SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C.  20549

                             FORM 10-Q

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

         For the Quarterly Period Ended September 30, 1996
                  Commission File Number 33-95928
                                  
                    LS Power Funding Corporation      
       (Exact name of registrant as specified in its charter)


Delaware                                                         81-0502366

(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                         Identification No.)

      402 East Main Street, Bozeman, MT  59715, (406) 587-7397
(Address, including zip code, and telephone number, including area code, of 
registrant's principal executive offices)
                                            

                      LSP-Cottage Grove, L.P.
                LSP-Whitewater Limited Partnership      
       (Exact name of registrant as specified in its charter)

Delaware                                                         81-0493289
Delaware                                                         81-0493287

(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                     Identification Numbers)

      402 East Main Street, Bozeman, MT  59715, (406) 587-6325
      402 East Main Street, Bozeman, MT  59715, (406) 587-6122
(Address, including zip code, and telephone number, including area code, of 
registrant's 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, and (2) has been subject to such 
filing requirements for the past 90 days.       Yes  X     No      


                                  1

<PAGE>
                    LS Power Funding Corporation
                        LSP-Cottage Grove, L.P.
                  LSP-Whitewater Limited Partnership

                            Form 10-Q Index

                                                                   Page
                              PART I

   Item 1.  Financial Statements.................................... 3
   Item 2.  Management's Discussion and Analysis of
             Financial Condition and Results of Operations.......... 3

                             PART II

   Item 1.  Legal Proceedings....................................... 3
   Item 2.  Changes in Securities................................... 4
   Item 3.  Defaults Upon Senior Securities......................... 4
   Item 4.  Submission of Matters to a Vote of Security Holders..... 4
   Item 5.  Other Information....................................... 4
   Item 6.  Exhibits and Reports on Form 8-K........................ 4

            Signatures.............................................. 5

            Financial Statement Index............................. F-1


                                   2                                     

<PAGE>
PART I/ITEM 1.  FINANCIAL STATEMENTS

   See financial statements commencing at F-1.  These unaudited financial 
statements have been prepared pursuant to the rules and regulations of the 
Securities and Exchange Commission (the "Commission").  Certain information
and footnote disclosures normally included in financial statements prepared in 
accordance with generally accepted accounting principles have been condensed 
or omitted.  While LS Power Funding Corporation ("Funding"), LSP-Cottage 
Grove, L.P. ("Cottage Grove") and LSP-Whitewater Limited Partnership 
("Whitewater" and, together with Cottage Grove, the "Partnerships") believe 
that the disclosures made are adequate to make the information presented not 
misleading, these financial statements should be read in conjunction with the 
audited financial statements included in the Annual Report on Form 10-K for 
the year ended December 31, 1995, filed by Funding, Cottage Grove and 
Whitewater.


PART I/ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
                 AND RESULTS OF OPERATIONS

General

   Since their formation in 1993, the Partnerships have been developing and 
constructing their respective power plants and have generated no operating 
revenues or expenses. 

Cottage Grove

   For the three months ended September 30, 1996, Cottage Grove capitalized 
construction costs totaling approximately $23,134,000.  At September 30, 1996,
Cottage Grove's investments held by trustee totaled $52,457,963, of which 
$6,043,000 was held in a fund reserved for debt service, and $9,191,610 was 
held in a contingency fund to pay for project cost overruns.  Cottage Grove 
transferred $12,614 from the contingency fund during the third quarter of 
1996 to fund change orders to its construction contract.

Whitewater

   For the three months ended September 30, 1996, Whitewater capitalized 
construction costs totaling approximately $24,299,000.  At September 30, 1996,
Whitewater's investments held by trustee totaled $62,913,421, of which 
$6,900,000 was held in a fund reserved for debt service, and $10,423,134 was
held in a contingency fund to pay for project cost overruns.  Whitewater 
transferred $0 from the contingency fund during the third quarter of 1996.


PART II/ITEM 1.  LEGAL PROCEEDINGS 

Whitewater

   A series of decisions of the Wisconsin Public Service Commission ("WPSC")
selecting the gas-fired cogeneration facility to be located in Whitewater, 
Wisconsin (the "Whitewater Project") and approving the power sales contract 
were challenged (the "Selection Order Litigation").  The WPSC's order granting 
the Whitewater Project a Certificate of Public Convenience and Necessity 
("CPCN") was also challenged (the "CPCN Litigation").  See Whitewater's Annual 
Report on Form 10-K for the year ended December 31, 1995 for a description of 
the Selection Order Litigation and the CPCN Litigation.

   In the Selection Order Litigation, the decisions of the WPSC were affirmed 
by the Circuit Court, Dane County and by the Wisconsin Court of Appeals, 
District 4 in all respects relevant to the WPSC's selection of the Whitewater
Project as the winning project.  The subsequent petition of Repap Wisconsin, 
Inc. to the Wisconsin Supreme Court requesting further review of the case was 
denied by the Wisconsin Supreme Court on July 29, 1996, thus terminating
the Selection Order Litigation.

   Following the termination of the Selection Order Litigation, the parties 
to the CPCN Litigation agreed to dismiss that case with prejudice and an Order 
for Dismissal was issued on November 4, 1996, thus terminating the
CPCN Litigation.


                                  3

<PAGE>
PART II/ITEM 2.  CHANGES IN SECURITIES

   None.


PART II/ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

   None.


PART II/ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   None.


PART II/ITEM 5.  OTHER INFORMATION

   None.


PART II/ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

   None.

(b) Reports on Form 8-K

   No reports on Form 8-K have been filed during the last quarter of the 
period covered by this report.


                                  4

<PAGE>
SIGNATURES:  Pursuant to the requirements of the Securities Exchange Act of 
1934, the registrant has duly caused this report to be signed on its behalf 
of the undersigned thereunto duly authorized.

LS POWER FUNDING CORPORATION

   
By: /s/ Michael S. Liebelson
   Name:  Michael S. Liebelson
   Title:  Managing Director and Treasurer
   Date:  November 13, 1996


LSP-COTTAGE GROVE, L.P.

By:  LSP-Cottage Grove, Inc.
Its: General Partner
     
By: /s/ Michael S. Liebelson
     Name:  Michael S. Liebelson
     Title:  Managing Director and Treasurer
     Date:  November 13, 1996


LSP-WHITEWATER LIMITED PARTNERSHIP

By:  LSP-Whitewater I, Inc.
Its: General Partner
     
By: /s/ Michael S. Liebelson
     Name:  Michael S. Liebelson
     Title:  Managing Director and Treasurer
     Date:  November 13, 1996


                                  5

<PAGE>
                    LS Power Funding Corporation
                       LSP-Cottage Grove, L.P.
                  LSP-Whitewater Limited Partnership

                     Financial Statement Index
                                                                          Page
LS POWER FUNDING CORPORATION
   Balance sheets as of September 30, 1996 and December 31, 1995.......... F-2
   Statements of operations for the three months ended 
     September 30, 1996 and 1995, the nine months ended 
     September 30, 1996, and the period from Inception 
     (June 23, 1995) to September 30, 1995................................ F-3
   Statements of cash flows for the nine months ended
     September 30, 1996, and the period from Inception
     (June 23, 1995) to September 30, 1995................................ F-4
   Notes to financial statements.......................................... F-5
 
LSP-COTTAGE GROVE, L.P.
   Balance sheets as of September 30, 1996 and December 31, 1995.......... F-6
   Statements of cash flows for the nine months ended 
     September 30, 1996 and 1995, and the period from Inception
     (December 14, 1993) to September 30, 1996............................ F-7
   Notes to financial statements.......................................... F-8

LSP-WHITEWATER LIMITED PARTNERSHIP
   Balance sheets as of September 30, 1996 and December 31, 1995.......... F-9
   Statements of cash flows for the nine months ended
     September 30, 1996 and 1995, and the period from Inception
     (December 14, 1993) to September 30, 1996........................... F-10
   Notes to financial statements......................................... F-11


                                  F-1

<PAGE>
                       LS POWER FUNDING CORPORATION

                              BALANCE SHEETS


                                               September 30,       December 31,
                                                   1996                1995
                                                (Unaudited)
                                  ASSETS
CURRENT ASSETS:                                                   
 Cash                                          $      1,000       $      1,000
 Accrued interest receivable
  on First Mortgage Bonds                         6,471,549                ---
   Total Current Assets                           6,472,549              1,000

INVESTMENT IN FIRST MORTGAGE BONDS              332,000,000        332,000,000

     Total Assets                              $338,472,549       $332,001,000


                   LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITY - Interest payable 
 on Senior Secured Bonds                       $  6,471,549       $        ---

SENIOR SECURED BONDS PAYABLE                    332,000,000        332,000,000

     Total Liabilities                          338,471,549        332,000,000


STOCKHOLDERS' EQUITY:
 Common stock, $.01 par value, 
   1,000 shares authorized, 100 shares
   issued and outstanding                                 1                  1
 Additional paid-in capital                             999                999

     Total Stockholders' Equity                       1,000              1,000


     Total Liabilities and 
      Stockholders' Equity                     $338,472,549       $332,001,000


              See accompanying notes to financial statements.


                                  F-2

<PAGE>
                       LS POWER FUNDING CORPORATION

                          STATEMENTS OF OPERATIONS
                                 (Unaudited)


                                                   Nine Months  From Inception
                             Three Months             Ended     (June 23, 1995)
                          Ended September 30,       Sept. 30,    to Sept. 30,
                          1996          1995           1996          1995

Interest Income        $6,471,549    $6,524,740    $19,414,647    $6,524,740

Interest Expense        6,471,549     6,524,740     19,414,647     6,524,740

Net Income (Loss)      $      ---    $      ---    $       ---    $      ---


              See accompanying notes to financial statements.


                                  F-3

<PAGE>
                       LS POWER FUNDING CORPORATION

                          STATEMENTS OF CASH FLOWS
                                 (Unaudited)


                                            Nine Months        From Inception
                                               Ended         (June 23, 1995) to
                                           Sept. 30, 1996      Sept. 30, 1995

Cash Flows From Operating Activities             $  ---         $         --- 

Cash Flows From Investing Activities:
 Investment in First Mortgage Bonds                 ---          (332,000,000)
Cash used by investing activities                   ---          (332,000,000)

Cash Flows From Financing Activities:
 Proceeds from Senior Secured Bonds                 ---           332,000,000 
 Proceeds from sale of common stock                 ---                 1,000 
Cash provided by financing activities               ---           332,001,000 

Increase in cash                                    ---                 1,000 

Cash, beginning of period                         1,000                   --- 
Cash, end of period                              $1,000         $       1,000 


              See accompanying notes to financial statements.


                                  F-4

<PAGE>
                       LS POWER FUNDING CORPORATION
                        NOTES TO FINANCIAL STATEMENTS


1.  FINANCIAL STATEMENTS

   The balance sheet as of September 30, 1996, and the statements of operations
and cash flows for the periods ended September 30, 1996 and 1995 have been 
prepared by LS Power Funding Corporation ("Funding"), without audit.  In the
opinion of management, these financial statements include all adjustments 
(consisting of normal recurring adjustments) necessary to present fairly its 
financial position as of September 30, 1996, and the results of its 
operations and its cash flows for the periods ended September 30, 1996 
and 1995.

   Funding was established on June 23, 1995; therefore, statements of 
operations and cash flows for the period from June 23, 1995 to 
September 30, 1995 are presented.

   The unaudited financial statements included herein have been prepared 
pursuant to the rules and regulations of the Securities and Exchange 
Commission.  Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted 
accounting principles have been condensed or omitted.  While Funding believes 
that the disclosures made are adequate to make the information presented not
misleading, these financial statements should be read in conjunction with 
Funding's audited financial statements included in Funding's Annual Report on 
Form 10-K for the year ended December 31, 1995.


2.  ORGANIZATION

   Funding was established on June 23, 1995 as a special purpose Delaware 
corporation to issue debt securities in connection with financing construction 
of two gas fired cogeneration facilities, one located in Cottage Grove, 
Minnesota (the "Cottage Grove Project") and the other located in Whitewater, 
Wisconsin (the "Whitewater Project").  LSP-Cottage Grove, L.P.("Cottage Grove")
and LSP-Whitewater Limited Partnership ("Whitewater") are Delaware limited 
partnerships established to develop, finance, construct, own, operate and 
manage the facilities at Cottage Grove and Whitewater, respectively.  Cottage 
Grove and Whitewater each own 50% of the outstanding stock of Funding.  
Funding's sole business activities are limited to maintaining its organization 
and activities necessary pursuant to the offering of debt securities and 
its acquisition of debt securities issued by Cottage Grove and Whitewater.


                                  F-5

<PAGE>
                          LSP-COTTAGE GROVE, L.P.
          (a Delaware Limited Partnership in the Development Stage)

                              BALANCE SHEETS

                                                   Sept. 30,      December 31,
                                                     1996             1995
                                                  (Unaudited)
                                  ASSETS

CURRENT ASSETS:
 Cash                                           $     36,694     $     55,030
 Other current assets                                    ---           12,926
     Total Current Assets                             36,694           67,956

INVESTMENTS HELD BY TRUSTEE, stated at
 cost which approximates market value             52,457,963      111,303,563

PLANT, PROPERTY AND EQUIPMENT                    106,086,558       42,719,871

DEBT ISSUANCE AND FINANCING COSTS                  6,834,157        6,859,575

OTHER ASSETS                                             500              500

   Total Assets                                 $165,415,872     $160,951,465


                     LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
 Accounts payable                               $  7,393,516     $  5,950,465
 Interest payable on First Mortgage Bonds          3,021,356              ---
   Total Current Liabilities                      10,414,872        5,950,465

FIRST MORTGAGE BONDS PAYABLE                     155,000,000      155,000,000

   Total Liabilities                             165,414,872      160,950,465

PARTNERS' CAPITAL                                      1,000            1,000

   Total Liabilities and Partners' Capital      $165,415,872     $160,951,465


              See accompanying notes to financial statements.


                                  F-6

<PAGE>
                          LSP-COTTAGE GROVE, L.P.
         (a Delaware Limited Partnership in the Development Stage)

                          STATEMENTS OF CASH FLOWS
                                (Unaudited)

                                                                 December 14,
                                                               1993 (inception)
                                   Nine Months Ended Sept. 30,   to Sept. 30,
                                      1996           1995            1996
Cash Flows From Investing 
 Activities:
  Acquisition of land and 
   improvements                   $        ---  $     (97,589)  $     (97,590)
  Payments on construction 
   in progress                     (62,267,572)   (25,878,131)   (102,556,708)
  Investments held by trustee              ---   (155,000,000)   (155,000,000)
  Investments drawn for 
   construction                     62,402,584     32,969,726     109,812,630 
  Investment in LS Power 
   Funding Corporation                     ---           (500)           (500)
Cash provided by (used in) 
 investing activities                  135,012   (148,006,494)   (147,842,168)

Cash Flows From Financing 
 Activities:
  Debt issuance and financing 
   costs                              (153,348)    (6,928,204)     (7,122,138)
  Proceeds from First 
   Mortgage Bonds                          ---    155,000,000     155,000,000 
  Capital contributions                    ---            ---           1,000
Cash provided by (used in)
 financing activities                 (153,348)   148,071,796     147,878,862 

Increase (decrease) in cash            (18,336)        65,302          36,694 

Cash, beginning of period               55,030          1,000             --- 
Cash, end of period               $     36,694  $      66,302   $      36,694 


RECONCILIATION OF CHANGES IN
 CONSTRUCTION IN PROGRESS
 Increase in total 
  construction in progress        $(63,366,687) $ (28,857,658)  $(105,988,968)
 Amortization of debt 
  issuance and financing costs         178,766         54,326         287,981 
 Interest income on 
  investments held by trustee       (3,556,984)    (1,908,932)     (7,270,593)
 Decrease in other current 
  assets                                12,926            ---             --- 
 Increase in accounts payable        1,443,051      1,787,943       7,393,516 
 Increase in accrued 
  interest payable                   3,021,356      3,046,190       3,021,356 
Payments on construction
 in progress                      $(62,267,572) $ (25,878,131)  $(102,556,708)


              See accompanying notes to financial statements.


                                  F-7

<PAGE>
                          LSP-COTTAGE GROVE, L.P.
          (a Delaware Limited Partnership in the Development Stage)

                       NOTES TO FINANCIAL STATEMENTS


1.  FINANCIAL STATEMENTS

   The balance sheet as of September 30, 1996, and the statements of cash 
flows for the periods ended September 30, 1996 and 1995 have been prepared 
by LSP-Cottage Grove, L.P. (the "Partnership"), without audit.  In the opinion 
of management, these financial statements include all adjustments (consisting 
of normal recurring adjustments) necessary to present fairly its financial 
position as of September 30, 1996, and its cash flows for the periods ended 
September 30, 1996 and 1995.

   The unaudited financial statements included herein have been prepared 
pursuant to the rules and regulations of the Securities and Exchange 
Commission.  Certain information and footnote disclosures normally included 
in financial statements prepared in accordance with generally accepted 
accounting principles have been condensed or omitted.  While the Partnership 
believes that the disclosures made are adequate to make the information 
presented not misleading, these financial statements should be read in 
conjunction with the Partnership's audited financial statements included in 
the Partnership's Annual Report on Form 10-K for the year ended 
December 31, 1995.


2.  ORGANIZATION

   The Partnership is a Delaware limited partnership that was formed on 
December 14, 1993 to develop, finance, construct, own and operate a gas-fired 
cogeneration facility with a design capacity of approximately 245 megawatts 
to be located in Cottage Grove, Minnesota (the "Cottage Grove Project").  The
Partnership holds a 50% equity ownership interest in LS Power Funding 
Corporation ("Funding"), which was established on June 23, 1995 as a special 
purpose Delaware corporation to issue debt securities in connection with 
financing construction of the Cottage Grove Project and a similar gas-fired 
cogeneration facility to be located in Whitewater, Wisconsin (the "Whitewater 
Project").  On June 30, 1995, a portion of the proceeds from the offering and 
sale of the debt securities issued by Funding was used to purchase $155 
million of debt securities issued simultaneously by the Partnership.


                                  F-8

<PAGE>
                    LSP-WHITEWATER LIMITED PARTNERSHIP
         (a Delaware Limited Partnership in the Development Stage)

                              BALANCE SHEETS

                                                Sept. 30,         December 31,
                                                  1996                1995
                                               (Unaudited)
                                  ASSETS

CURRENT ASSETS:
 Cash                                         $     86,843        $     71,441
 Other current assets                                  575                 575
     Total Current Assets                           87,418              72,016

INVESTMENTS HELD BY TRUSTEE, stated at
 cost which approximates market value           62,913,421         126,688,250

PLANT, PROPERTY AND EQUIPMENT                  118,384,598          49,531,408

DEBT ISSUANCE AND FINANCING COSTS                6,930,074           6,958,788

OTHER ASSETS                                           500                 500

   Total Assets                               $188,316,011        $183,250,962


                     LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
 Accounts payable                             $  7,864,818        $  6,249,962
 Interest payable on 
  First Mortgage Bonds                           3,450,193                 ---
   Total Current Liabilities                    11,315,011           6,249,962

FIRST MORTGAGE BONDS PAYABLE                   177,000,000         177,000,000

   Total Liabilities                           188,315,011         183,249,962


PARTNERS' CAPITAL                                    1,000               1,000

   Total Liabilities and Partners' Capital    $188,316,011        $183,250,962


              See accompanying notes to financial statements.


                                  F-9

<PAGE>
                    LSP-WHITEWATER LIMITED PARTNERSHIP
         (a Delaware Limited Partnership in the Development Stage)

                          STATEMENTS OF CASH FLOWS
                                (Unaudited)

                                                                 December 14,
                                                               1993 (inception)
                                   Nine Months Ended Sept. 30,   to Sept. 30,
                                      1996            1995           1996
Cash Flows From Investing
 Activities:
  Acquisition of land and
   improvements                 $  (2,146,986)  $  (1,391,295)  $  (3,538,281)
  Deposits for land purchase        2,001,221      (1,975,174)            --- 
  Payments on construction
   in progress                    (67,522,392)    (28,381,278)   (111,506,493)
  Investments held by trustee             ---    (177,000,000)   (177,000,000)
  Investments drawn for 
   construction                    67,836,907      38,873,186     122,354,556 
  Investment in LS Power 
   Funding Corporation                    ---            (500)           (500)
Cash provided by (used in)
 investing activities                 168,750    (169,875,061)   (169,690,718)

Cash Flows From Financing
 Activities:
  Debt issuance and
   financing costs                   (153,348)     (7,027,805)     (7,223,439)
  Proceeds from 
   First Mortgage Bonds                   ---     177,000,000     177,000,000 
  Capital contributions                   ---             ---           1,000 
Cash provided by (used in)
 financing activities                (153,348)    169,972,195     169,777,561 

Increase in cash                       15,402          97,134          86,843 

Cash, beginning of period              71,441           1,000             --- 
Cash, end of period              $     86,843   $      98,134   $      86,843 


RECONCILIATION OF CHANGES IN
 CONSTRUCTION IN PROGRESS
 Increase in total
  construction in progress       $(68,707,425)  $ (31,713,463)  $(114,846,317)
 Amortization of debt issuance 
  and financing costs                 182,062          55,345         293,365 
 Interest income on 
  investments held by trustee      (4,062,078)     (2,135,513)     (8,267,977)
 Increase in other 
  current assets                          ---            (675)           (575)
 Increase in accounts payable       1,614,856       1,934,478       7,864,818 
 Increase in accrued
  interest payable                  3,450,193       3,478,550       3,450,193 
Payments on 
 construction in progress        $(67,522,392)  $ (28,381,278)  $(111,506,493)


              See accompanying notes to financial statements.


                                  F-10

<PAGE>
                    LSP-WHITEWATER LIMITED PARTNERSHIP
       (a Delaware Limited Partnership in the Development Stage)

                      NOTES TO FINANCIAL STATEMENTS


1.  FINANCIAL STATEMENTS

   The balance sheet as of September 30, 1996, and the statements of cash 
flows for the periods ended September 30, 1996 and 1995 have been prepared by 
LSP-Whitewater Limited Partnership (the "Partnership"), without audit.  In the 
opinion of management, these financial statements include all adjustments 
(consisting of normal recurring adjustments) necessary to present fairly 
its financial position as of September 30, 1996, and its cash flows for the 
periods ended September 30, 1996 and 1995.

   The unaudited financial statements included herein have been prepared 
pursuant to the rules and regulations of the Securities and Exchange 
Commission.  Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  While the Partnership believes 
that the disclosures made are adequate to make the information presented not 
misleading, these financial statements should be read in conjunction with the 
Partnership's audited financial statements included in the Partnership's 
Annual Report on Form 10-K for the year ended December 31, 1995.


2.  ORGANIZATION

   The Partnership is a Delaware limited partnership that was formed on 
December 14, 1993 to develop, finance, construct, own and operate a gas-fired 
cogeneration facility with a design capacity of approximately 245 megawatts 
to be located in Whitewater, Wisconsin (the "Whitewater Project").  The 
Partnership holds a 50% equity ownership interest in LS Power Funding 
Corporation ("Funding"), which was established on June 23, 1995 as a special 
purpose Delaware corporation to issue debt securities in connection with 
financing construction of the Whitewater Project and a similar gas-fired 
cogeneration facility to be located in Cottage Grove, Minnesota (the "Cottage 
Grove Project").  On June 30, 1995, a portion of the proceeds from the 
offering and sale of the debt securities issued by Funding was used to 
purchase $177 million of debt securities issued simultaneously by the
Partnership.


                                  F-11