) Includes amortization of intangible assets


Noncash investing and financing activities:

Cash paid for interest                                                              $          15,384             $8,500
Cash paid for taxes (net of refunds)                                                               48                  -


</TABLE>

14. Subsequent Event

On April 28, 2005, in connection with the Sale, Moody's Investors Service issued
a ratings action downgrading approximately $1.1 billion of debt securities
issued by the Company and its subsidiaries or associated with the ARC projects.
The ratings action may require ARC LLC, pursuant to the term of certain
guarantee agreements, to issue letters of credit or provide other support for a
maximum of $42.4 million, in connection with these guarantees.

In addition, on April 29, 2005, Standard & Poor's Ratings Service (Standard &
Poor's) announced that following the pending acquisition of American Ref-Fuel
Holdings Corp. by Covanta Energy Corporation (a subsidiary of Danielson Holding
Corporation), the credit rating on the Company's 8.50% Series B Senior Secured
Notes due 2010 (the Company Notes) will be lowered to 'BB-', the rating on the
7.375% Series B Senior Secured Notes due 2010 of MSW Energy Holdings II LLC and
MSW Energy Finance Co. II, Inc. will remain at 'BB-', and the rating on ARC and
the debt related to the ARC projects will be lowered to 'BB+'. The outlook on
the ratings will be stable.

As a result of these ratings actions, the Company may be required to offer
to buy back the Company Notes upon consummation of the acquisition for a
price equal to 101% of the principal amounts of the notes, plus any accrued
and unpaid interest, and liquidated damages, if any.


                                       19
<PAGE>


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

OVERVIEW

The following discussion contains forward-looking statements. These statements
are based on current plans and expectations and involve risks and uncertainties
that could cause actual future activities and results of operations to be
materially different from those set forth in the forward-looking statements.
Important factors that could cause actual results to differ include risks set
forth in "Risk Factors," below. The following should be read in conjunction with
the financial statements and related notes included elsewhere in this report.

Prior to the Equalization Transactions, the Company's investment in Ref-Fuel
Holdings LLC (Ref-Fuel Holdings) was accounted for using the equity method. As a
result of the Equalization Transactions, the Company has effective control of
Ref-Fuel Holdings and as of April 30, 2004 is consolidating its results. All
significant intercompany transactions and accounts have been eliminated.

The following is a discussion of the financial condition and results of
operations for the three months ended March 31, 2005 and 2004. This discussion
should be read in connection with our historical consolidated financial
statements and notes thereto included in the Annual Report on Form 10-K for the
year ended December 31, 2004, which includes the historical financial statements
of Ref-Fuel Holdings, and the supplemental pro forma information that follows.

On February 1, 2005, affiliates of Credit Suisse First Boston Private Equity,
Inc. and affiliates of AIG Global Investment Corp. announced that they have
signed a definitive agreement to sell American Ref-Fuel Holdings Corp. (Holdings
Corp.), the Company's indirect and direct owner, to Danielson Holding
Corporation (Danielson) (the Sale). Danielson will pay $740 million in cash for
the equity of Holdings Corp. and will assume the consolidated net debt of
Holdings Corp. Notice of early termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 was obtained on March 21,
2005. Federal Energy Regulatory Commission approval was obtained on March 29,
2005 and pending the required financing, the transaction is expected to close in
the second quarter of 2005. In connection with the Sale, costs relating to
transaction expenses, severance, employment contracts, the Option Modification
Agreement, Long-Term Incentive Plans, housing subsidies, lease termination and
other related items are estimated to be between $50 million and $70 million.


                                       20
<PAGE>


The following summarizes the historical financial information for MSW Energy
Holdings as of and for the three months ended March 31, 2005 and 2004
(unaudited, in thousands):


<TABLE>
<CAPTION>

                                                              For the                  For the
                                                         Three Months Ended      Three Months Ended
                                                           March 31, 2005          March 31, 2004
                                                         -------------------     --------------------
<S>                                                      <C>                       <C>
Statement of Operations Data:
Net revenues                                                $   100,231              $      --
Equity in net earnings of Ref-Fuel Holdings                        --                      4,539
Operating expenses                                              (52,794)                    --
Depreciation and amortization expense                           (16,736)                    --
Administrative and general expense                              (11,030)                    --
(Loss) on asset retirement                                       (1,386)
Interest income                                                   1,130                       28
Interest expense                                                (16,913)                  (5,055)
Minority interest in net income of subsidiaries                  (4,101)
                                                                                            --
Other income (expense), net                                         360                     (473)
Income taxes                                                        519                     --
                                                            -----------              -----------
Net loss                                                    $      (720)             $      (961)
                                                            ===========              ===========

Cash Flow Data:
Cash provided by operating activities                       $    36,315              $    14,361
Cash provided by investing activities                               654                        1
Cash used in financing activities                               (74,036)                 (18,500)


Balance Sheet Data:
Total assets                                                  1,990,385
Total debt                                                    1,213,806
Minority interest in consolidated subsidiaries                  349,646
Total members' equity                                           105,326

</TABLE>


Results of Operations

For the Three Months Ended March 31, 2005 as compared to the Three Months Ended
March 31, 2004

Net revenues. Net revenues of $100.2 million for the three months ended March
31, 2005 represent Ref-Fuel Holdings three month results. Of that amount, $64.6
million is attributable to waste disposal and related services revenue, $32.4
million is attributable to energy revenue and $3.2 million is attributable to
other revenue. There were no revenues during the same period in 2004 as the
results from Ref-Fuel Holdings were accounted for under the equity method of
accounting.

Equity in earnings of Ref-Fuel Holdings. Prior to the Equalization Transactions,
which were consummated on April 30, 2004, we accounted for our investment in
Ref-Fuel Holdings under the equity method of accounting. As a result of the
Equalization Transactions, we are consolidating these results after April 30,
2004 and therefore no equity in earnings of Ref-Fuel Holdings is shown on our
financial statements for the three months ended March 31, 2005.

Operating expenses. Operating expenses of $52.8 million for the three months
ended March 31, 2005 represents the consolidated Ref-Fuel Holdings' operational
expenses.

Depreciation and amortization expense. Depreciation and amortization expense of
$16.7 million for the three months ended March 31, 2005 represents the
consolidated Ref-Fuel Holdings' depreciation and amortization expenses.


                                       21
<PAGE>

Administrative and general expense. The administrative and general expense of
$11.0 million for the three months ended March 31, 2005 represents the
consolidation of Ref-Fuel Holdings' general and administrative expenses, as well
as MSW Energy Holdings' incremental expenses.

Interest income. The majority of the interest income of $1.1 million for the
three months ended March 31, 2005 represents the consolidated Ref-Fuel Holdings'
interest income.

Interest expense. Interest expense of $16.9 million for the three months ended
March 31, 2005 represents Ref-Fuel Holdings' interest expense in the amount of
$11.8 million, the interest expense attributable to the 2010 Senior Notes of
$4.3 million, the accretion of our Duke Liability of $0.5 million and the
amortization of the deferred financing fees of $0.3 million.


Cash Flow Activities

After the Equalization Transactions, Holdings Corp. controls the operations of
Ref-Fuel Holdings as 99.8% of the interests in Ref-Fuel Holdings are owned by
the Company and MSW Energy Holdings II as of April 30, 2004. As a result, the
Company has effective control of Ref-Fuel Holdings, and is therefore
consolidating its results of operations and cash flows for the three months, and
the balance sheet at March 31, 2005. The Company is required to maintain cash
and investment balances that are restricted by provisions of its debt,
operational or lease agreements. These amounts are held by financial
institutions in order to comply with contractual provisions requiring such
reserves.


Operating Activities

Our net cash provided by operating activities of $36.3 million for the three
months ended March 31, 2005 relates primarily to cash earnings offset by changes
in working capital.



Investing Activities

Our net cash provided by investing activities of $0.7 million for the three
months ended March 31, 2005 relates to the increase in restricted cash and
proceeds from sale of capital assets less capital additions.

Financing Activities

Our net cash used in financing activities of $74.0 million for the three months
ended March 31, 2005 relates to distributions paid to members of $25.3 million,
payments on long-term debt of $29.2 million and distributions to holders of
minority interest of $19.6 million.


                                       22
<PAGE>

Supplemental Pro Forma Information


The following results represent the pro forma results for the three months ended
March 31, 2004 as if the Equalization Transactions had occurred on January 1,
2004. These results are presented for informational purposes only, and are not
necessarily indicative of the actual results that would have resulted had the
Equalization Transactions actually occurred on January 1, 2004 (in thousands):


<TABLE>
<CAPTION>


                                                      Actual Results For the      For the Three
                                                       Three Months Ended         Months Ended
                                                        March 31, 2005            March 31, 2004
REVENUES                                              ----------------------     -----------------
<S>                                                          <C>                    <C>
   Waste disposal and related services                       $  64,639              $  65,321
   Energy                                                       32,388                 31,658
   Other                                                         3,204                  5,126
                                                             ---------              ---------
Total net revenues                                             100,231                102,105
                                                             ---------              ---------
EXPENSES
   Operating                                                    52,794                 54,621
   Depreciation and amortization                                16,736                 17,371
   General and administrative                                   11,030                 11,306
    Loss on asset retirements                                    1,386                    522
                                                             ---------              ---------
Operating income                                                18,285                 18,285
Interest income                                                  1,130                    768
Interest expense                                               (16,913)               (15,889)
Minority interests in net income of subsidiaries                (4,101)                (4,419)
Other income, net                                                  360                    138
                                                             ---------              ---------
Net (loss) before taxes                                         (1,239)                (1,117)
Income tax benefit                                                 519                    458
                                                             ---------              ---------
Net loss                                                     $    (720)             $    (659)
                                                             =========              =========
</TABLE>


Comparison of the Unaudited Actual and Pro Forma Three Months Ended March 31,
2005 and 2004, respectively

Total Net Revenues. Total actual net revenues were $100.2 million for the three
months ended March 31, 2005, a decrease of $1.9 million, or 1.8%, from the same
period for the prior year. Decreases in waste revenues of $0.7 million were
attributable mainly to a decrease in waste volumes ($2.4 million) resulting from
increased planned outages, which was partially offset by an increase in waste
pricing ($1.8 million). Energy sales provided for a slight increase of $0.7
million in revenues for the three months ended March 31, 2005, as compared to
the prior year. Steam sales continued to be strong and accounted for an increase
of $0.2 million in the three months ended March 31, 2005 as compared to the
prior period.

Other revenues decreased by $1.9 million in the quarter ended March 2005, as
compared to the prior year's three month period as a result of an ash reuse
marketing arrangement that expired in the first quarter of 2004. This
arrangement accounted for approximately $1.6 million of revenues in the prior
year. In addition to the ash arrangement, metals volumes were lower while
pricing remained high which accounted for an additional decrease of
approximately $0.3 million in other revenues.

Expenses. Operating expenses were $52.8 million for the three months ended March
31, 2005, a decrease of $1.8 million, or 3% from the prior year period. The most
significant factor for this decrease was the ash reuse arrangement that expired
during the first quarter of 2004, which accounted for a reduction of $1 million.
In addition, there was a difference in the timing of the planned outages between
periods.



                                       23
<PAGE>

Depreciation and amortization expense. Depreciation and amortization expense of
$16.7 million for the three months ended March 31, 2005 represents a decrease of
$0.6 million from the prior year. This decrease resulted from the timing of
capital projects placed in service.

General and administrative. General and administrative expenses were $11.0
million for the three months ended March 31, 2005, a decrease of $0.3 million,
or 1%, from the prior year's period. The decrease is a result of lower bad debt
expenses of approximately $0.4 million, which was partially offset by increased
compensation and other expenses.

Interest expense. Interest expense of $16.9 million for the three months ended
March 31, 2005 represents an increase of $1 million resulting from lower cash
interest offset by higher amortizations of debt premium.

Debt Covenant

The indenture under which our Senior Notes were issued requires, among other
things, but subject to certain exceptions, that we not permit any restricted
payment unless certain ratio covenants based on our proportionate ownership of
Ref-Fuel Holdings have been met. We are presenting proportionate adjusted data,
including proportionate interest expense and proportionate adjusted earnings
before interest, taxes, depreciation and amortization (Adjusted EBITDA) because
these twelve-month results are used in the calculation of the restrictive
covenants contained in the indenture governing our Senior Notes.

The following table includes certain items that are not measures under generally
accepted accounting principles and are not intended to supplant the information
provided in accordance with generally accepted accounting principles.
Furthermore, these measures may not be comparable to those used by other
companies. The following tables should be read in conjunction with our
historical financial statements and related notes.

Additionally, as required under the indenture agreement, the activity of
Ref-Fuel Holdings is separate from MSW Energy Holdings incremental activity in
the following calculations (unaudited, in thousands).


<TABLE>
<CAPTION>
                                                                 Twelve Months Ended
                                                                      March 31,
                                                                         2005
                                                                 ---------------------
MSW Energy Holdings other data

Proportionate other data

<S>                                                              <C>
Proportionate Adjusted EBITDA (1)                                   $   135,175
Proportionate interest expense (2)                                       41,242

Ratio of proportionate Adjusted EBITDA to proportionate
   interest expense (3)                                                     3.3x
                                                                            ====
</TABLE>



(1)      Proportionate Adjusted EBITDA is defined as 49.8% of the Adjusted
         EBITDA of Ref-Fuel Holdings. Adjusted EBITDA (as calculated below) is
         not a measurement of financial performance under generally accepted
         accounting principles and should not be considered as an alternative to
         cash flow from operating activities or as a measure of liquidity or an
         alternative to net income as indicators of our operating performance or
         any other measures of performance derived in accordance with generally
         accepted accounting principles.


                                       24
<PAGE>

Proportionate Adjusted EBITDA for the last twelve months ended March 31, 2005 is
calculated by subtracting the results for the three months ended March 31, 2004
from the twelve months ended December 31, 2004, and then adding the three months
ended March 31, 2005, as follows (unaudited, in thousands):

<TABLE>
<CAPTION>
                                                      Year Ended          Three Months       Three Months      Twelve Months
                                                   December 31, 2004    Ended March 31,    Ended March 31,         Ended
                                                         2004                 2004              2005           March 31, 2005
                                                   ------------------  -----------------   ----------------    --------------
Ref-Fuel Holdings:
<S>                                                     <C>                   <C>                  <C>                  <C>
        Operating income                                $136,076              $ 18,758             $ 18,402             $135,720
        Depreciation and amortization                     67,996                17,371               16,736               67,361
        Loss on retirements                                2,107                   522                1,386                2,971
                                                        --------              --------             --------             --------
     EBITDA                                              206,179                36,651               36,524              206,052
       Fair value adjustment amortization
       and revenue levelization adjustments               71,700                18,789               12,473               65,384
                                                        --------              --------             --------             --------
     Adjusted EBITDA                                    $277,879              $ 55,440             $ 48,997             $271,436
                                                        ========              ========             ========
MSW Energy Holdings ownership percentage                                                                                    49.8%
MSW Energy Holdings Proportionate Adjusted                                                                              --------
   EBITDA                                                                                                               $135,175
                                                                                                                        ========
</TABLE>




(2)  Proportionate interest expense is defined as 49.8% of the interest expense
     for Ref-Fuel Holdings plus 100% of our interest expense.

The following table reconciles MSW Energy Holdings Proportionate Interest
Expense (unaudited, in thousands):


<TABLE>
<CAPTION>
                                                                                     Twelve Months Ended
                                                                                        March 31, 2005
                                                                                     --------------------

<S>                                                                                 <C>
Ref-Fuel Holdings interest expense                                                  $           48,177
   MSW Energy Holdings ownership percentage                                                       49.8%
                                                                                    -----------------------
Ref-Fuel Holdings proportionate interest expense                                                23,992
   MSW Energy Holdings incremental interest expense                                             17,250
                                                                                    -----------------------
MSW Energy Holdings proportionate interest expense                                  $           41,242
                                                                                    =======================
</TABLE>


(3)       Proportionate Adjusted EBITDA to proportionate interest expense is
          defined as the quotient of proportionate Adjusted EBITDA divided by
          proportionate interest expense.


Critical Accounting Policies

Our management is responsible for our consolidated financial statements and has
evaluated the accounting policies to be used in their preparation. Our
management believes these policies to be reasonable and appropriate. The
following discussion identifies those accounting policies that we believe will
be critical in the preparation of our consolidated financial statements, the
judgments and uncertainties affecting the application of those policies, and the
possibility that materially different amounts will be reported under different
conditions or using different assumptions.


                                       25
<PAGE>

Principles of Consolidation. The accompanying consolidated financial statements
include our accounts and the accounts of our wholly-owned subsidiaries and
Ref-Fuel Holdings. Prior to the Equalization Transactions, our investment in
Ref-Fuel Holdings was accounted for using the equity method. As a result of the
Equalization Transactions, we have effective control of Ref-Fuel Holdings and,
as of April 30, 2004, are consolidating its results. All significant
intercompany transactions and accounts have been eliminated. The minority
interests shown relate to Duke's 0.2% interest and MSW Energy Holdings II's 50%
interest in Ref-Fuel Holdings.

Use of Estimates in Preparing Financial Statements. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions
that affect: (a) the reported amounts of assets and liabilities at the date of
the financial statements; (b) the disclosures of contingent assets and
liabilities at the date of the financial statements; and (c) the reported
amounts of revenues and expenses recognized during the reporting period.
Significant management estimates include the estimated lives of long-lived
assets, allowances for doubtful accounts receivable, liabilities for
self-insurance and certain landfill liabilities. Such estimates may be
subsequently revised as necessary when additional information becomes available.
Actual results could differ from those estimates.

Equity Method Investment. Our investment in Ref-Fuel Holdings was accounted for
using the equity method of accounting prior to the Equalization Transactions. As
a result, the accompanying consolidated results of operations include our share
of net earnings in "Equity in net earnings of Ref-Fuel Holdings" for the period
up to April 30, 2004.

Stock-Based Compensation. We have adopted the disclosure-only provisions of SFAS
No. 123, "Accounting for Stock-Based Compensation", (FAS 123) as amended by SFAS
No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure -
an Amendment of FAS No. 123" concerning certain transition and disclosure
provisions, but applies the intrinsic value recognition provisions of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and
related interpretations in accounting for stock-based compensation plans.


Effect of New Accounting Standard

On December 16, 2004, the Financial Accounting Standards Board
(FASB) issued FASB Statement No. 123(R), "Share-Based Payment" (FAS 123(R)). FAS
123(R) revises FAS 123 and requires companies to expense the fair value of
employee stock options and other forms of stock-based compensation. This
requirement represents a change from our current practice. On April 14, 2005,
the SEC announced that FAS 123(R) is now effective for public companies for
annual, rather than interim, periods that begin after June 15, 2005. We are
reviewing FAS 123(R), and are currently assessing the impact to our financial
statements. In compliance with the SEC requirements, we will adopt FAS 123(R) as
of January 1, 2006.



                                       26
<PAGE>

Contractual Obligations and Commercial Commitments

 The following table sets forth our contractual obligations outstanding as of
March 31, 2005 (in thousands):


<TABLE>
<CAPTION>
          Contractual Obligations                                 Less than                                     More
                                                                      1                                         than 5
                                                 Total              Year         1-3 Years     3-5 Years        Years
                                              ------------       -----------    ----------     ---------     ----------
<S>                                             <C>                 <C>           <C>           <C>           <C>
Long-Term Debt Obligations                      $1,213,805          $ 75,713      $169,781      $176,935      $791,376
Unconditional Purchase Obligations                   1,307             1,307            --            --            --
Operating Lease Obligations                        144,732            14,609        27,890        31,463        70,770
Other Long-Term Obligations                         67,837             9,309         5,723         7,500        45,305
                                              -------------      ------------    ----------    ----------    ----------
                                       Total    $1,427,681          $100,938      $203,394      $215,898      $907,451
                                              =============      ============    ==========    ==========    ==========
</TABLE>


RISK FACTORS

 Any of the following risks could materially adversely affect our business,
financial condition or results of operations.

Our substantial indebtedness could adversely affect our financial condition.

We have a substantial amount of indebtedness. As of March 31, 2005 our total
indebtedness was $1,213.8 million, which represented approximately 73% of our
total capitalization.

This substantial indebtedness could have important consequences. For example, it
could:

o    make it more difficult for us to satisfy our obligations with respect to
     our outstanding debt, including our repurchase obligations;

o    increase our vulnerability to general economic and industry conditions;

o    limit our flexibility in planning for, or reacting to, changes in the
     business and industry in which we operate;

o    place us at a competitive disadvantage compared to our competitors that
     have less debt; and

o    limit ARC LLC's ability to borrow additional funds in order to make capital
     contributions to fund the ARC operating facilities.

Our indentures impose significant operating and financial restrictions on us.

The indentures governing our outstanding debt contain restrictive covenants that
limit our ability to engage in activities that may be in our long-term best
interests. These restrictions limit our ability and the ability of any
restricted subsidiaries to do the following, among other things:

o    incur additional indebtedness;

o    create liens;

o    pay dividends or make other equity distributions;


                                       27
<PAGE>

o    purchase or redeem capital stock;

o    make investments;

o    sell assets or consolidate or merge with or into other companies; and

o    engage in transactions with affiliates.

Our failure to comply with those covenants could result in an event of default
which, if not cured or waived, could result in the acceleration of some or all
of our debt. Moreover, it is possible that in the future the owners of MSW
Energy Holdings and MSW Energy Holdings II could determine to merge those
companies with each other or into Ref-Fuel Holdings. While such a merger would
be required to comply with the terms of the indenture, a result would be an
increase in the amount of indebtedness of the successor.

Our revenues depend on the operation of the ARC operating facilities.

Our receipt of distributions from the ARC operating companies and TransRiver are
dependent on the successful operation of the ARC operating facilities. The
operation of the ARC operating facilities involves many risks, including:

o    the breakdown or failure of equipment or processes;

o    the difficulty or inability to find suitable replacement parts for
     equipment;

o    the performance of the ARC operating facilities below expected levels of
     waste throughput, electric or steam generation or efficiency;

o    the unavailability of sufficient quantities of waste;

o    decreases in the fees for solid waste disposal;

o    decreases in the demand or market prices for recovered ferrous and
     nonferrous metal;

o    disruption in the transmission of electricity generated;

o    labor disputes;

o    operator error;

o    catastrophic events such as hurricanes, earthquakes, floods and acts of
     terrorism that damage or destroy the facilities or the area in which the
     facilities are located;

o    changes in law or application of law (including any applicable
     environmental laws or permit requirements); and

o    the exercise of the power of eminent domain.

While we will maintain insurance to protect against certain of these risks, the
insurance may not cover all of these risks and the proceeds of the insurance may
not fully compensate for damages to the ARC operating facilities and the ARC
operating facilities' lost revenues or increased expenses. A decrease or
elimination of revenues generated by the ARC operating facilities or an increase
in the costs of operating the ARC operating facilities could decrease or
eliminate funds available to us, which would adversely affect our financial
condition.


                                       28
<PAGE>

We depend on performance by third parties under contractual arrangements.

We depend on third parties to, among other things, purchase the electric and
steam energy produced by the ARC operating facilities, and supply and deliver
the waste and other goods and services necessary for the operation of the ARC
operating facilities. The viability of the ARC operating facilities depends
significantly upon the performance by third parties in accordance with the
long-term contracts entered into by the ARC operating companies and the third
parties in connection with the ARC operating facilities.

If the third parties to those contracts do not perform their obligations, or are
excused from performing their obligations because of nonperformance by the ARC
operating companies or other parties to the documents, or due to force majeure
events or changes in laws or regulations, the ARC operating companies may not be
able to secure alternate arrangements on substantially the same terms, if at
all, for the services provided under the contracts. Furthermore, the ability of
the ARC operating companies and TransRiver to make distributions to us may be
adversely affected, which may adversely affect our financial condition. In
addition, the bankruptcy or insolvency of a participant or third party in the
ARC operating facilities could result in nonpayment or nonperformance of that
party's obligations to the ARC operating companies and could adversely affect
their ability to make distributions to us, which would decrease or eliminate the
funds available to us.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Our operations are concentrated in one region.

All of the ARC operating facilities are located in the northeastern United
States. The entrance of new competitors into the market or the expansion of
existing competitors could have a material adverse effect on distributions
available to us from the ARC operating companies and, ultimately, on our
financial condition.

We depend on a significant supply of solid waste.

If the ARC operating facilities do not obtain a supply of solid waste at prices
and quantities that are sufficient to operate the ARC operating facilities at
their expected operating levels, it will adversely affect operations and our
financial condition. One or more of the following factors could impact the price
and supply of waste:

o    defaults by waste suppliers under their contracts;

o    a decline in solid waste supply due to increased recycling;

o    composting of municipal solid waste;

o    legal prohibitions against disposal of certain types of solid waste in WTE
     facilities; or

o    increased competition from landfills, recycling facilities and transfer
     stations.

In addition, state and local governments mandate recycling and waste reduction
at the source and the scope of these recycling and waste reduction mandates may
be enlarged in the future. Also, solid waste transfer stations adjacent to
railroad lines, and which are exempt from state and local government regulations
due to a 1995 amendment to the Interstate Commerce Act, are being developed in
the northeast United States and may offer pricing below current market prices.
The ARC operating companies may not be successful in obtaining sufficient
quantities of waste at adequate prices for the successful operation of the ARC
operating facilities. Failure to obtain sufficient waste could have a material
adverse effect on our financial condition.


                                       29
<PAGE>

Failure to comply with environmental permitting and governmental regulations
would adversely affect our operations.

The ARC operating facilities are subject to extensive federal, state and local
laws and regulations related to the environment, health and safety and
associated compliance and permitting obligations (including those related to the
use, storage, handling, discharge, emission and disposal of municipal solid
waste and other waste, pollutants or hazardous substances or wastes, or
discharges and air and other emissions) as well as land use and development.
Environmental laws also impose obligations to clean up contaminated properties
or to pay for the cost of such remediation, often upon parties that did not
actually cause the contamination. While we believe that we are currently in
compliance with applicable environmental laws in all material respects, it is
possible that such conditions impacting the ARC operating facilities could be
discovered in the future or that such conditions could be created by future
spills or releases. Compliance with these laws, regulations and obligations
could require substantial capital expenditures. Failure to comply could result
in the imposition of penalties, fines or restrictions on operations and/or
remedial liabilities. The costs and liabilities of any of these results could
adversely affect the operations of one or more of the ARC operating facilities.
Environmental laws and regulations may also limit our ability to operate the ARC
operating facilities at maximum capacity or at all. These laws, regulations and
obligations could change with the promulgation of new laws and regulations or a
change in the interpretation of existing laws and regulations, which could
result in substantially similar risks. Stricter environmental regulations could
materially affect our cash flow which would have an adverse effect on our
financial condition.

The costs of addressing future environmental requirements at the ARC operating
facilities or at disposal facilities where ARC operating facilities have
disposed of waste are difficult to estimate. Although we report that we believe
that all of our operations are compliant in all material respects with the
requirements of environmental laws and regulations, the ARC operating facilities
may not at all times be in compliance with all applicable environmental laws and
regulations and steps to bring our facilities into compliance may limit our
future cash flow.

Certain environmental permits for the ARC operating facilities are subject to
periodic renewal or reissuance. Regulatory authorities may not renew or reissue
the permits. In addition, any renewed or reissued environmental permit may
contain new, more stringent requirements resulting in the need for additional
capital and operating expenditures due to additions to or modifications of the
ARC operating facilities in order to bring the ARC operating facilities into
compliance with the renewed or reissued permits' terms. Certain environmental
permits contain terms that can result in periodic adjustment of operating
limits, which can result in reduced revenue. Any of the following events could
adversely affect the amount of distributions available to us:

o    loss of environmental permits;

o    reduction in allowed operations;

o    failure or delay in the renewal or reissuance of environmental permits;

o    any increase in operating costs resulting from any renewed or reissued
     environmental permit; and

o    any expenditures, penalties, restrictions and/or liabilities resulting from
     any other non-compliance.


                                       30
<PAGE>

Changes in electricity regulation could have an adverse impact on us.

The ARC operating companies derive a significant amount of revenue from the sale
of electric power. The electric power generation business is subject to
substantial regulation and the ARC operating companies are required to comply
with numerous laws and regulations in order to sell the power generated from the
ARC operating facilities. These laws and regulations could be revised and new
laws and regulations could be adopted. The power purchase agreements with
respect to each ARC operating facility could be adversely affected if amendments
to, or a repeal of, existing regulations with respect to the production of
energy were enacted that reduce the benefits currently afforded under the power
purchase agreements. A reduction in benefits could adversely affect the amount
of distributions available to us and our ability to make payment of the
principal of and premium, if any, and interest on our debt. Our business could
be materially and adversely affected by statutory or regulatory changes or
administrative or judicial interpretations of existing statutes, regulations or
licenses that impose more comprehensive or stricter energy regulation on us.



Item 4.  Controls and Procedures

MSW Energy Holdings and Subsidiaries

As of March 31, 2005, the Chief Executive Officer and Chief Financial Officer of
MSW Energy Holdings evaluated the effectiveness of its disclosure controls and
procedures pursuant to Rule 15d-15e of the Exchange Act. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer have each
concluded that these disclosure controls and procedures are effective in timely
alerting them to material information relating to the Company (including its
consolidated subsidiaries) that is required to be included in MSW Energy
Holdings' periodic SEC filings and in ensuring that information required to be
disclosed in reports filed under the Exchange Act are recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission rules and forms.

There were no changes in internal control over financial reporting during the
quarter ended March 31, 2005 that has materially affected, or is reasonably
likely to materially affect our internal control over financial reporting.




                                       31
<PAGE>


PART II  OTHER INFORMATION

Item 1.  Legal Proceedings

Lower Passaic River Study. In August 2004, USEPA notified American Ref-Fuel
Company of Essex County (Essex) that it was potentially liable under CERCLA
Section 107(a) for response actions in the Lower Passaic River Study Area
(LPRSA), a 17 mile stretch of river in northern New Jersey. Essex is one of at
least 52 Potentially Responsible Parties (PRPs) named thus far. USEPA alleges
that hazardous substances found in the LPRSA were being released from the Essex
site, which abuts the river. USEPA's notice letter states that Essex may be
liable for costs related to a proposed $10 million study of the Lower Passaic
River and for unspecified natural resource damages. Considering the history of
industrial and other discharges into the LPRSA from other sources, including
named PRPs, Essex believes that its contribution will be determined to be de
minimus; however, it is not possible at this time to predict that outcome with
certainty or to estimate Essex' liability for the study or any eventual natural
resource damage.

CMW Landfill. Semass Partnership, a subsidiary of Ref-Fuel Semass, has a waste
management agreement (the WMA) dated May 25, 1982, as amended, with the Carver,
Marion, Wareham Regional Refuse Disposal District (CMW). The WMA allows Semass
Partnership to utilize a portion of a landfill (the CMW Landfill), which CMW
leases from Wankinco River, Inc. (Wankinco).

Beginning in May 1997, Wankinco provided several notices purportedly terminating
the lease on the CMW Landfill based upon an allegation that the lease term
automatically expired due to alleged failures to strictly comply with the terms
of the lease. In June 1997, Semass Partnership and CMW filed suit against
Wankinco and A. D. Makepeace Company, Inc., Wankinco's parent company, seeking a
declaratory judgment that Semass Partnership and CMW may continue to operate the
CMW Landfill. Trial of the matter before the court was completed in 2001 and a
decision was received by the Company in December 2002, which decided virtually
all issues in favor of the Semass Partnership. The Semass Partnership avoided
both forfeiture of possession and any liability for damages due to landfill
operations. Wankinco appealed in January 2003, and on August 19, 2004, the
Appellate Court upheld the Trial Court decision in respect of all decisions
related to the alleged lease violations. One ruling unrelated to lease
forfeiture or damages for unlawful possession was remanded because the Judge's
ruling that Semass had not engaged in "an unfair and deceptive act or practice"
applied the law conjunctively rather than disjunctively (as required by the
law). The Appellate Court affirmed the Judge's ruling that there was no
unfairness, but remanded the question of deception for further findings since
the Appellate Court, due to the use of the conjunctive rather than disjunctive,
was unable to infer that the Judge did not find a compensable deceptive act.
Management believes that the Judge's ruling on remand will clarify this issue in
favor of the Company. In addition, Wankinco appealed the Appellate Court's
decision on the lease issues to the Supreme Judicial Court of Massachusetts and,
on September 30, 2004, the Supreme Judicial Court denied Wankinco's Application
for Further Appellate Review. Accordingly, except for the remand discussed
above, the favorable decisions received by Semass have become final and
nonappealable. Apart from this decision, the Semass Partnership and Wankinco
continue litigating several other actions involving regulatory issues at the
landfill.

Management believes that the ultimate resolution of these matters will not have
a material adverse impact on the results of operations, cash flows or financial
position of the Company.


                                       32
<PAGE>

In March 1990, the Semass Partnership, CMW and Wankinco entered into an
agreement related to the CMW Landfill, as amended (the Settlement Agreement),
which requires, among other things, the Semass Partnership to make annual
deposits into an environmental protection trust fund (the Fund) in lieu of
obtaining environmental impairment liability insurance for the CMW Landfill. The
Semass Partnership is required under the Settlement Agreement to deposit
$500,000 annually into the Fund, payable in equal quarterly installments.
Certain additional deposits are required subject to the availability of cash in
accordance with the Loan Agreement. The Semass Partnership's obligation to make
deposits into the Fund ceases when the Fund reaches a balance of $20.0 million
unless the fund limit is increased by agreement of the parties, or absent such
agreement, by arbitration, wherein it is determined the fund limit needs to be
increased to adequately protect against environmental damage. Wankinco by letter
dated March 29, 2005, and pursuant to its rights under the Settlement Agreement
described above, has requested a re-evaluation of the Fund limit and an increase
of such limit to $29.7 million. Management believes that the $20.0 million fund
limit is adequate for this purpose. Proceeds from the Fund are to be used
primarily for remediation of the CMW Landfill in the event of environmental
damage. The Semass Partnership and Wankinco are each entitled to receive
one-half of the balance of the Fund upon final closure of the CMW Landfill and
receipt of required governmental approvals. During first quarter of 2005 and the
year ended December 31, 2004, the Semass Partnership made the required quarterly
deposits into the Fund and charged operations for one-half of the deposits into
the Fund, representing one-half of the balance of the Fund which will be
disbursed to Wankinco upon final closure of the CMW Landfill. Additional charges
to operations may be required in future years if any disbursements are required
from the Fund to remediate any environmental damages. To date, management is not
aware of any such environmental damages. As of March 31, 2005 and December 31,
2004, the balance in the Fund is approximately $15.2 million and $14.0 million,
respectively, and is included in restricted cash and long-term investments. A
corresponding liability, representing approximately one-half of the deposits and
related earnings in the Fund, is included in other long-term liabilities.


Other Matters. The Company is involved in various other claims or litigation in
the ordinary course of business. Management believes that the ultimate
resolution of these matters, either individually or in the aggregate, will not
have a material adverse impact on the future results of operations, cash flows
or financial position of the Company.




Item 2.  Unregistered Sale of Equity Securities and Use of Proceeds.

None.

Item 3.  Defaults Upon Senior Securities.

None.

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

Not applicable.

Item 5.  Other Information.

None.


                                       33
<PAGE>


Item 6.  Exhibits

     (a) Exhibits

3.1         Certificate of Formation of MSW Energy Holdings LLC.*

3.2         Second Amended and Restated Limited Liability Company Agreement of
            MSW Energy Holdings LLC, dated as of April 30, 2004, by and among
            Highstar Renewable Fuels LLC, MSW Acquisition LLC and United
            American Energy Holdings Corp.*

3.3         Amended and Restated Certificate of Incorporation of MSW Energy
            Finance Co., Inc.*

3.4         Bylaws of MSW Energy Finance Co., Inc.*

3.5         Certificate of Amendment to the Certificate of Formation of MSW
            Energy Hudson LLC.*

3.6         Second Amended and Restated Limited Liability Company Agreement of
            MSW Energy Hudson LLC, dated as of June 30, 2003, by MSW Energy
            Holdings LLC.*

4.1         Indenture dated June 25, 2003, by and among MSW Energy Holdings LLC,
            MSW Energy Finance Co., Inc. and Wells Fargo Bank Minnesota,
            National Association as Trustee.*

4.2         Supplemental Indenture dated July 11, 2003, by and among MSW Energy
            Holdings LLC, MSW Energy Finance Co., Inc., MSW Energy Hudson LLC
            and Wells Fargo Bank Minnesota, National Association as Trustee.*

4.3         Form of 8 1/2% Senior Secured Note Due 2010 (included in Exhibit
            4.1).*

4.4         Registration Rights Agreement dated as of June 25, 2003, by and
            among MSW Energy Holdings LLC, MSW Energy Finance Co. Inc., MSW
            Energy Hudson LLC and Credit Suisse First Boston LLC.*

4.5         Pledge and Security Agreement dated as of June 25, 2003, by and
            among MSW Energy Holdings LLC, MSW Energy Finance Co., Inc. and
            Wells Fargo Bank Minnesota, National Association as Collateral
            Agent.*

4.6         Pledge Supplement dated as of June 30, 2003 by MSW Energy Hudson
            LLC.*

4.7         Deposit Agreement, dated as of June 25, 2003, by and among MSW
            Energy Holdings LLC, MSW Energy Finance Co., Inc. and Wells Fargo
            Bank Minnesota, National Association as Collateral Agent and
            Depositary Agent, as amended.*

4.8         Purchase Agreement, dated as of June 11, 2003, by and among MSW
            Energy Holdings LLC, MSW Energy Finance Co., Inc., MSW Energy Hudson
            LLC and Credit Suisse First Boston LLC.*

10.1        Amended and Restated Capital Contribution Agreement, dated as of
            June 24, 2003, by and between Highstar Renewable Fuels LLC and MSW
            Acquisition LLC.*

                                       34
<PAGE>

10.2        Agreement, dated as of June 30, 2003, by and between MSW Energy
            Holdings LLC and Duke Capital Corporation.*

10.3        Escrow Agreement, dated as of June 30, 2003, by and among MSW Energy
            Holdings LLC, Duke Capital Corporation and Wachovia Bank, National
            Association.*

10.4        Amended and Restated Limited Liability Company Agreement of Ref-Fuel
            Holdings LLC, dated as of April 30, 2001, by and between Duke Energy
            Global Asset Development, Inc. and UAE Ref-Fuel LLC, as amended.*

10.5        Equity Contribution Agreement, dated as of April 30, 2001, by and
            among Duke Capital Corporation, United American Energy Corp.,
            Ref-Fuel Holdings LLC (formerly known as Duke/UAE Ref-Fuel LLC) and
            American Ref-Fuel Company LLC.*

10.6        Substitution, Assumption, Amendment and Release Agreement, dated as
            of June 30, 2003, by and among Duke Capital Corporation, United
            American Energy Corp., Ref-Fuel Holdings LLC (formerly known as
            Duke/UAE Ref-Fuel LLC), American Ref-Fuel Company LLC, and MSW
            Energy Holdings LLC.*

10.7        Equity Purchase Agreement, dated as of March 19, 2003, by and
            between MSW Energy Holdings LLC and Duke Energy Global Markets,
            Inc.*

12          Statement re Computation of Ratio of Earnings to Fixed Charges

31(a)       15d-14(a) Certification of John T. Miller for MSW Energy Holdings
            LLC.

31(b)       15d-14(a) Certification of Michael J. Gruppuso for MSW Energy
            Holdings LLC.

31(c)       15d-14(a) Certification of John T. Miller for MSW Energy Finance
            Co., Inc.

31(d)       15d-14(a) Certification of Michael J. Gruppuso for MSW Energy
            Finance Co., Inc.

32(a)       Section 1350 Certification of John T. Miller and Michael J. Gruppuso
            for MSW Energy Holdings LLC.

32(b)       Section 1350 Certification of John T. Miller and Michael J. Gruppuso
            for MSW Energy Finance Co., Inc.

*           Incorporated by Reference to Registration Statement No. 333-109049.




                                       35
<PAGE>



                                   SIGNATURES

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

                 MSW ENERGY HOLDINGS LLC

                 By: /s/ John T. Miller
                     -----------------------------------------------------
                     John T. Miller
                     Chief Executive Officer

                 Date:  May 3, 2005
                      ----------------------------------------------------

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


<TABLE>
<CAPTION>
               Signature                                 Title                       Date
---------------------------------        ---------------------------------      -------------
<S>                                      <C>                                    <C>
/s/ John T. Miller                       Chief Executive Officer (Principal     May 3, 2005
---------------------------------        Executive Officer)
    John T. Miller


/s/ Michael J. Gruppuso                  Chief Financial Officer (Principal     May 3, 2005
---------------------------------        Financial and Accounting Officer)
    Michael J. Gruppuso

</TABLE>




                                       36
<PAGE>






                                   SIGNATURES

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

                       MSW ENERGY FINANCE CO., INC.

                       By: /s/ John T. Miller
                           --------------------------------------------------
                           John T. Miller
                           President and Chief Executive Officer

                       Date:  May 3, 2005
                            -------------------------------------------------

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


<TABLE>
<CAPTION>

               Signature                                 Title                       Date
---------------------------------        ------------------------------------- --------------

<S>                                      <C>                                   <C>
/s/ John T. Miller                       President and Chief Executive          May 3, 2005
---------------------------------        Officer (Principal Executive Officer)
    John T. Miller


/s/ Michael J. Gruppuso                  Chief Financial Officer (Principal     May 3, 2005
---------------------------------        Financial and Accounting Officer)
    Michael J. Gruppuso
</TABLE>


                                       37
<PAGE>

3.1         Certificate of Formation of MSW Energy Holdings LLC.*

3.2         Second Amended and Restated Limited Liability Company Agreement of
            MSW Energy Holdings LLC, dated as of April 30, 2004, by and among
            Highstar Renewable Fuels LLC, MSW Acquisition LLC and United
            American Energy Holdings Corp.*

3.3         Amended and Restated Certificate of Incorporation of MSW Energy
            Finance Co., Inc.*

3.4         Bylaws of MSW Energy Finance Co., Inc.*

3.5         Certificate of Amendment to the Certificate of Formation of MSW
            Energy Hudson LLC.*

3.6         Second Amended and Restated Limited Liability Company Agreement of
            MSW Energy Hudson LLC, dated as of June 30, 2003, by MSW Energy
            Holdings LLC.*

4.1         Indenture dated June 25, 2003, by and among MSW Energy Holdings LLC,
            MSW Energy Finance Co., Inc. and Wells Fargo Bank Minnesota,
            National Association as Trustee.*

4.2         Supplemental Indenture dated July 11, 2003, by and among MSW Energy
            Holdings LLC, MSW Energy Finance Co., Inc., MSW Energy Hudson LLC
            and Wells Fargo Bank Minnesota, National Association as Trustee.*

4.3         Form of 8 1/2% Senior Secured Note Due 2010 (included in Exhibit
            4.1).*

4.4         Registration Rights Agreement dated as of June 25, 2003, by and
            among MSW Energy Holdings LLC, MSW Energy Finance Co. Inc., MSW
            Energy Hudson LLC and Credit Suisse First Boston LLC.*

4.5         Pledge and Security Agreement dated as of June 25, 2003, by and
            among MSW Energy Holdings LLC, MSW Energy Finance Co., Inc. and
            Wells Fargo Bank Minnesota, National Association as Collateral
            Agent.*

4.6         Pledge Supplement dated as of June 30, 2003 by MSW Energy Hudson
            LLC.*

4.7         Deposit Agreement, dated as of June 25, 2003, by and among MSW
            Energy Holdings LLC, MSW Energy Finance Co., Inc. and Wells Fargo
            Bank Minnesota, National Association as Collateral Agent and
            Depositary Agent, as amended.*

4.8         Purchase Agreement, dated as of June 11, 2003, by and among MSW
            Energy Holdings LLC, MSW Energy Finance Co., Inc., MSW Energy Hudson
            LLC and Credit Suisse First Boston LLC.*

10.1        Amended and Restated Capital Contribution Agreement, dated as of
            June 24, 2003, by and between Highstar Renewable Fuels LLC and MSW
            Acquisition LLC.*


<PAGE>

10.2        Agreement, dated as of June 30, 2003, by and between MSW Energy
            Holdings LLC and Duke Capital Corporation.*

10.3        Escrow Agreement, dated as of June 30, 2003, by and among MSW Energy
            Holdings LLC, Duke Capital Corporation and Wachovia Bank, National
            Association.*

10.4        Amended and Restated Limited Liability Company Agreement of Ref-Fuel
            Holdings LLC, dated as of April 30, 2001, by and between Duke Energy
            Global Asset Development, Inc. and UAE Ref-Fuel LLC, as amended.*

10.5        Equity Contribution Agreement, dated as of April 30, 2001, by and
            among Duke Capital Corporation, United American Energy Corp.,
            Ref-Fuel Holdings LLC (formerly known as Duke/UAE Ref-Fuel LLC) and
            American Ref-Fuel Company LLC.*

10.6        Substitution, Assumption, Amendment and Release Agreement, dated as
            of June 30, 2003, by and among Duke Capital Corporation, United
            American Energy Corp., Ref-Fuel Holdings LLC (formerly known as
            Duke/UAE Ref-Fuel LLC), American Ref-Fuel Company LLC, and MSW
            Energy Holdings LLC.*

10.7        Equity Purchase Agreement, dated as of March 19, 2003, by and
            between MSW Energy Holdings LLC and Duke Energy Global Markets,
            Inc.*

12          Statement re Computation of Ratio of Earnings to Fixed Charges

31(a)       15d-14(a) Certification of John T. Miller for MSW Energy Holdings
            LLC.

31(b)       15d-14(a) Certification of Michael J. Gruppuso for MSW Energy
            Holdings LLC.

31(c)       15d-14(a) Certification of John T. Miller for MSW Energy Finance
            Co., Inc.

31(d)       15d-14(a) Certification of Michael J. Gruppuso for MSW Energy
            Finance Co., Inc.

32(a)       Section 1350 Certification of John T. Miller and Michael J. Gruppuso
            for MSW Energy Holdings LLC.

32(b)       Section 1350 Certification of John T. Miller and Michael J. Gruppuso
            for MSW Energy Finance Co., Inc.

*           Incorporated by Reference to Registration Statement No. 333-109049.