SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996

Commission file number   0-24240  

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

               Delaware                                22-3105824
       (State or Other Jurisdiction        (I.R.S. Employer Identification No.)
    of Incorporation or Organization)

c/o Ridgewood Power Corporation, 947 Linwood Avenue, Ridgewood,
 New Jersey 07450-2939 
(Address of Principal Executive Offices)                             (Zip Code)

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

Securities Registered Pursuant to Section 12(b) of the Act:  None

Securities Registered Pursuant to Section 12(g) of the Act:

Shares of Beneficial Interest
(Title of Class)

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

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

     There is no market for the Shares.  The aggregate capital 
contributions made for the Registrant's voting Shares held by non-
affiliates of the Registrant at March 21, 1997 was $10,550,000.

PART I

Item 1.  Business.

Forward-looking statement advisory

This Annual Report on Form 10-K, as with some other 
statements made by the Trust from time to time, has forward-
looking statements.  These statements discuss business 
trends and other matters relating to the Trust's future 
results and the business climate and are found, among 
other places, at Items 1(c)(2)(iv), 1(c)(3), 1(c)(4), 1(c)(6)(ii) 
and 7.  In order to make these statements, the Trust has had to 
make assumptions as to the future.  It has also had to 
make estimates in some cases about events that have 
already happened, and to rely on data that may be found 
to be inaccurate at a later time.  Because these 
forward-looking statements are based on assumptions, 
estimates and changeable data, and because any attempt to 
predict the future is subject to other errors, what happens 
to the Trust in the future may be materially different from 
the Trust's statements here.  

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

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

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



(a)  General Development of Business.

     Ridgewood Electric Power Trust I (the "Trust") was organized as 
a 
Delaware business trust on May 9, 1994, for the purpose of acquiring 
all of the assets and carrying on the business of Ridgewood Energy 
Electric Power, L.P. (the "Partnership"), a Delaware limited 
partnership which was organized in March 1991, to participate in the 
development, construction and operation of independent power 
generating facilities ("Projects").  On June 15, 1994, with the 
approval of the partners, the Partnership was combined into the 
Trust, 
which assumed all of the Partnership's assets and liabilities.

     The predecessor Partnership raised $10.5 million in a single 
private offering conducted in 1991 and early 1992.  Substantially 
all of those funds were applied prior to 1995 to the purchase of 
interests in the three Projects described below, to funding 
terminated activities and to defray the fees and expenses of the 
offering and the Partnership.

     The Trust made an election to be treated as a "business 
development company" under the Investment Company Act of 1940, as 
amended ( the "1940 Act").  On May 26, 1994 the Trust notified the 
Securities and Exchange Commission of such election and registered 
its 
shares of beneficial interest (the "Investor Shares") under the 
Securities Exchange Act of 1934, as amended (the "1934 Act").  On 
June 
25, 1994 the election and registration became effective.  The Trust 
currently has 218 holders of record of Investor Shares.

     Ridgewood Power Corporation (the "Managing Shareholder"), a 
Delaware corporation, is the Managing Shareholder of the Trust and 
as 
such has direct and exclusive discretion in the management and 
control 
of the affairs of the Trust (subject to the general supervision and 
review of the Independent Trustees and the Managing Shareholder 
acting 
together as the Board of the Trust for the purposes of the 1940 
Act). 
 Ridgewood Energy Holding Corporation ("Ridgewood Holding"), a 
Delaware corporation, is the Corporate Trustee of the Trust.  The 
Corporate Trustee acts on the instructions of the Managing 
Shareholder 
and is not authorized to take independent discretionary action on 
behalf of the Trust.  The Independent Trustees do not have any 
management or administrative powers over the Trust or its property 
other than as expressly authorized or required by the Declaration of 
Trust of the Trust (the "Declaration") or the 1940 Act.  See Item 
10. 
- Directors and Executive Officers of the Registrant below for a 
further description of the management of the Trust.

(b)  Financial Information about Industry Segments.

     The Trust operates in only one industry segment:  investing in 
independent power generation.

(c)  Narrative Description of Business.

     (1)  General Description.

     The Trust was formed to participate in the development, 
construction and operation of independent electric power projects 
that 
generate electricity for sale to utilities and other users.  The 
Trust 
has invested its funds in three such projects:  the Olinda Project, 
a 
five megawatt capacity electric generating plant fueled by methane 
gas 
from a local landfill in Brea, Orange County, California; the South 
Boston Project (previously designated as the "Lynchburg 
Project"), a three megawatt capacity electric generating plant at 
South Boston, Virginia that burns waste fuel oil prepared in part by 
an on-site waste oil processing facility; and the Stillwater 
Project, 
a 3.5 megawatt hydroelectric facility located on the Hudson River 
north of Albany, New York.

     These Projects are Qualifying Facilities, which are generally 
exempt from federal and state regulations which apply to investor-
owned electric utilities.  As described below, under current law, 
utilities are required to purchase electricity generated by 
Qualifying 
Facilities under terms generally favorable to the Qualifying 
Facilities.

     Historically, producers of electric power in the United States 
consisted of regulated utilities and of industrial users that 
produced 
electricity to satisfy their own needs.  The independent power 
industry in the United States was created by federal legislation 
passed in response to the energy crises of the 1970s.  The Public 
Utility Regulatory Policies Act of 1978, as amended ("PURPA"), 
requires utilities to purchase electric power from "Qualifying 
Facilities" (as defined in PURPA), including "cogeneration 
facilities" 
and "small power producers," and also exempts these Qualifying 
Facilities from most utility regulatory requirements.  Under PURPA, 
Projects that are Qualifying Facilities are generally not subject to 
federal regulation, including the Public Utility Holding Company Act 
of 1935, as amended, and state regulation.  Furthermore, PURPA 
generally requires electric utilities to purchase electricity 
produced 
by Qualifying Facilities at the utility's avoided cost of producing 
electricity (i.e., the incremental costs the utility would otherwise 
face to generate electricity itself or purchase electricity from 
another source).  

     The electricity produced by each Project is sold to the local 
electric utility company under long-term purchase contracts ("Power 
Contracts"), or is used in part on site to power equipment.

     As discussed below, the Trust is a "business development 
company" 
under the Investment Company Act of 1940.  In accounting for its 
Projects, it treats each Project as a portfolio investment that is 
not 
consolidated with the Trust's accounts.  Accordingly, the revenues 
and 
expenses of each Project are not reflected in the Trust's financial 
statements and only cash distributions are included, as revenue, 
when 
received.  Accordingly, the recognition of revenue from Projects by 
the Trust is dependent upon the timing of distributions from 
Projects 
by the Managing Shareholder.  As discussed below and at Item 5.  
Market for Registrant's Common Equity and Related Stockholder 
Matters, 
distributions from Projects may include both income and capital 
components.

     (2)  The Trust's Investments.

     (i)  Stillwater Project.  In October 1991, the Trust acquired 
certain equity rights with respect to a 3.1 megawatt hydroelectric 
facility which was then under construction on the Hudson River in 
the 
village of Stillwater, New York (approximately 30 miles northeast of 
Albany) at the site of a pre-existing 800 foot wide masonry dam 
structure (the "Stillwater Project").  These equity rights were 
purchased by the Trust from Long Lake Energy Corporation for a 
purchase price of $750,000.  Subsequently, the Trust and affiliates 
of 
the general contractor and affiliates of the equipment supplier 
formed 
Stillwater Hydro Partners, L.P. ("SHP") to continue development of 
the 
Stillwater Project, with the Trust holding a 32.5% partnership 
interest in SHP.

     The other partners in SHP have provided all of the equity 
investment necessary to complete the Stillwater Project.  In 
addition, 
the CIT Group/Capital Equipment Financing Inc. ("CIT") a nationally 
recognized project lender which is a joint venture between Chemical 
Bank, N.A. and Dai-Ichi Kangyo Bank (a large Japanese bank) provided 
a 
variable rate construction loan to complete the Stillwater Project. 
 
The Stillwater Project commenced commercial operation in May 1993.

     In July 1994, the CIT construction loan was converted to a 
fixed 
rate 15-year term loan in the principal amount of approximately 
$8,050,000.  In addition to the fixed interest payments, CIT is also 
entitled to receive, as additional interest, 22.5% of the available 
cash flow of the Stillwater Project.  The term loan is payable only 
by 
SHP, and is non-recourse to the Trust.

     In May 1994, the Trust exercised its rights to exchange its 
32.5% 
partnership interest in SHP for a fixed preferred partnership 
distribution of $1 million, plus a compound annual return of 12% 
thereon until paid in full.  A writedown of $162,000 was taken in 
1993.  Over the nine year schedule of annual payments, the Trust 
expects to receive total payments of approximately $1,720,000, of 
which approximately $126,000 has already been received.  SHP is 
required to apply substantially all of SHP's available cash flow 
after 
funding of debt service (up to a maximum amount each year) to 
satisfy 
the payment obligation to the Trust, with any shortfalls to be 
carried 
forward with interest into subsequent years.  

     In November 1994, the amount of the term loan was increased by 
CIT to approximately $8,995,000, reflecting the receipt by SHP of 
certain amendments to its licenses and permits to enable the 
Stillwater Project to capture additional water flow across the dam 
and 
thereby increase its capacity to 3.5 megawatts, which might increase 
revenue from the sale of electricity.  The projections furnished by 
SHP to CIT in connection with such increase indicated sufficient 
annual cash flow to permit SHP to meet its payment obligations to 
the 
Trust as described above.

     However, the ultimate ability of SHP to meet its debt service 
payment and payment obligations to the Trust is dependent on the 
actual operating performance of the Stillwater Project, which, in 
turn, is largely dependent upon water levels in the Hudson River.  
In 1995, the Hudson River basin experienced a severe drought, 
resulting in Hudson River water levels which were substantially 
below normal. Although increased precipitation in late 1995 and 
early 1996 brought flow levels back toward the norm, high water 
flows damaged portions of the facility, including the recently 
installed modifications for capturing additional water flow.  
Although there is insurance coverage for the damage, necessary 
delays in repairing the facility and regulatory limitations on 
construction scheduling will cause electricity output to be reduced 
into 1997.

     As a result, all available cash flow from the Stillwater 
Project is being applied to meet debt service requirements.  Until 
water flows return to expected levels, repairs are completed and the 
current arrears in debt servicing are made up, it appears likely 
that most, if not all, of the payments due to the Trust will be 
deferred and carried forward, with interest, into subsequent years. 
 The Trust does not expect to receive a distribution from the 
Project in 1997.

     Electricity generated by the Stillwater Project is sold to 
Niagara Mohawk Power Corporation under a long-term Power Contract 
with a remaining term of 31 years.  Niagara Mohawk has argued before 
the New York Public Service Commission, the state agency that 
regulates the electric utility industry, and the Federal Energy 
Regulatory Commission ("FERC") that rates it pays to purchase 
electricity under long-term Qualifying Facility contracts are 
uneconomic and that it should be allowed to abrogate those 
contracts.  In April 1995 FERC rejected Niagara Mohawk's application 
and the New York State Public Service Commission has also refused 
the requested relief.  

     March 11, 1997 the New York Times reported that Niagara Mohawk 
had agreed with independent power producers to buy out the Power 
Contracts with independent power producers that were above current 
market levels.  The estimated cost is $4 billion (to be paid 10% in 
cash and 90% in Niagara Mohawk securities) and is subject to 
approvals 
from shareholders and the New York Public Service Commission and 
Niagara Mohawk's ability to raise the necessary funds.  The Trust 
has not yet been advised of any proposal from Niagara Mohawk for a 
buy-out of the Stillwater Project's Power Contract.

     (ii)  South Boston Project.  The Trust made an initial $2.8 
million equity investment in a 3 megawatt electrical generating 
facility that was constructed in an industrial park at South Boston, 
Virginia (the "South Boston Project").  The facility uses waste oil 
as 
its primary fuel source for three refurbished reciprocating diesel 
engine generators.  The Trust's investment covered all development 
and 
construction costs of the facility.

     Construction of the facility began in January 1993.  The 
facility 
began commercial operations in June 1993, but did not operate at 
full 
capacity until December 1993 because of start-up testing, debugging 
and maintenance.

     To improve the economic performance of the Project, the Trust 
built a new fuel processing facility adjacent to the generating 
facility that uses the heat absorbed in the generators' coolant so 
that the waste oil can be processed on-site rather than purchased 
from 
off-site processors. The construction cost of the fuel processing 
facility was approximately $800,000, thereby raising the total 
projected investment in the Project to approximately $3.5 million.  
In 
1995, the Managing Shareholder advanced $570,000 to the Trust to 
help 
finance the construction costs.

     In December 1994 an equipment failure caused significant damage 
to one of the three diesel engines and its turbocharger.  Because of 
inability to find a working replacement turbocharger, the unit was 
not put back into service until July 1995 at a repair cost of 
approximately $54,000.  In May 1995, another engine failed, 
requiring a replacement of the engine which was completed in 
December 1995 at a cost of approximately $228,000.  The Trust 
successfully claimed against its insurer for substantially all of 
the replacement and repair costs and also received payment under its 
business interruption insurance policy for a portion of the lost 
electricity sales.  Further, the Trust purchased a backup .5 
megawatt engine generator set in May 1995 to mitigate losses and 
provide relief for maintenance and other outages. 

     During 1996, work continued on the waste oil plant, which was 
financed by additional advances of approximately $260,000 from the 
Managing Shareholder.  Because of the need to apply cash flow to 
completing the waste oil plant and because of the prolonged period 
necessary to train personnel, determine proper operating parameters 
and bring the plant into operation, distributions from the Project 
to 
the Trust in 1996 increased 27.5% (to $208,000) from the depressed 
l995 level of $163,000, but remained below the 1994 level of 
$623,000.

     In July 1995, Virginia Electric and Power Company ("VEPCO") the 
utility which purchases electricity from the South Boston Project 
under a long-term Power Contract, purported to cancel the Power 
Contract for alleged defaults by the project.  After negotiations 
with VEPCO proved unsuccessful, the Trust sued VEPCO in the 
federal district court for the Eastern District of Virginia to 
compel VEPCO to continue to honor the terms of the Power Contract. 
On September 15, 1995, the judge hearing the case entered an order 
in favor of the South Boston Project compelling VEPCO to continue 
honoring the Power Contract and VEPCO to date has paid in full all 
amounts currently due.  VEPCO appealed the decision to the United 
States Court of Appeals for the Fourth Circuit, which considered the 
appeal in August and September 1996 and which remanded the case in 
September 1996 to the district court for fact-finding on 
jurisdictional issues.  The parties began settlement discussions at 
the time of the remand.

     On January 17, 1997, VEPCO settled the pending lawsuit by 
paying $3,750,000 in cash to the partnership owning the South Boston 
Project and by waiving substantial capacity payments that might have 
been due to VEPCO in the event of an early termination of the Power 
Contract. The Project partnership surrendered the Power Contract to 
VEPCO and agreed to the entry of an order dismissing its lawsuit 
against VEPCO.  The settlement permits the partnership to continue 
operating the generating station and the associated waste oil 
treatment plant, but it may not sell electricity to VEPCO except at 
VEPCO's request, and the partnership may only sell electricity to 
investor-owned electric utilities for resale or use outside VEPCO's 
service area. In addition, the facility may be operated for non-
generating purposes such as waste oil treatment and electricity may 
be generated for the facility's needs. VEPCO may cut the 
interconnection of the facility with its lines and reconnection is 
permitted only for electricity sales in compliance with the 
settlement agreement.  The partnership may remove and sell 
equipment.

     These restrictions apply to any person that purchases or 
otherwise obtains the South Boston facility from the partnership or 
the Trust. Because under these restrictions it is currently 
uneconomic to operate the South Boston facility, the Trust has shut 
down the facility.

     The net proceeds from the settlement and the return of security 
for a letter of credit are approximately $2.8 million.  The Trust 
has entered into a letter of intent to purchase the general 
partner's and residual interests in the Olinda Project, described 
below, and has committed substantially all of the net proceeds from 
the settlement to that purchase.  The Trust is considering its 
alternatives for the South Boston generating and waste oil treatment 
plants which include, without limitation, sale or disposition of the 
plants, operating the waste oil facility, or keeping the plants in 
shutdown status until more favorable market conditions occur.  Sale 
or disposition of the plants is likely to have beneficial tax 
effects to Investors if the transactions can be properly structured. 
The Trust currently expects that it will decide the future of the 
South Boston Project before the end of 1997.

     (iii)  Olinda Project.  In October 1994, the Trust purchased 
for 
$3.1 million an equity interest in Brea Power Partners, L.P., a 
partnership which owns and operates a 5 megawatt landfill gas-fired 
electric generating plant known as Olinda and located in Brea, 
California (the "Olinda Project").  Under the structure of the 
investment, the Trust receives a priority cash distribution 
(generally, 98% of available cash flow) until such time as the Trust 
receives a return of its entire investment, together with a compound 
annual return of 15%.  In addition, the Trust retains a 5% interest 
in 
the Olinda Project's profits and capital after the priority 
distributions to the Trust have been made.

     The Olinda Project sells electricity under a long term Power 
Contract to Southern California Edison Co. which may be terminated 
by the purchaser no earlier than 2005 on five years' advance notice. 
 The landfill gas is produced from a landfill owned by the County of 
Orange, California, under a gas lease agreement with the operator of 
the Project, that expires no earlier than 2005, for resale by the 
operator to the Project at a formula price.

     Distributions from the Olinda Project to the Trust in 1996 
totalled $797,000, down 7.4% from the 1995 level of $860,000.  
Because the Trust's investment base in the Olinda Project decreases 
annually, its rights to a preferred distribution correspondingly 
decrease.  Because substantially all of the Trust's rights to 
distributions from its current interest in the Olinda Project will 
terminate in 2005, the Trust is treating distribnution amounts in 
excess of the 15% annual return target as returns of capital.  
Accordingly, $398,000 of the 1996 distributions and $441,000 of the 
1995 distributions were treated as returns of capital to the Trust.

    In November 1996 Air Products Corp. sold all of the interest in 
the Olinda Project that the Trust did not own (the general partner's 
and residual limited partner's interests) to an affiliate of 
Duquesne Light Co., which is the investor-owned electric utility 
serving Pittsburgh, Pennsylvania.  In March 1997 the Trust and 
Duquesne Light entered into a letter of intent for the Trust to 
purchase those interests for $3,000,000.  Duquesne Light continues 
to own the landfill gas collection and cleaning systems at the site 
and will continue to sell gas to the Project under the existing 
formula price, except that the base amount will be increased by 
$150,000, and the existing right of the Project to extend the gas 
supply agreement beyond its 2004 termination date will be cancelled. 
 The management agreement with an affiliate of Duquesne Light will 
be terminated. 

     Additional information regarding the Projects is found in the 
Notes to the [Consolidated] Financial Statements.

(iv)  Glendale Project.  On April 12, 1997, the Trust advised 
its Investors that it was negotiating the acquisition of a landfill
gas cleaning and compression station located at a landfill in Los 
Angeles County, California and the six-mile pipeline 
linking the station to the Glendale, California municipal electric 
generating plant.  The seller would retain title to the landfill gas 
gathering system and would continue to sell gas to the project, 
which, after processing and transportation, would resell the gas to 
the municipal utility under an existing sales contract with a 20 
year remaining term.  The estimated purchase price is $12 million.  
The tax credits granted for landfill gas production would remain 
with the seller.  The Trust believes that the purchase negotiations 
will be protracted, that there is no assurance the transaction will 
close and that it is possible that the terms of any purchase will be 
materially different from those described here.  

     (v) Terminated Activities.  The Trust also was a partner in 
two project development and acquisition partnerships that were 
unsuccessful in consummating any transactions.  The Trust terminated 
participation in both in late 1994 and wrote off a total of $815,000 
at that time.

     (3) Project Operation

     The success of a Project is dependent on the ability of the 
Project to perform efficiently under its Power Contract and is also 
dependent upon obtaining a necessary fuel supply at reasonable 
prices 
(or obtaining rights or licenses in the case of hydropower or 
geothermal resources). The Stillwater Project has the necessary 
permits to use hydroelectric resources and thus may use those 
resources to the extent available.  Use of those resources is 
limited seasonally by the New York State Department of Environmental 
Conservation to protect fish spawning populations and river quality 
and is subject to unpredictable local drought and flood conditions. 
 The Olinda Project has a long-term gas supply agreement providing 
for 100% of its requirements (subject to actual availability of 
landfill gas) at a fixed price escalated by 3.7% annually through 
the term.  The South Boston Project had a mixture of long-term and 
short-term fuel supply contracts and was subject to the availability 
and pricing of waste oil from time to time. The price of waste oil 
is affected by the pricing of oil and other hydrocarbons, which have 
fluctuated significantly in the last decade and which may continue 
to do so, although the fluctuations in waste oil prices tend to be 
less volatile than the variations in primary production.

     The major costs of a facility while in operation will be debt 
service (if applicable), fuel, taxes, maintenance and operating 
labor. 
The ability to reduce operating interruptions and to have a 
Project's capacity available at times of peak demand are critical to 
the profitability of a Project.  Accordingly, skilled management is 
a major factor in the Trust's business.  The Stillwater Project is 
managed by its remaining equity partners and the Olinda Project is 
managed under contract by the general partner of the limited 
partnership owning the Project.  The Trust monitors their 
performance using its own personnel and outside consultants.

     The South Boston Project was originally managed by Blackhawk 
Management Group, Incorporated, whose sole owner and employee had 
been the original developer of the South Boston Project.  The Trust 
dismissed the manager in June 1994.  See Item 3 - Legal Proceedings 
for information concerning litigation arising from the dismissal.  
Since that time, the Trust has owned (through a subsidiary) and 
managed the Project itself.  The costs of operating this Project 
have been wholly borne by the Trust as operating expenses and have 
not been borne by the Managing Shareholder.  Based on this 
experience and its experience managing other similar investment 
programs, the Managing Shareholder believes that contracting with 
third persons for the management of operating Projects in many cases 
is not in the best interests of the Trust because of the 
fragmentation of responsibility, the need for extensive oversight of 
the managers, the loss in some cases of economies of scale, the 
difficulty in some areas of obtaining qualified managers and the 
generally high costs of management contracts.  Further, the use of 
third persons to manage Projects deprives the Trust and other 
programs of management experience and hands-on knowledge that 
otherwise would be acquired by the Managing Shareholder or 
Affiliates.

     The Managing Shareholder accordingly has organized Ridgewood 
Power Management Corporation ("RPMC") to provide operating 
management for facilities operated by its investment programs, and 
has assigned day-to-day management of the South Boston Project to 
RPMC.

     Like the Managing Shareholder, RPMC is wholly owned by Robert 
E. Swanson.  It entered into an "Operation Agreement," effective 
January 1, 1996, under which RPMC has provided the management, 
purchasing, engineering, planning and administrative services for 
the Lynchburg Project that were previously furnished by employees of 
the Trust or by unaffiliated professionals and consultants and that 
were borne by the Trust as Project operating expenses, as well as 
billing, payment and other Project-level accounting and service 
costs.  These services are charged to the Trust at RPMC's cost.  
RPMC has shut down operations at the South Boston Project and is 
supervising it in its inactive state, pending a decision on its 
future status.  See Item 10 - Directors and Executive Officers of 
the Registrant and Item 13 - Certain Relationships and Related Party 
Transactions for further information regarding the Operation 
Agreement and RPMC and for the cost reimbursements received by RPMC. 

     Electricity produced by a Project is typically delivered to the 
electric utility purchaser through transmission lines and equipment 
that are built to interconnect with the utility's existing power 
grid.  

     The overall demand for electrical energy is somewhat seasonal, 
with demand usually peaking in the summertime as a result of the 
increased use of air conditioning.  In addition, for the Stillwater 
Project, there are seasonal fluctuations in the amount of power 
generated based on fluctuating water flows in the river.

     Generally, revenues from the sales of electric energy from a 
Project will represent the most significant portion of the 
facility's 
total revenue.  However, to maintain their status as Qualifying 
Facilities under PURPA, it is imperative that the South Boston and 
Olinda Projects continue to satisfy PURPA requirements as to fuel 
use. 
 To do so, the South Boston Project must burn at least a specified 
amount of waste oil or other waste products.  The availability of 
waste oil that meets the specifications needed for use in the South 
Boston Project fluctuates and its price varies accordingly.  
Therefore, it is possible that the South Boston Project could have 
difficulty obtaining sufficient waste oil fuel at an economic price. 
 
In such an event, it might be possible to convert the Project to a 
cogeneration facility if a user of the Project's heat could be 
obtained.

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

     Most Projects require a variety of permits, including zoning 
and 
environmental permits.  Such permits must usually be kept in force 
in 
order for a Project to continue its operations.  Compliance with 
environmental laws is a material factor in the independent power 
industry.  The Trust believes that capital expenditures for and 
other 
costs of environmental protection have not materially disadvantaged 
its activities relative to other competitors and will not do so in 
the 
future.  Although the capital costs and other expenses of 
environmental protection may constitute a significant portion of the 
costs of a Project, the Trust believes that those costs as imposed 
by 
current laws and regulations have been in part offset by lower 
acquisition prices for its investments and that it structured its 
investment program so as to minimize material adverse effects.  If 
future environmental standards require that a Project spend 
increased 
amounts for compliance, such increased expenditures could have an 
adverse effect on the Trust to the extent it is a holder of such 
Project's equity securities.  See Item 1(c)(6) -- Business-Narrative 
Description of Business -- Regulatory Matters.

     (4)  Trends in the Electric Utility and Independent Power 
Industries.

     As a consequence of federal and state moves to deregulate large 
areas of the electric power industry and the existence, spurred by 
PURPA, of  private competitors to electric utilities in the market 
for 
generating electricity, a number of interrelated trends are 
occurring. 
 In accordance with industry usage, sales of electricity by 
generators 
to utilities or other marketers of electricity are referred to as 
"wholesale" transactions and sales by generators, utilities or 
others 
to end users of electricity are referred to as "retail" 
transactions.

Continued Deregulation of the Generating Market.  

     The Comprehensive Energy Policy Act of 1992 (the "1992 Energy 
Act") encourages electric utilities to expand their wholesale 
generating capacity by removing some, but not all, of the 
limitations on their ownership of new generating facilities that 
qualify as "exempt wholesale generators" and on their ability to 
participate in Independent Power Projects.  See Item 1(c)(6)(ii) -- 
Energy Regulation -- the 1992 Energy Act.  Many state electric 
utility regulators are considering plans to further encourage 
investment in wholesale generators and to facilitate utility 
decisions to spin off or divest generating capacity from the 
transmission or distribution businesses of the utilities.  As a 
result, Independent Power Projects in the future will face 
competition not only from other Independent Power Projects seeking 
to sell electricity on a wholesale basis but also from exempt 
wholesale generators, electric utilities with excess capacity and 
independent generators spun off or otherwise separated from their 
parent utilities.  Large-scale Projects that can sell large amounts 
of electricity or that have excellent reliability records or 
favorable locations may have competitive advantages over small-scale 
Projects (such as the Trust's), Projects that cannot commit to 
deliver power on a firm commitment basis or Projects that are 
located in electricity surplus areas with insufficient transmission 
capacity.

Wholesale-level Access to Transmission Capacity.  

     Without access to transmission capacity, an Independent Power 
Project or other wholesale generator can only sell to the local 
electric utility or to a facility on which it is located  (or, in 
some states, which adjoins its location).  The most important 
changes occurring in the electric power industry are the efforts of 
FERC to compel utilities and power pools to provide nationwide 
access to transmission facilities to all wholesale power generators. 
 When combined with the increased competition in the generating 
area, this is likely to create an electricity supply market that may 
profoundly change the operations of electric utilities, consumers 
and Independent Power Projects.

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

     FERC initially dealt with wheeling requests on a case-by-case 
basis as constrained by provisions of the 1992 Energy Act that 
require all costs of the transmitting utility to be recovered in the 
transmission charge and that prohibit wholesale competitors from 
wheeling power to customers of an electric utility under generating 
contracts or tariffs.  On April 24, 1996 the Federal Energy 
Regulatory Commission adopted Order 888, which requires electric 
utilities and power pools to provide wholesale transmission 
facilities and information to all power producers on the same terms, 
and endorses the recovery by utilities of uneconomic capital costs 
from wholesale customers who change suppliers.  The utilities would 
also be required to furnish ancillary services, such as scheduling, 
load dispatch, and system protection, as needed.  These rights, 
however, would apply only to sales of new electric power over and 
above existing utility supply arrangements.  Initial trade estimates 
are that up to 6% of the entire U.S. market for wholesale power 
would be available to Independent Power Projects and other wholesale 
generators under the proposal.  

     Numerous regulatory issues must be addressed under this 
proposal of which one of the most contentious is the treatment of 
utility so-called "stranded costs."  Utilities that own generating 
plants with relatively high costs of production would be under 
severe competitive and regulatory pressure to purchase cheaper 
wholesale electricity, but in that event the utilities would not 
receive sufficient revenue to meet debt service requirements or 
other capital costs (the stranded costs) relating to the high-cost 
plants.  This might significantly impair utility cash flows and some 
utilities might be at risk of insolvency in that event.  The FERC 
order would require some mitigation efforts on the utility's part, 
but primarily would require wholesale customers who acquire 
electricity from a new supplier to compensate their former utility 
supplier for revenue lost. This might require a customer who changes 
suppliers to pay a substantial additional fee to the prior utility 
supplier, thus inhibiting changes of supplier.   

     The order takes no action to modify existing power purchase 
contracts.  The order intends to create a competitive national 
market in electricity generation and thus may create additional 
pressure on electric utilities to seek changes to long-term power 
purchase contracts, as described further below.  The Trust has 
developed its business plan in anticipation of the order and will 
pursue its investment program to take advantage of opportunities as 
they arise in the changing industry.  The Trust is unable to predict 
the consequences of the order on its eventual operations or on the 
independent power industry.

     State public utility regulatory agencies must also review and 
approve certain aspects of wholesale power deregulation, and those 
agencies are currently holding proceedings and making 
determinations.  

     In addition to the FERC order or other Congressional or 
regulatory actions that may result in freer access to transmission 
capacity, agreements with Canada, and to a lesser extent with 
Mexico, are leading toward access for those countries' generators to 
U.S. markets.  In particular, certain Canadian suppliers, such as 
HydroQuebec (the Quebec provincial utility) are already offering 
substantial amounts of electricity in the U.S., and more may be 
offered if sufficient transmission capacity can be approved and 
built.  These agreements may also afford access to those countries' 
markets in the future for Independent Power Projects.  As a result, 
there is the possibility that a North American wholesale market will 
develop for electricity, with additional competitive pressures on 
U.S. generators.
 
Conservation Initiatives. 

     In recent years many state regulators, at the urging of 
citizen's groups and as contemplated by the 1992 Energy Act, have 
required electric utilities to engage in least cost utility 
planning, demand side management and other conservation programs.  
These programs have the common effect of encouraging utilities to 
look to conservation of electricity and the more efficient use of 
existing capacity as means of meeting new demand, as well as to 
purchases from Independent Power Projects or wholesale generators 
and to building more generation capacity.  There are also reports 
that utilities are reducing their reserve capacity levels to 
minimums and are more aggressively controlling dispatch of power as 
a means of minimizing new power purchases.  

Proposals to Modify PURPA and Existing Power Contracts.

     The independent power industry remains a creature of PURPA in 
most respects.  The prospects of increased competition to supply 
electricity, availability of wheeling of wholesale power, supply 
alternatives through the conservation initiative described above and 
reduced rates of increase in electricity demand have caused many 
electric utilities to advocate repeal or modification of PURPA and 
changes to existing long-term Power Contracts with Independent Power 
Projects.  These utilities have alleged that PURPA requires them to 
purchase electricity at higher prices than they could acquire new 
capacity themselves and that existing Power Contracts, signed when 
utilities anticipated much higher fuel and capital costs and higher 
demand, provide for prices substantially above current wholesale 
prices.  The independent power industry has pointed out that PURPA 
does not require utilities to purchase new supplies from Independent 
Power Projects at rates above alternative sources' prices (although 
a few state regulators have imposed such requirements from time to 
time) and that existing long-term Power Contracts were generally 
entered into on the basis of good faith estimates by the utilities 
of future conditions with the expectation that sponsors would rely 
upon them.  As mentioned above, Niagara Mohawk Power Company, the 
utility to which the Stillwater Project sells its output, has 
attempted unsuccessfully to do so.  In March 1997, as discussed 
above, Niagara Mohawk proposed a $4 billion buyout of many of its 
long-term Power Contracts rather than continue to try to invalidate 
them.

     To date, FERC has rejected proposals to modify existing Power 
Contracts (except for contracts entered into under state regulations 
mandating payment of prices greater than utility avoided costs at 
the time the contracts were executed), and FERC's rulemaking 
proposals are expressly based on the principle that existing Power 
Contracts that comply with current law should not be modified by 
FERC.  Although proposals have been introduced in Congress to amend 
or repeal PURPA, no such proposal has yet been reported to the 
floor.  However, there can be no assurance that FERC or the Congress 
will not take action to reduce or eliminate the benefits or PURPA 
for Independent Power Projects or that they would not take action 
purporting to change or cancel existing Power Contracts or that they 
would not take action making compliance with those contracts 
economically or practically infeasible.  If any such action were to 
be taken, the value of existing Independent Power Projects might be 
significantly impaired or even eliminated.  If such action were to 
be proposed with any significant prospect of adoption, the 
consequent uncertainty might have similar effects.  

     In a related phenomenon, some electric utilities that are 
parties to long-term Power Contracts with rates substantially above 
current replacement costs have entered into buy-out arrangements 
with the owners of those Independent Power Projects.  Under these 
agreements, the Power Contracts are terminated in exchange for a 
payment by the utility to the Project.  Typically, these 
arrangements have been limited to Independent Power Projects with 
high costs of production or other factors that have impaired their 
profitability, even with a firm Power Contract.  The settlement with 
VEPCO for the South Boston Project was accepted to end a 
debilitating litigation.  The Trust does not anticipate that it will 
solicit or receive a buy-out arrangement for its remaining two 
Projects, but it will consider potential arrangements if conditions 
warrant. 

Retail-level Competition

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

     Many states are experimenting with retail wheeling, and many 
larger states, including New York,  among others, are implementing 
large scale movements toward various forms of retail deregulation.  
It appears that most states will do so by the year 2000.  These 
proposals are currently the subject of intensive debate and 
restructuring, and any such proposal is likely to undergo judicial 
review.  Regulators and industry participants currently have extreme 
uncertainty as to whether and how far retail-level competition will 
be authorized, the treatment of stranded costs, the extent to which 
FERC's actions in the wholesale market will practically compel 
retail-level competition and the effects of any change.  As of the 
date of this Annual Report, however, no state authority has proposed 
or implemented any plan that would abrogate or impair existing long-
term Power Contracts with Independent Power Projects.  Instead, to 
the extent that long-term Power Contracts have rates above current 
avoided costs, the excess is being treated by most states as a form 
of stranded cost.  Many states are providing that all or most of the 
stranded costs will be borne by ratepayers rather than Independent 
Power Projects or utilities.  Typically, the state will require 
customers who change electricity suppliers to make payments to a 
fund used to reimburse utilities in part for the burden of stranded 
costs.  Although this may lessen pressures on utilities to contest 
long-term Power Contracts, it may deter retail customers from 
switching to independent power suppliers.

Initial Effects of Trends

     Although, as mentioned above, it is impractical to predict all 
the consequences of the rapidly evolving trends in the electric 
power industry, certain patterns are beginning to emerge.  First, as 
noted before, investment in new Independent Power Projects and in 
new utility generating capacity in the United States has 
substantially decelerated since 1993, as the larger participants in 
the development process (including developers, utilities, lenders 
and equipment suppliers) reassess their positions.  Indeed, many of 
the largest participants have announced their intentions to 
concentrate their resources in developing countries in Europe and 
Asia. Similarly, lenders are more reluctant currently to extend 
large amounts of non-recourse financing for development of Projects 
and are insisting on larger equity investments by owners of 
Projects. 

     In response to the current perceived slowing of electricity 
demand growth, the prospect of wholesale competition and the 
relatively higher prices currently payable under some long-term 
Power Contracts, many electric utilities have refrained from 
entering into new, long-term Power Contracts with Independent Power 
Projects and have instead proposed to purchase electricity from 
Qualifying Facilities or other generators under short-term 
contracts.  Competitive bidding by utilities, governmental units and 
in states where permitted, large industrial and commercial users for 
electricity supplies is becoming common.  In 1995 and 1996, these 
competitive solicitations typically attracted large numbers of bids 
at prices substantially below prior utility prices.  Although these 
solicitations cover a minuscule part of the wholesale market, they 
indicate that there is currently intense competition to sell new 
capacity from Independent Power Projects. Certain state regulators, 
in response to these conditions, have proposed or approved auctions 
to generating businesses of the rights to supply utilities.  The 
Trust is currently relying on its existing long-term Power Contracts 
so as to minimize exposure to volatile short-term markets.  There is 
no assurance that it will be able to extend those Power Contracts or 
acquire other customers on favorable terms.

     As a consequence of these trends and industry participants' 
reactions to them, many observers, including utilities, believe that 
there are temporary, regional surpluses of electric generating 
capacity.  For example, in the spring of 1995, the California public 
utilities commission projected that the state's three largest 
utilities would not need additional generating capacity until 2004, 
and that there was a current small surplus of capacity.  It should 
be noted, however, that the projections also foresaw a rapid 
increase of demand for capacity in the ten years following 2004.  
Similarly, on a nationwide level a 1997 estimate forecasted that 
71,000 Megawatts of capacity is currently provided by fossil-fuel 
power plants that are over 30 years old and are approaching the ends 
of their expected useful lives, that most nuclear power plants are 
facing relicensing proceedings that normally require extensive 
reconstruction, and that up to 10% of all U.S. generating capacity 
may be up for replacement in the next 15 years.  Accordingly, one of 
the most important and difficult questions for determination is 
whether the current reluctance to finance and build additional 
generating capacity will lead to capacity shortages on a regional or 
national basis in the next ten years.  Further, as the supply market 
becomes more fragmented and short-term, regulators and customers are 
beginning to raise concerns as to the dependability of supply.

     Another consequence of the current industry reluctance to 
commit to long-term increases in capacity and the perceived 
existence of regional surplus capacity is a short-term orientation 
on the part of many industry participants.  Recently, many 
companies, including affiliates of fuel suppliers and utilities, 
have applied to FERC to act as electric power marketers, because 
they anticipate that if wholesale wheeling becomes significant there 
will be strong demand for brokers or market makers in electric 
power.  It is uncertain whether power marketers will become 
significant factors in the electric power market.  A related 
development is the creation of derivative contracts for hedging of 
and speculation in electricity supplies.  A few developers and 
utilities are also considering the construction of  "merchant power 
plants," which would be built without firm Power Contracts in hopes 
of marketing their output on the anticipated short-term, competitive 
wholesale or retail markets.  

     With these conditions in mind, many observers see two primary 
strategies for Independent Power Projects to succeed in the United 
States:  first, Projects that have existing, firm, long-term Power 
Contracts may do well so long as regulatory or legislative actions 
do not abrogate the contracts.    Second, Projects that are low-cost 
producers of electricity, either from efficiencies or good 
management or as the result of successful cogeneration technologies, 
will have advantages in the competitive market.  The Trust intends 
to focus on both possibilities and to maintain a focus on medium-to-
long-term results.  

     Finally, there have been industry-wide moves toward 
consolidation of participants and divestiture of Projects.  A number 
of utilities and equipment suppliers have proposed or entered into 
joint ventures to reduce risks and mobilize additional capital for 
the more competitive environment, while many electric utilities are 
in the process of combining, either as a means of reducing costs and 
capturing efficiencies, or as a means of increasing size as an 
organizational survival tactic.  A number of large natural gas 
utilities have also acquired or are considering acquiring electric 
utilities.  Industry observers have attributed this to the more 
entrepreneurial character of the gas industry, which has already 
been deregulated, and to the fact that natural gas is currently a 
preferred fuel for generating plants, which may encourage the 
combination of the fuel suppliers with fuel users to assure supply 
and reduce uncertainties.  These consolidations and acquisitions 
tend to create additional competitive pressures in the electric 
power industry; however, this trend is also encouraging the 
divestiture of smaller Projects or Projects that are deemed less 
central to the operations of large, consolidated businesses. 


     (5)  Competition

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

     The Trust is unable to accurately estimate the number of 
competitors but believes that there are many competitors at all 
levels 
and in all sectors of the industry.  Many of those competitors, 
especially affiliates of utilities and equipment manufacturers, may 
be 
far better capitalized than the Trust.

     Competition in the energy market is generally not a factor in 
the 
current operations of the Trust since the Projects which it is 
currently operating have entered into long-term agreements to sell 
their output at specified prices.  However, a particular Project 
could 
be subject to future competition to market its electricity output if 
its Power Contract expires or is terminated because of a default or 
failure to pay by the purchasing utility or other purchaser due to 
bankruptcy or insolvency of the purchaser or because of the failure 
of 
a Project to comply with the terms of the Power Contract; regulatory 
changes, or other reasons.  It is impossible at this time to 
estimate 
the level of marketing competition that the Trust would face in any 
such event.

     6.  Regulatory Matters.

     Projects are subject to energy and environmental laws and 
regulations at the federal, state and local levels in connection 
with 
development, ownership, operation, geographical location, zoning and 
land use of a Project and emissions and other substances produced by 
a 
Project.  These energy and environmental laws and regulations 
generally require that a wide variety of permits and other approvals 
be obtained before the commencement of construction or operation of 
an 
energy-producing facility and that the facility then operate in 
compliance with such permits and approvals.  Since the Trust 
operates 
as a "business development company" under the 1940 Act, it is also 
subject to provisions of that act pertaining to such companies.

     (i)  Energy Regulation.

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

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

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

     (B)  The 1992 Energy Act.  The Comprehensive Energy Policy Act 
of 
1992 (the "1992 Energy Act") empowered FERC to require electric 
utilities to make available their transmission facilities to and 
wheel 
power for Independent Power Projects under certain conditions and 
created an 

exemption for electric utilities, electric utility holding companies 
and other independent power producers from certain restrictions 
imposed by the Holding Company Act.  Although the Trust believes 
that 
the exemptive provisions of the 1992 Energy Act will not materially 
and adversely affect its business plan, the act may result in 
increased competition in the sale of electricity by Independent 
Power 
Projects.

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

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

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

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


     (ii)  Environmental Regulation.

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

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

     The market price of an allowance cannot be predicted with 
certainty at this time and there is no assurance that a broad market 
for those allowances will develop or continue, although efforts have 
been made by certain commodities exchanges to create a market. 
Projects fueled by natural gas are not expected to be materially 
burdened by the acid rain provisions of the Clean Air Act 
Amendments.

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

     Based on current trends, the Managing Shareholder expects that 
environmental and land use regulation will become more stringent.  
The 
Trust and the Managing Shareholder have not developed expertise and 
experience in obtaining necessary licenses, permits and approvals, 
which will be the responsibility of each Project's managers and 
Project Sponsors.  The Trust will rely upon qualified environmental 
consultants and environmental counsel retained by it or by Project 
Sponsors to assist in evaluating the status of Projects regarding 
such 
matters.

     (iii)  The 1940 Act.

     Since its Shares are registered under the 1934 Act, the Trust 
is 
required to file with the Commission certain periodic reports (such 
as 
Forms 10-K (annual report), 10-Q (quarterly report) and 8-K (current 
reports of significant events) and to be subject to the proxy rules 
and other regulatory requirements of that act that are applicable to 
the Trust.  The Trust has no intention to and will not permit the 
creation of any form of a trading market in the Shares in connection 
with this registration.

 On May 26, 1994, the Trust notified the Securities and Exchange 
Commission (the "Commission") of its election to be a "business 
development company" and registered its Shares under the 1934 Act.  
On 
June 25, 1994, the election and registration became effective.  As a 
"business development company," the Trust is a closed-end 
company (defined by the 1940 Act as a company that does not offer 
for 
sale or have outstanding any redeemable security) that is regulated 
under the 1940 Act only as a business development company.  The act 
contains prohibitions and restrictions on transactions between 
business development companies and their affiliates as defined in 
that 
act, and requires that a majority of the board of the company be 
persons other than "interested persons" as defined in the act.  The 
board of the Trust is comprised of Ridgewood Power and two 
individuals, John C. Belknap and Dr. Richard D. Propper, who also 
serve as independent trustees of Ridgewood Electric Power Trust IV, 
a 
business development company sponsored by the Managing Shareholder, 
but who are not otherwise affiliated with the Trust, Ridgewood Power 
or any of their affiliates.  See Item 10 -- Directors and Executive 
Officers below.  

     Under the 1940 Act, Commission approval is required for certain 
transactions involving certain closely affiliated persons of 
business 
development companies, including many transactions with the Managing 
Shareholder and the other investment programs sponsored by the 
Managing Shareholder.  There can be no assurance that such approval, 
if required, would be obtained.  In addition, a business development 
company may not change the nature of its business so as to cease to 
be, or to withdraw its election as, a business development company 
unless authorized to do so by at least a majority vote of its 
outstanding voting securities.

     The 1940 Act restricts the kind of investments a business 
development company may make.  A business development company may 
not 
acquire any asset other than a "Qualifying Asset" unless, at the 
time 
the acquisition is made, Qualifying Assets comprise at least 70% of 
the company's total assets by value.  The principal categories of 
Qualifying Assets that are relevant to the Trust's activities are:

     (A)  Securities issued by "eligible portfolio companies" that 
are 
purchased by the Trust from the issuer in a transaction not 
involving 
any public offering (i.e., private placements of securities).  An 
"eligible portfolio company" (1) must be organized under the laws of 
the United States or a state and have its principal place of 
business 
in the United States; (2) may not be an investment company other 
than 
a small business investment company licensed by the Small Business 
Administration and wholly-owned by the Trust and (3) may not have 
issued any class of securities that may be used to obtain margin 
credit from a broker or dealer in securities.  The last requirement 
essentially excludes all issuers that have securities listed on an 
exchange or quoted on the National Association of Securities 
Dealers, 
Inc.'s national market system, along with other companies designated 
by the Federal Reserve Board.  Except for temporary investments of 
the 
Trust's available funds, substantially all of the Trust's 
investments 
are expected to be Qualifying Assets under this provision.  See Item 
1(b) -- Business -- The Trust's Investments.

     (B)  Securities received in exchange for or distributed on or 
with respect to securities described in paragraph (A) above, or on 
the 
exercise of options, warrants or rights relating to those 
securities.

     (C)  Cash, cash items, U.S. Government securities or high 
quality 
debt securities maturing not more than one year after the date of 
investment.

     A business development company must make available "significant 
managerial assistance" to the issuers of Qualifying Assets described 
in paragraphs (A) and (B) above, which may include without 
limitation 
arrangements by which the business development company (through its 
directors, officers or employees) offers to provide (and, if 
accepted, 
provides) significant guidance and counsel concerning the issuer's 
management, operation or business objectives and policies.

     A business development company also must be organized under the 
laws of the United States or a state, have its principal place of 
business in the United States and have as its purpose the making of 
investments in Qualifying Assets described in paragraph (A) above.

     The Managing Shareholder believes that it may no longer be 
necessary for the Trust to continue its status as a business 
development company, because of the Managing Shareholder's active 
involvement in operating Projects through the Trust and other 
investment programs. Although the Managing Shareholder believes it 
would be beneficial to the Trust to end the election and reduce 
costs of legal compliance that do not contribute to income, the 
process of withdrawing the business development company election 
requires a proxy solicitation and a special vote of investors, which 
is also costly.  Accordingly, the Managing Shareholder does not 
intend at this time to request the Investors' consent to withdrawing 
the business development company election.  Any change in the 
Trust's status will be effected only with the Investors' consent.

     As required by the business development company election, the 
Trust`s Shares are currently registered under the 1934 Act, which 
requires the Trust to make periodic reports to the Securities and 
Exchange Commission, to comply with proxy solicitation and insider 
trading restrictions and to take other actions required of most 
publicly traded companies. The Trust currently has 218 Investors of 
record, which is less than the minimum number (300) that would 
require the Trust to maintain registration.  The Trust has taken no 
action as of the date of this Annual Report to consider whether 
deregistration would be appropriate.

     (iv)  Potential Legislation and Regulation.

     All federal, state and local laws and regulations, including 
but 
not limited to PURPA, the Holding Company Act, the 1992 Energy Act 
and 
the FPA, are subject to amendment or repeal.  Future legislation and 
regulation is uncertain, and could have material effects on the 
Trust.

(d)     Financial Information about Foreign and Domestic Operations 
and Export Sales. 

     The Trust has invested in Projects located in California and 
Virginia and has no foreign operations.

(e)     Employees.

     The employees of the South Boston Project have been transferred 
to RPMC and accordingly the Trust has no employees.  The persons 
described below at Item 10 -- Directors and Executive Officers of 
the 
Registrant serve as executive officers of the Trust and have the 
duties and powers usually applicable to similar officers of a 
Delaware 
corporation in carrying out the Trust business.

Item 2.  Properties.

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

     The following table shows the material properties (relating to 
Projects) owned or leased by the Trust's subsidiaries or 
partnerships 
in which the Trust has an interest.  All of the Projects are 
described 
in further detail at Item 1(c)(2).

                                                      Approximate
                                                      Square
                    Ownership  Ground   Approximate  Footage of    Description
                    Interests  Lease      Acreage    Project (Actual    of
Project   Location   in Land  Expiration   of Land   or Projected)     Project

South     South     Owned       --           3        5,400         Waste oil-
Boston    Boston,                                                       to
         Virginia                                                  electricity

Olinda   Olinda,    Leased     2004          2        6,000          	Landfill
        California                                                  gas-fired 
                                                                        power 
                                                                      facility

Still- Stillwater,  Leased     2029          .75        N/A             Hydro-
water   New York    and                                               electric
                    Licensed                                             plant


Item 3.  Legal Proceedings.

     The litigation between the Trust's subsidiary and VEPCO with 
respect to the South Boston Project's long-term Power Contract, and 
the January 1997 settlement of that litigation, are described at 
Item 1(c)(2)(ii) -Business - The Trust's Investments - South Boston 
Project. 

     In December 1993, a subsidiary of the Trust engaged Blackhawk 
Management Group, Incorporated, a North Carolina corporation whose 
sole owner and employee was the original developer of the South 
Boston Project, to manage that Project under contract.  On June 9, 
1994, the subsidiary terminated the management contract for material 
breach and inequitable conduct by Blackhawk, which then sued in the 
Circuit Court of Halifax County, Virginia one year later on June 8, 
1995.  The action claimed breach of contract by the Trust's 
subsidiary and claimed compensatory damages of $3 million and 
punitive damages of $1 million.  The subsidiary has removed the 
action to the United States District Court for the Western District 
of Virginia, Danville Division.  The Trust believes that the lawsuit 
is without merit, that the Trust's subsidiary has meritorious 
defenses to all claims, and that the claims for damages were clearly 
inflated.  The action is in discovery and is pending trial.  The 
Trust does not anticipate any material recovery by the plaintiff.  

     From time to time, the Trust and its subsidiaries are engaged 
in ordinary legal proceedings incident to the normal course of their 
businesses which primarily involve claims for damages, or other 
immaterial actions.

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

     The Trust did not submit any matters to a vote of the Investors 
during the fourth quarter of 1996.

PART II

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

(a)  Market Information.  

     The Trust has 105.5 Investor Shares of beneficial interest in 
the 
Trust resulting from the merger with the Partnership which was 
effective on June 15, 1994.  There is currently no established 
public 
trading market for the Investor Shares and the Trust does not intend 
to allow a public trading market to develop.  As of the date of this 
Form 10-K, all such Investor Shares have been issued and are 
outstanding.  There are no outstanding options or warrants to 
purchase 
or securities convertible into Investor Shares and the Trust has no 
intention to make any public offering of Investor Shares.

     Investor Shares are restricted as to transferability under the 
Declaration.  In addition, under federal laws regulating securities 
the Investor Shares have restrictions on transferability when they 
are 
held by persons in a control relationship with the Trust.  Investors 
wishing to transfer Shares should also consider the applicability of 
state securities laws.  The Investor Shares have not been and are 
not 
expected to be registered under the Securities Act of 1933, as 
amended 
(the "1933 Act"), or under any other similar law of any state 
(except 
for certain registrations that do not permit free resale) in 
reliance 
upon what the Trust believes to be exemptions from the registration 
requirements contained therein.  Because the Investor Shares have 
not 
been registered, they are "restricted securities" as defined in Rule 
144 under the 1933 Act.

(b)  Holders.

     As of the date of this Form 10-K, there are 218 record holders 
of 
Investor Shares.

(c)  Dividends.

     The Trust made distributions as follows for the years 1994 
through 1996:

                          Year ended     Year ended      Year ended
                         December 31,   December 31,    December 31,
                             1996          1995             1994
Total distributions
 to Investors              $800,512       $846,636         $736,289
Distributions per
 Investor Share               7,588          8,025            6,979
Total distributions
 to Managing Shareholder      8,086          8,151            7,443

     While the Trust expects to make monthly distributions, the 
Trust's ability to make future distributions to the Investors and 
their timing will depend on the net cash flow of the Trust and 
retention of reasonable reserves as determined by the Trust to cover 
its anticipated expenses.

     Subject to the other factors described in this Annual Report on 
Form 10-K, the Trust's goal is to provide Investors with annual 
distributions of net cash flow, as defined in the Declaration of 
Trust, of 15% of their Capital Contributions to the Trust.  Because 
the Trust's objective is to distribute net cash flow, a substantial 
portion of many distributions will include cash flow that represents 
depreciation and amortization charges against assets at the Project 
level.  Nevertheless, because the Projects are not consolidated with 
the Trust for accounting purposes, all funds received from Projects 
are considered to be revenue to the Trust for accounting purposes.  
Distributions may also include cash released from operating or debt 
service reserves, Trust-level depreciation or amortization, or in 
the case of the Olinda Project, amounts treated as a return of 
capital.  For purposes of generally accepted accounting principles, 
amounts of distributions in excess of accounting income may be 
considered to be capital in nature.  Investors should be aware that 
the Trust is organized to return net cash flow rather than 
accounting income to Investors.



Item 6.  Selected Financial Data.

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


Selected             As of and       As of and        As of and      As of and
Financial         for the year    for the year     for the year   for the year
 Data                    ended           ended            ended          ended
                  December 31,    December 31,     December 31,   December 31,
                          1996            1995             1994           1993
Total Fund
 Information:

Net operating
 revenues             $609,537        $552,769       $1,014,963       $100,227
Net income (loss)      496,802       $ 418,417         ($46,821)     ($367,179)
Net assets
 (shareholders'
 equity)             6,604,641      $6,916,437       $7,352,807     $8,143,360
Investments in
 power generation
 limited
 partnerships
 and loan to
 project             7,177,875      $7,207,846       $7,159,755     $4,643,752
Total assets        $7,505,197      $7,531,306       $7,469,945     $8,184,663
Per Investor Share
  Revenues              $5,778          $5,240           $9,621           $941
  Expenses               1,069          $1,273         $(10,064)       $(4,386)
  Net income (loss)      4,709          $3,966            $(443)       $(3,446)
  Net asset value      $62,832         $65,559          $69,695        $77,188


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

     The following discussion and analysis should be read in 
conjunction with the Trust's financial statements and the notes 
thereto presented elsewhere herein. The Trust's financial statements 
are prepared under generally accepted accounting principles 
applicable to business development companies.  Accordingly, Project 
revenues and expenses are not consolidated with those of the Trust 
and do not appear in the Trust's financial statements.  Dollar 
amounts in this discussion are generally rounded to the nearest 
$1,000.

     Income of the Trust from Projects was as follows:

Project                1996           1995           1994
Olinda*             399,000       $419,000       $118,000
South Boston        208,000        163,000        623,000
Stillwater                0              0        127,000

* An additional $398,000 of distributions in 1996 and $441,000 in 1995 from the 
Olinda Project were treated for accounting purposes as a return of capital.

Results of Operations

     12 months ended December 31, 1996 versus 12 months ended 
December 
31, 1995.

     Net income for calendar 1996 was $497,000, a $79,000 (18.7%) 
increase from the 1995 level.  The improvement was caused primarily 
by 
a $45,000 increase in distributions from the South Boston Project 
and 
the waiver by the Managing Shareholder of a portion of its 
management 
fees in 1996.

     Total revenue for 1996 increased by $57,000 (10.3%), reflecting 
increases in distributions from the South Boston Project as demands 
on 
cash flow for the construction and start-up of the waste oil plant 
ended.  Revenue from the Olinda Project decreased by $20,000, 
reflecting the decline in the investment base used to calculate the 
Trust's preferred return from the Olinda Project.  

     Expenses for 1996 were $21,000 (16.1%) less than in 1995 
($113,000 vs. $134,000), primarily as the result of a decision by 
the 
Managing Shareholder in April 1996 to waive a portion of its annual 
management fee of 1% of net assets, which reduced that fee by 
$37,000 
from 1995 to 1996.  During 1996 the Managing Shareholder funded the 
legal costs of the VEPCO litigation involving the South Boston 
Project, which are not included in the Trust's expenses for 1996.

     It is impossible to predict future revenues from the Stillwater 
Project; however, it is unlikely that distributions to the Trust 
will resume from that Project in 1997.

     12 months ended December 31, 1995 versus 12 months ended 
December 31, 1994.

     Net income for calendar 1995 was $418,000, as compared to a net 
loss of $47,000 for 1994.  The improvement primarily reflected the 
absence in 1995 of the $815,000 of writedowns taken in 1994 on 
terminated investments in project development organizations and 
lower accounting and legal fees as discussed below. 

     Total revenue decreased by 45.1% from 1994 to 1995, as the 
result of the suspension of payments from the Stillwater Project and 
the revenue losses from the outages at the South Boston Project, 
both of which are discussed at Item 1(c)(2) - The Trust's 
Investments.  The loss of $127,000 in distributions from the 
Stillwater Project and the decline in South Boston Project 
distributions from $623,000 in 1994 to $163,000 in 1995 was 
partially offset by receipt of a full year's distributions from the 
Olinda Project, ($859,000 in 1995 versus $118,000 for less than 
three months of 1994).  Because the Trust completed its investment 
program in 1994, there was no interest or dividend income in 1995 
from funds awaiting investment.

     As noted, expenses other than writedowns also decreased by 
45.6%, primarily because of a 74.9% decrease in legal and accounting 
expenses.  The decrease reflects the conclusion of the Trust's 
investing activities and lesser legal expenses for securities law 
compliance after the conclusion of the conversion of the prior 
Partnership to the Trust in 1994.  

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

     Liquidity and Capital Resources.

     The settlement of the VEPCO litigation affecting the South 
Boston Project and return of a deposit resulted in proceeds of 
approximately $3,850,000 to the Trust.  After repayment of advances 
from the Managing Shareholder and payment of other costs, 
approximately $2,800,000 of net proceeds are available to the 
Trust.  As discussed above in connection with the the South Boston 
and Olinda Projects, all of this amount has been committed toward 
the $3 million purchase price of the remainder of the Olinda 
Project.  The Trust expects that the balance of the purchase price 
and the acquisition-related costs will be funded from a term loan 
from a bank, which is being negotiated.

     Capital improvements or repairs to the Stillwater Project are 
to be funded by its equity partners, excluding the Trust, from 
proceeds of insurance or possibly from revenues.  The Trust has been 
advised by the equity partners that they believe that adequate funds 
will be available for the necessary repairs, but the Trust might 
consider providing capital funds to the Project if in so doing it 
could obtain rights that would give it an acceptable return on its 
entire investment.  The Trust does not anticipate any material needs 
for capital with respect to its limited partnership interest in the 
Olinda Project in 1997.  

     The Trust anticipates that its cash flow during 1997 will be 
adequate to fund its obligations.  In the event that there is an 
unanticipated need for working capital or for repairs or replacement 
of equipment, the Managing Shareholder has also obtained a credit 
line of $500,000 from a bank, which it intends to make available for 
those purposes to the Trust or other programs the Managing 
Shareholder is sponsoring.  The Managing Shareholder will not impose 
charges for use of that line in excess of those charged to it by the 
bank.


Item 8.  Financial Statements and Supplementary Data.

Index to Financial Statements

     Report of Independent Accountants                          F-2
     Statement of Operations for the three years ended
      December 31, 1996                                         F-3
     Balance Sheet at December 31, 1996 and 1995                F-4
     Statement of Changes in Shareholders' Equity
      for the three years ended December 31, 1996               F-5
     Statement of Cash Flows for the three years
      ended December 31, 1996                                   F-6
     Notes to Financial Statements                      F-7 to F-11

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

     The financial statements are presented in accordance with 
generally accepted accounting principles and Securities and Exchange 
Commission positions applicable to business investment companies, 
which require the Trust's investments in Projects to be presented on 
the cash method, rather than on the equity method.  


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

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


PART III

Item 10.  Directors and Executive Officers of the Registrant.

(a)  General.

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

     Ridgewood Energy Holding Corporation ("Ridgewood Holding"), a 
Delaware corporation incorporated in April 1992, is the Corporate 
Trustee of the Trust.

(b)  Managing Shareholder.

     The Managing Shareholder was incorporated in February 1991 as a 
Delaware corporation for the primary purpose of acting as a managing 
shareholder of business trusts and as a managing general partner of 
limited partnerships which are organized to participate in the 
development, construction and ownership of Independent Power 
Projects.

     The Managing Shareholder has also organized Ridgewood Electric 
Power Trust II ("Ridgewood Power II"), Ridgewood Electric Power 
Trust 
III ("Ridgewood Power III"), Ridgewood Electric Power Trust IV 
("Ridgewood Power IV") and Ridgewood Electric Power Trust V 
("Ridgewood Power V") as Delaware business trusts to participate in 
the independent power industry, and is in the process of organizing 
an 
additional similar business trust.  The business objectives of the 
four other trusts are similar to those of the Trust.

     The Managing Shareholder is an affiliate of Ridgewood Energy 
Corporation ("Ridgewood Energy") which has organized and operated 46 
limited partnership funds and one business trust over the last 13 
years (of which 25 have terminated) and which had total capital 
contributions in excess of $190 million.  The programs operated by 
Ridgewood Energy have invested in oil and natural gas drilling and 
completion and other related activities.

     Robert E. Swanson has been the President, sole director and 
sole 
stockholder of the Managing Shareholder since its inception in 
February 1991.  Set forth below is certain information concerning 
Mr. 
Swanson and the other executive officers of the Managing 
Shareholder.

     Robert E. Swanson, age 50, has also served as President of the 
Trust since its inception in June 1992 and as President of RPMC, 
Ridgewood Power II, Ridgewood Power III, Ridgewood Power IV and 
Ridgewood Power V since their inceptions.  Mr. Swanson has been 
President, registered principal, sole director and sole stockholder 
of 
Ridgewood Securities Corporation, the Placement Agent for the 
private 
placement offerings of the Trust and the other four trusts, since 
its 
inception in September 1983.  In addition, he has been President, 
sole 
director and sole stockholder of Ridgewood Energy since its 
inception 
in October 1982.  Prior to forming Ridgewood Energy in 1982, Mr. 
Swanson was a tax partner at the former New York and Los Angeles law 
firm of Fulop & Hardee and an officer in the Trust and Investment 
Division of Morgan Guaranty Trust Company.  His specialty is in 
personal tax and financial planning, including income, estate and 
gift 
tax.  Mr. Swanson is a member of the New York State and New Jersey 
bars, the Association of the Bar of the City of New York and the New 
York State Bar Association.  He is a graduate of Amherst College and 
Fordham University Law School.  

     Robert L. Gold, age 38, has also served as Executive Vice 
President of the Managing Shareholder, the Trust, RPMC, Ridgewood 
Power II, Ridgewood Power III, Ridgewood Power IV and Ridgewood 
Power 
V since their respective inceptions, with primary responsibility for 
marketing and acquisitions.  He has served as Vice President and 
General Counsel of Ridgewood Securities Corporation since he joined 
the firm in December 1987.  Mr. Gold has also served as Executive 
Vice 
President of Ridgewood Energy since October 1990.  He served as Vice 
President of Ridgewood Energy from December 1987 through September 
1990. For the two years prior to joining Ridgewood Energy and 
Ridgewood Securities Corporation, Mr. Gold was a corporate attorney 
in 
the law firm of Cleary, Gottlieb, Steen & Hamilton in New York City 
where his experience included mortgage finance, mergers and 
acquisitions, public offerings, tender offers, and other business 
legal matters. Mr. Gold is a member of the New York State bar.  He 
is 
a graduate of Colgate University and New York University School of 
Law.

     Thomas R. Brown, age 42, joined the Managing Shareholder in 
November 1994 as Senior Vice President and holds the same position 
with RPMC, the Trust and each of the other trusts sponsored by the 
Managing Shareholder.  He became Chief Operating Officer of the 
Managing Shareholder, RPMC and the five trusts in October 1996.  Mr. 
Brown has over 19 years' experience in the development and operation 
of power and industrial projects.  From 1992 until joining Ridgewood 
Power he was employed by Tampella Services, Inc., an affiliate of 
Tampella, Inc., one of the world's largest manufacturers of boilers 
and related equipment for the power industry.  Mr. Brown was Project 
Manager for Tampella's Piney Creek project, a $100 million 
bituminous 
waste coal fired circulating fluidized bed power plant.  Between 
1990 
and 1992 Mr. Brown was Deputy Project Manager at Inter-Power of 
Pennsylvania, where he successfully developed a 106 megawatt coal 
fired facility.  Between 1982 and 1990 Mr. Brown was employed by 
Pennsylvania Electric Company, an integrated utility, as a Senior 
Thermal Performance Engineer.  Prior to that, Mr. Brown was an 
Engineer with Bethlehem Steel Corporation.  He has an Bachelor of 
Science degree in Mechanical Engineering from Pennsylvania State 
University and an MBA in Finance from the University of 
Pennsylvania. 
 Mr. Brown satisfied all requirements to earn the Professional 
Engineer designation in 1985.

     Martin V. Quinn, age 48, assumed the duties of Chief Financial 
Officer of the Managing Shareholder, the Trust, the other four 
trusts organized by the Managing Shareholder and RPMC in November 
1996.  Under a consulting arrangement which concluded on March 31, 
1997, Mr. Quinn devoted a 
majority of his time to the business of the Managing Shareholder and 
RPMC while continuing his other activities.  On April 1, 1997 he 
became a full-time officer of the Managing Shareholder and RPMC.  

     Mr. Quinn has 27 years of experience in financial management 
and corporate mergers and acquisitions, gained with major, publicly-
traded companies and an international accounting firm.  He formerly 
served as Vice President of Finance and Chief Financial Officer of 
NORSTAR Energy, an energy services company, from February 1994 until 
June 1996.  From 1991 to March 1993, Mr. Quinn was employed by 
Brown-Forman Corporation, a diversified consumer products company 
and distiller, where he was Vice President-Corporate Development.  
From 1981 to 1991, Mr. Quinn held various officer-level positions 
with NERCO, Inc., a mining and natural resource company, including 
Vice President- Controller and Chief Accounting Officer for his last 
six years and Vice President-Corporate Development.  Mr. Quinn's 
professional qualifications include his certified public accountant 
qualification in New York State, membership in the American 
Institute of Certified Public Accountants, six years of experience 
with the international accounting firm of Price Waterhouse, and a 
Bachelor of Science degree in Accounting and Finance from the 
University of Scranton (1969).

     Mary Lou Olin, age 44, has also served as Vice President of the 
Managing Shareholder, RPMC, the Trust, Ridgewood Power II, Ridgewood 
Power III and Ridgewood Power IV since their respective inceptions. 
 
She has also served as Vice President of Ridgewood Energy since 
October 1984, when she joined the firm.  Her primary areas of 
responsibility are investor relations, communications and 
administration.  Prior to her employment at Ridgewood Energy, Ms. 
Olin 
was a Regional Administrator at McGraw-Hill Training Systems where 
she 
was employed for two years.  Prior to that, she was employed by RCA 
Corporation.  Ms. Olin has a Bachelor of Arts degree from Queens 
College.

     Donald C. Stewart, age 52, serves as an advisor and consultant 
to 
the Trust and is expected to be actively involved in reviewing the 
Trust's acquisitions, as well as providing certain advice on 
operations.  Mr. Stewart has 25 years of expertise in the field of 
independent power generation, fuel procurement, engineering and 
finance.  Mr. Stewart spent the first ten years of his business 
career 
as a certified public accountant with a major international firm.  
He 
has been the Chairman of Vermont Gas Systems, a regulated public 
utility, President of Consolidated Power Company, a developer of 
large 
scale cogeneration projects and President of Hercules Engines, Inc., 
a 
manufacturer of industrial engines and electrical generation 
equipment. Mr. Stewart has a Bachelor of Science degree from Lehigh 
University.

     Douglas R. Wilson, age 36, joined Mr. Stewart in October 1996 
to provide financial advisory services for evaluating, structuring 
and overseeing the Trust's investments.  He has over 13 years of 
capital markets experience, including specialization in complex 
lease and project financings and in energy-related businesses.  From 
January 1993 until October 1996, he was associated with BTM Capital 
Corporation, the structured finance unit of the Bank of Tokyo-
Mitsubishi.  Before that he earned a Master's degree in Business 
Administration from the Wharton School of the University of 
Pennsylvania from September 1990 through May 1992.  He has a 
Bachelor of Business Administration degree from the University of 
Texas. 

(c)  Management Agreement.

     The Trust has entered into a Management Agreement with the 
Managing Shareholder, its Managing Shareholder, detailing how the 
Managing Shareholder will render management, administrative and 
investment advisory services to the Trust.  Specifically, the 
Managing 
Shareholder will perform (or arrange for the performance of) the 
management and administrative services required for the operation of 
the Trust.  Among other services, it will administer the accounts 
and 
handle relations with the Investors, provide the Trust with office 
space, equipment and facilities and other services necessary for its 
operation and conduct the Trust's relations with custodians, 
depositories, accountants, attorneys, brokers and dealers, corporate 
fiduciaries, insurers, banks and others, as required.  The Managing 
Shareholder will also be responsible for making investment and 
divestment decisions, subject to the provisions of the Declaration. 
 
The Managing Shareholder will be obligated to pay the compensation 
of 
the personnel and all administrative and service expenses necessary 
to 
perform the foregoing obligations.  The Trust will pay all other 
expenses of the Trust, including transaction expenses, valuation 
costs, expenses of preparing and printing periodic reports for 
Investors and the Commission, postage for Trust mailings, Commission 
fees, interest, taxes, legal, accounting and consulting fees, 
litigation expenses and other expenses properly payable by the 
Trust. 
The Trust will reimburse the Managing Shareholder for all such Trust 
expenses paid by it.

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

     The Board of the Trust (including both initial Independent 
Trustees) have approved the initial Management Agreement and its 
renewals.  Each Investor consented to the terms and conditions of 
the 
initial Management Agreement by subscribing to acquire Investor 
Shares 
in the Trust.  The Management Agreement will remain in effect until 
January 4, 1998 and year to year thereafter as long as it is 
approved 
at least annually by (i) either the Board of the Trust or a majority 
in interest of the Investors and (ii) a majority of the Independent 
Trustees.  The agreement is subject to termination at any time on 60 
days' prior notice by the Board, a majority in interest of the 
Investors or the Managing Shareholder.  The agreement is subject to 
amendment by the parties with the approval of (i) either the Board 
or 
a majority in interest of the Investors and (ii) a majority of the 
Independent Trustees.

(d)  Executive Officers of the Trust.

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

(e)  The Trustees.

     The 1940 Act requires the Independent Trustees to be 
individuals 
who are not "interested persons" of the Trust as defined under the 
1940 Act (generally, persons who are not affiliated with the Trust 
or 
with affiliates of the Trust).  There must always be at least two 
Independent Trustees; a larger number may be specified by the Board 
from time to time.  Each Independent Trustee has an indefinite term. 
 
Vacancies in the authorized number of Independent Trustees will be 
filled by vote of the remaining Board members so long as there is at 
least one Independent Trustee; otherwise, the Managing Shareholder 
must call a special meeting of Investors to elect Independent 
Trustees.  Vacancies must be filled within 90 days.  An Independent 
Trustee may resign effective on the designation of a successor and 
may 
be removed for cause by at least two-thirds of the remaining Board 
members or with or without cause by action of the holders of at 
least 
two-thirds of Shares held by Investors.  Under the Declaration, the 
Independent Trustees are authorized to act only where their consent 
is 
required under the 1940 Act and to exercise a general power to 
review 
and oversee the Managing Shareholder's other actions.  They are 
under 
a fiduciary duty similar to that of corporation directors to act in 
the Trust's best interest and are entitled to compel action by the 
Managing Shareholder to carry out that duty, if necessary, but 
ordinarily they have no duty to manage or direct the management of 
the 
Trust outside their enumerated responsibilities.

     The Independent Trustees of the Trust are John C. Belknap and 
Dr. 
Richard D. Propper.  Mr. Belknap and Dr. Propper also serve as 
independent trustees for Ridgewood Power IV.  Set forth below is 
certain information concerning these individuals, who are not 
otherwise affiliated with the Trust, the Managing Shareholder or 
their 
directors, officers or agents.

     John C. Belknap, age 50, joined OfficeMax Inc. in December 1995 
as Executive Vice President and Chief Financial Officer.  From 
February 1994 to February 1995, Mr. Belknap was Executive Vice 
President and Chief Financial Officer of Zale Corporation, a 1,200 
store jewelry retain chain.  From January 1990 to January 1994 and 
from February 1995 to December 1995, Mr. Belknap was an independent 
financial consultant.  From January 1989 through May 1993 he aso 
served as a director of and consultant to Finlay Enterprises, Inc., 
an operatior ofleased fine jewelry departments in major department 
stores nationwide.  Prior to 1989, Mr. Belknap served as Chief 
Financial Officer of Seligman & Latz, Kay Corporation and its 
subsidiary, Kay Jewelers, Inc.

     From January 1990 until February 1994, Mr. Belknap consulted in 
a 
variety of strategic corporate transactions, including mergers and 
acquisitions, divestitures and refinancing.  One such transaction 
involved the recapitalization and change of control of Finlay in May 
1993.  From 1979 to 1985, Mr. Belknap served as Chief Financial 
Officer of Kay Corporation ("Kay"), the parent of Kay Jewelers, Inc. 
("KJI"), a national chain of jewelry stores and leased jewelry 
departments in major department stores.  He served as Chief 
Financial 
Officer of KJI from 1974 to 1979 and as its Assistant Controller 
from 
1973 to 1974.  Between 1970 and 1973, Mr. Belknap was a senior 
auditor 
at Arthur Young & Company (now Ernst & Young), a national accounting 
firm.  Mr. Belknap earned BA and MBA degrees from Cornell 
University.

     Dr. Richard D. Propper, age 48, graduated from McGill 
University 
in 1969 and received his medical degree from Stanford University in 
1972.  He completed his internship and residency in Pediatrics in 
1974, and then attended Harvard University for post doctoral 
training 
in hematology/oncology.  Upon the completion of such training, he 
joined the staff of the Harvard Medical School where he served as an 
assistant professor until 1983.  In 1983, Dr. Propper left academic 
medicine to found Montgomery Medical Ventures, one of the largest 
medical technology venture capital firms in the United States.  He 
served as managing general partner of Montgomery Medical Ventures 
until 1993.

     Dr. Propper is currently a consultant to a variety of companies 
for medical matters, including international opportunities in 
medicine.  In June 1996 Dr. Propper agreed to an order of the 
Commission that required him to make filings under Sections 13(d) 
and (g) and 16 of the 1934 Act and that imposed a civil penalty of 
$15,000.  In entering into that agreement, Dr. Propper did not admit 
or deny any of the alleged failures to file recited in that order.

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

     The Trustees are not liable to persons other than Shareholders 
for the obligations of the Trust.

     The Trust has relied and will continue to rely on the Managing 
Shareholder and engineering, legal, investment banking and other 
professional consultants (as needed) and to monitor and report to 
the 
Trust concerning the operations of Projects in which it invests, to 
review proposals for additional development or financing, and to 
represent the Trust's interests.  The Trust will rely on such 
persons 
to review proposals to sell its interests in Projects in the future.

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

     Mr. Brown and Mr. Quinn did not file on a timely basis as 
required by section 16(a) of the 1934 Act Forms 3 reporting their 
status as officers or directors of the Trust and their beneficial 
ownership.  Each person made one late filing of Form 3 in December 
1996.  The number of transactions that were not reported on a timely 
basis by each of these persons was zero.

(g)  RPMC.

     As discussed above at Item 1 - Business, RPMC assumed day-to-
day management responsibility for the South Boston Project, 
effective January 1, 1996.  Like the Managing Shareholder, RPMC is 
wholly owned by Robert E. Swanson.  It entered into an "Operation 
Agreement" with the Trust's subsidiary that owns the Project, 
effective January 1, 1996, under which RPMC, under the supervision 
of the Managing Shareholder, will provide the management, 
purchasing, engineering, planning and administrative services for 
the South Boston Project that were previously furnished by employees 
of the Trust or by unaffiliated professionals or consultants and 
funded as operating expenses, as well as billing, payment and other 
Project-level costs. To the extent that those services were provided 
by the Managing Shareholder and related directly to the operation of 
the Project, RPMC will charge the Trust at its cost for these 
services and for the Trust's allocable amount of certain overhead 
items. RPMC will share space and facilities with the Managing 
Shareholder and its affiliates. To the extent that common expenses 
can be reasonably allocated to RPMC, the Managing Shareholder may, 
but is not required to, charge RPMC at cost for the allocated 
amounts and such allocated amounts will be borne by the Trust and 
other programs.  Common expenses that are not so allocated will be 
borne by the Managing Shareholder.  

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

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

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

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

     The officers of RPMC are Mr. Swanson (President), Mr. Gold 
(Executive Vice President), Mr. Brown (Senior Vice President and 
Chief Operating Officer), Mr. Quinn (Senior Vice President and Chief 
Financial Officer), Ms. Olin (Vice President), Joseph A. Heyison, 
General Counsel, and Douglas V. Liebschner, Vice President - 
Operations.  Mr. Heyison, age 42, joined RPMC in January 1996.  He 
was previously of counsel to the law firm of De Forest & Duer, 
concentrating in corporate finance, banking, environmental law and 
securities.  He is a member of the bars of New Jersey, New York and 
Ohio and was graduated from the University of Pennsylvania Law 
School in 1979.

     Douglas V. Liebschner, age 50, joined RPMC in June 1996 as Vice 
President of Operations.  He has over 27 years of experience in the 
operation and maintenance of power plants.  From 1992 until joining 
RPMC, he was employed by Tampella Services, Inc., an affiliate of 
Tampella, Inc., one of the world's largest manufacturers of boilers 
and related equipment for the power industry.  Mr. Liebschner was 
Operations Supervisor for Tampella's Piney Creek project, a $100 
million bituminous waste coal fired circulating fluidized bed (CFB) 
power plant.  Between 1989 and 1992, he supervised operations of a 
waste to energy plant in Poughkeepsie, N.Y. and an anthracite waste 
coal burning CFB in Frackville, Pa.  From 1969 to 1989, Mr. 
Liebschner served in the U.S. Navy, retiring with the rank of 
Lieutenant Commander.  While in the Navy, he served mainly in 
billets dealing with the operation, maintenance and repair of ship 
propulsion plants, twice serving as Chief Engineer on board U.S. 
Navy combatant ships.  He has a Bachelor of Science degree from the 
U.S. Naval Academy, Annapolis, Md.


Item 11.  Executive Compensation.

     Through 1995, the executive officers of the Trust and the 
Managing Shareholder were compensated by Ridgewood Energy.  The 
Trust was not charged for their compensation; the Managing 
Shareholder remitted a portion of the fees paid to it by the Trust 
to reimburse Ridgewood Energy for employment costs incurred on 
Ridgewood Power's business.  In 1996 and future years, the Managing 
Shareholder will compensate these persons without additional 
payments by the Trust and will be reimbursed by Ridgewood Energy for 
costs related to Ridgewood Energy's business.  The Trust will 
reimburse RPMC at cost for services provided by RPMC's employees.  
Information as to the fees payable to the Managing Shareholder and 
certain affiliates is contained at Item 13 - Certain Relationships 
and 
Related Transactions.

     As compensation for services rendered to the Trust, pursuant to 
the Declaration, each Independent Trustee is entitled to be paid by 
the Trust the sum of $5,000 annually and to be reimbursed for all 
reasonable out-of-pocket expenses relating to attendance at Board 
meetings or otherwise performing his duties to the Trust.  
Accordingly 
in January 1995 and following years the Trust paid each Independent 
Trustee $5,000 for his services.  The Board of the 
Trust is entitled to review the compensation payable to the 
Independent Trustees annually and increase or decrease it as the 
Board 
sees reasonable.  The Trust is not entitled to pay the Independent 
Trustees compensation for consulting services rendered to the Trust 
outside the scope of their duties to the Trust without prior Board 
approval.

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

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

     The Trust sold 105.5 Investor Shares (approximately $10.5 
million 
of gross proceeds) of beneficial interest in the Trust pursuant to a 
private placement offering under Rule 506 of Regulation D under the 
Securities Act.  The offering closed on March 31, 1992.  Further 
details concerning the offering are set forth above at Item 1-- 
Business.  No person beneficially owns 5% or more of the Investor 
Shares.

     Ridgewood Power, the Managing Shareholder of the Trust, 
purchased 
for cash in the offering 1 Investor Share, equal to .9 of 1% of the 
outstanding Investor Shares, and Mr. Swanson purchased an additional 
2.1 Investor Shares.  By virtue of its purchase of that Investor 
Share, Ridgewood Power is entitled to the same ratable interest in 
the 
Trust as all other purchasers of Investor Shares.  No other Trustees 
or executive officers of the Trust acquired Investor Shares in the 
Trust's offering.

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

Item 13.  Certain Relationships and Related Transactions.

     The Declaration provides that cash flow of the Trust, less 
reasonable reserves which the Trust deems necessary to cover 
anticipated Trust expenses, is to be distributed to the Investors 
and 
the Managing Shareholder (collectively, the "Shareholders"), from 
time 
to time as the Trust deems appropriate.  Prior to Payout (the point 
at 
which Investors have received cumulative distributions equal to the 
amount of their capital contributions), each year all distributions 
from the Trust, other than distributions of the revenues from 
dispositions of Trust Property, are to be allocated 99% to the 
Investors and 1% to the Managing Shareholder until Investors have 
received annual distributions equal to 15% of their Capital 
Contributions (a "15% Priority Distribution") and thereafter any 
remaining distributions will be allocated 80% to the Investors and 
20% 
to the Managing Shareholder.  Revenues from dispositions of Trust 
Property are to be distributed 99% to Investors and 1% to the 
Managing 
Shareholder until Payout.  In all cases, after Payout, Investors are 
to be allocated 80% of all distributions and the Managing 
Shareholder 
20%.    

     For any fiscal period, the Trust's net profits, if any, other 
than those derived from dispositions of Trust Property, are 
allocated 
99% to the Investors and 1% to the Managing Shareholder until the 
profits so allocated offset (1) the aggregate 15% Priority 
Distribution to all Investors and (2) any net losses from prior 
periods that had been allocated to the Shareholders.  Any remaining 
net profits, other than those derived from dispositions of Trust 
Property, are allocated 80% to the Investors and 20% to the Managing 
Shareholder.  If the Trust realizes net losses for the period, the 
losses are allocated 80% to the Investors and 20% to the Managing 
Shareholder until the losses so allocated offset any net profits 
from 
prior periods allocated to the Shareholders.  Any remaining net 
losses 
are allocated 99% to the Investors and 1% to the Managing 
Shareholder. 
 Revenues from dispositions of Trust Property are allocated in the 
same manner as distributions from such dispositions.  Amounts 
allocated to the Investors are apportioned among them in proportion 
to 
their capital contributions. 

     On liquidation of the Trust, the remaining assets of the Trust 
after discharge of its obligations, including any loans owed by the 
Trust to the Shareholders, will be distributed, first, 99% to the 
Investors and the remaining 1% to the Managing Shareholder, until 
Payout, and any remainder will be distributed to the Shareholders in 
proportion to their capital accounts.

     In 1996, 1995 and 1994, the Trust made distributions to the 
Managing Shareholder (which is a member of the Board of the Trust) 
as 
stated at Item 5 - Market for Registrant's Common Equity and Related 
Stockholder Matters.  In addition, the Trust paid fees to the 
Managing 
Shareholder and its affiliates as follows:


     Fee          Paid to         1996          1995           1994
Management fee    Managing
                  Shareholder     $49,255       $86,510     $96,000
Cost
 reimbursements*  RPMC          1,098,910             0

* Prior to 1996, these costs were either paid by the Trust or by the Project 
directly.  These include all payroll, fuel and other expenses of operating the 
South Boston Project and an allocable portion of RPMC overhead.

     The management fee, payable monthly under the Management 
Agreement at the annual rate of 1% of the Trust's net asset value 
(until June 1994, of the Trust's total capital contributions), 
began on the closing of the offering and compensates the Managing 
Shareholder for certain management, administrative and advisory 
services for the Trust.  In addition to the foregoing, the Trust 
reimbursed the Managing Shareholder at cost for expenses and fees of 
unaffiliated persons engaged by the Managing Shareholder for Trust 
business and for payroll and other costs of operation of the Trust's 
Projects. The reimbursements to RPMC, which do not exceed its actual 
costs, are described at Item 10(f) - Directors and Executive 
Officers 
of the Registrant -- RPMC.

     In addition to the foregoing, the Trust reimbursed the Managing 
Shareholder at cost for expenses and fees of unaffiliated persons 
engaged by the Managing Shareholder for Trust business and in years 
before 1996 for payroll and other costs of operation of the South 
Boston Project.  In 1996, these reimbursements were paid to RPMC.  
The 
reimbursements to RPMC, which do not exceed its actual costs, are 
described at Item 10(f) - Directors and Executive Officers of the 
Registrant -- RPMC.

     Other information in response to this item is reported in 
response to Item 11 -- Executive Compensation, which information is 
incorporated by reference into this Item 13.

PART IV

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

     (a)  Financial Statements.

     See the Index to Financial Statements in Item 8 hereof.

     (b)  Reports on Form 8-K.

     No Forms 8-K were filed with the Commission by the Registrant 
during the quarter ending December 31, 1996.  


     (c)  Exhibits.

     3A.  Certificate of Trust of the Registrant is incorporated by 
          reference to Exhibit 3A of Registrant's Registration 
          Statement which was filed with the Commission on May 26, 
          1994.

     3B.  Declaration of Trust of Registrant is incorporated by 
          reference to Exhibit 3B of Registrant's Registration 
          Statement which was filed with the Commission on May 26, 
          1994.

     3C.  Agreement of Limited Partnership of Ridgewood Energy 
          Electric Power, L.P. dated as of March 6, 1991 is 
          incorporated by reference to Exhibit 3C of Registrant's 
          Registration Statement which was filed with the Commission 
          on May 26, 1994.

     10A.  Management Agreement between the Registrant and Ridgewood 
           Power Corporation is incorporated by reference to Exhibit 
           10A of Registrant's Registration Statement which was 
filed 
           with the Commission on May 26, 1994.

     10B.  Stillwater Hydro Partners L.P. Amended and Restated 
           Agreement of Limited Partnership dated as of July 29, 
1991 
           and letter of amendment thereof dated as of May 16, 1994 
is 
           incorporated by reference to Exhibit 10B of Registrant's 
           Registration Statement which was filed with the 
Commission 
           on May 26, 1994.

     10C.  Power Purchase Agreement dated as of September 19, 1989 
           between Stillwater Hydro Partners L.P. and Niagara Mohawk 
           Power Corporation and amendment thereof dated as of 
August 
           28, 1990 is incorporated by reference to Exhibit 10C.

     10D.  RW Power Partners L.P. Agreement and Restated Agreement 
of 
           Limited Partnership dated as of October 1, 1992 among 
           Ridgewood Energy Electric Power, L.P., Ridgewood Power 
           Corporation and WE GEN, Inc. is incorporated by reference 
           to Exhibit 10D of Registrant's Registration Statement 
which 
           was filed with the Commission on May 26, 1994.

     10E.  Agreement for the Sale of Electric Output to Virginia 
           Electric and Power Company ("VEPCO") dated February 20, 
           1992 between VEPCO and WE GEN Inc. is incorporated by 
           reference to Exhibit 10E of Registrant's Registration 
           Statement which was filed with the Commission on May 26, 
           1994.

     10F.  Assignment and Consent to Assignment dated as of October 
           16, 1992 among VEPCO, WE GEN Inc. and RW Power Partners 
           L.P. is incorporated by referent to Exhibit 10F of 
           Registrant's Registration Statement which was filed with 
           the Commission on May 26, 1994.

     10G.  Agreement of Limited Partnership of Brea Power Partners, 
           L.P. dated as of October 12, 1994 by and between Brea 
Power 
           (I), Inc., GSF Energy Inc. and Ridgewood Electric Power 
           Trust I is incorporated by reference to Registrant's Form 
           8-K filed with the Commission on October 27, 1994.

     10H.  Agreement, dated as of January 16, 1997, by and between 
           RW Power Partners, L.P. and Virginia Electric Power 
           Company.                                     Page 83

     21.   Subsidiaries of the Registrant, is incorporated by 
           reference to Exhibit 21 of Registrant's Annual Report on 
           Form 10-K for the year ended December 31, 1995.

     24.   Powers of Attorney                             Page 89
     
     27.   Financial Data Schedule                        Page 90

SIGNATURES

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


     Signature                  Title                       Date

RIDGEWOOD ELECTRIC POWER TRUST I
 (Registrant)


By: /s/Robert E. Swanson        President and Chief     April 14, 1997
     Robert E. Swanson          Executive Officer


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


By:  /s/Robert E. Swanson      President and Chief      April 14, 1997
     Robert E. Swanson         Executive Officer


By: /s/Martin V. Quinn         Senior Vice President and
     Martin V. Quinn           Chief Financial Officer  April 15, 1997

By: /s/Kathleen P. McSherry    Controller               April 15, 1997
      Kathleen P. McSherry

RIDGEWOOD POWER CORPORATION           Managing Shareholder

By: /s/Robert E. Swanson        President               April 14, 1997
     Robert E. Swanson






  /s/Robert E. Swanson *        Independent Trustee     April 14, 1997
     John C. Belknap

  /s/                           Independent Trustee     April __, 1997
     Dr. Richard D. Propper

*  As attorney-in-fact for the Independent Trustee




<PAGE>
Ridgewood Electric Power Trust I

(formerly Ridgewood Energy Electric Power, L.P.)

Financial Statements

December 31, 1996, 1995 and 1994



















                                 -F1-

<PAGE>


1177 Avenue of the Americas         Telephone 212 596 7000
New York, NY 10036                  Facsimile 212 596 8910
[Letterhead of Price Waterhouse LLP]

Report of Independent Accountants

March 24, 1997

To the Shareholders and Trustees of
Ridgewood Electric Power Trust I (formerly
Ridgewood Energy Electric Power, L.P.)

In our opinion, the accompanying balance sheet and the related 
statements of operations, changes in shareholders' equity (partners' 
capital through June 14, 1994) and of cash flows present fairly, in 
all material respects, the financial position of Ridgewood Electric 
Power Trust I (formerly Ridgewood Energy Electric Power, L.P.) at 
December 31, 1996 and 1995, and the results of its operations and 
its cash flows for each of the three years in the period ended 
December 31, 1996, in conformity with generally accepted accounting 
principles.  These financial statements are the responsibility of 
the Trust's management; our responsibility is to express an opinion 
on these financial statements based on our audits.  We conducted our 
audits of these statements in accordance with generally accepted 
auditing standards which require that we plan and perform the audit 
to obtain reasonable assurance about whether the financial 
statements are free of material misstatement.  An audit includes 
examining, on a test basis, evidence supporting the amounts and 
disclosures in the financial statements, assessing the accounting 
principles used and significant estimates made by management, and 
evaluating the overall financial statement presentation.  We believe 
that our audits provide a reasonable basis for the opinion expressed 
above.

As explained in Note 3, the financial statements include 
investments, valued at $6,810,208 and $7,207,846 (103% and 104% of 
shareholders' equity, respectively) as of December 31, 1996 and 
1995, respectively, whose values have been estimated by management 
in the absence of readily ascertainable market values.  We have 
reviewed the procedures used by management in arriving at their 
estimate of value and have inspected underlying documentation, and, 
in the circumstances, we believe the procedures are reasonable and 
the documentation appropriate.  However, because of the inherent 
uncertainty of valuation, those estimated values may differ 
significantly from the values that would have been used had a ready 
market for the investments existed, and the differences could be 
material to the financial statements.

/s/  Price Waterhouse LLP

                               -F2-

<PAGE>

Ridgewood Electric Power Trust I
(formerly Ridgewood Energy Electric Power, L.P.)
Statement of Operations


                                               Year Ended December 31,
                                     1996               1995              1994

Revenue:

 Income from power 
  generating projects       $     606,863     $      552,769     $     936,336
 Interest and dividend
  income                            2,674                ---            78,627
   Total revenues                 609,537            552,769         1,014,963



Expenses:
 Accounting and legal
  fees                             47,500             34,092           135,780
 Management fee                    49,255             86,510            96,000
 Trustee fees                      10,000             10,000            10,000
 Writedown of limited
  partnership investments             ---                ---           814,669
 Miscellaneous                      5,980              3,750             5,335
                                  112,735            134,352         1,061,784
               
               
Net income (loss)           $     496,802    $       418,417    $      (46,821)
Allocation to:               
 Shareholders               $     491,834    $       414,233    $      (46,353)
 Managing shareholder               4,968              4,184              (468)
                            $     496,802    $       418,417    $      (46,821)
               
                              

See accompanying notes to financial statements.






                                      -F3-


<PAGE>

Ridgewood Electric Power Trust I
(formerly Ridgewood Energy Electric Power, L.P.)
Balance Sheet

                                                      Year Ended December 31,

                                                     1996                 1995

Assets:

Investments in project development
 and power generation limited
 partnerships                              $    6,810,208         $  7,207,846
Cash and cash equivalents                         327,322                5,643
Advances to RW Power Partners, L.P.               367,667              317,817
               
   Total assets                            $    7,505,197         $  7,531,306
               
               
               
               
Liabilities and Shareholders' Equity:               
               
  Accounts payable and accrued expenses    $       71,149         $     44,812
  Due to affiliates                               829,407              570,057
                                                  900,556              614,869
               
               
Shareholders' equity               
Shareholders' equity 
 (105.5 shares issued
 and outstanding)                               6,628,753            6,937,431
Managing shareholder's
 accumulated deficit                              (24,112)             (20,994)
               
   Total shareholders' equity                   6,604,641            6,916,437
               
   Total liabilities and
    shareholders' equity                   $    7,505,197         $  7,531,306
                 
               

See accompanying notes to financial statements.


                                        -F4-

<PAGE>

Ridgewood Electric Power Trust I
(formerly Ridgewood Energy Electric Power, L.P.)
Statement of Changes in Shareholders' Equity 
  (Partners' Capital through June 14, 1994)


                                                    Managing     
                             Shareholders        Shareholder             Total
               
Partners' capital,
 December 31, 1993           $  8,152,476     $       (9,116)   $    8,143,360
               
Cash distributions               (736,289)            (7,443)         (743,732)
               
Net loss for the year             (46,353)              (468)          (46,821)
                  
Shareholders' equity,
 December 31, 1994              7,369,834            (17,027)        7,352,807
                     
Cash distributions               (846,636)            (8,151)         (854,787)
               
Net income for the year           414,233              4,184           418,417
               
Shareholders' equity,
 December 31, 1995              6,937,431            (20,994)        6,916,437
               
Cash distributions               (800,512)            (8,086)         (808,598)
               
Net income for the year           491,834              4,968           496,802
                  
Shareholders' equity,
 December 31, 1996           $  6,628,753     $      (24,112)   $    6,604,641
               
               
               
               
See accompanying notes to financial statements.




                                -F5-

<PAGE>
Ridgewood Electric Power Trust I     
(formerly Ridgewood Energy Electric Power, L.P.)     
Statement of Cash Flows     
                                               Year Ended December 31,
                                     1996               1995              1994

Cash flows from operating activities:
 Net income (loss)            $   496,802        $   418,417       $   (46,821)
           
Adjustments to reconcile net
 income (loss) to net cash 
 provided by (used in) 
 operating activities:
  Writedown of limited
   partnership investments            ---                ---           814,669
  Purchase of investments in
   electric power limited
   partnerships                       ---           (489,007)       (3,330,672)
  Return of investment in
   electric power limited
   partnerships                   397,638            440,916               ---
Changes in assets and
 liabilities:               
  Decrease in due diligence
   costs relating to potential
   power project investments          ---                ---             4,374
  Increase in due from
   affiliates                     (49,850)          (317,817)              ---
  Decrease (increase)
   in other assets                    ---             70,000           (70,000)
  Increase (decrease)
   in accounts payable and
   accrued expenses                26,337            (72,326)           75,835
  Increase in due to
   affiliates                     259,350            570,057               ---
               
Total adjustments                 633,475            201,823        (2,505,794)
                  
Net cash provided by
 (used in) operating
 activities                     1,130,277            620,240        (2,552,615)
               
Cash flows used in financing
 activities:               
  Cash distributions to
   shareholders (partners
   through June 14, 1994)        (808,598)          (854,787)         (743,732)
  Net cash used in
   financing activities          (808,598)          (854,787)         (743,732)
  Net increase (decrease)
   in cash and cash
   equivalents                    321,679           (234,547)       (3,296,347)
               
Cash and cash equivalents,
 beginning of year                  5,643            240,190         3,536,537 
Cash and cash equivalents,
 end of year                  $   327,322        $     5,643       $   240,190 

See accompanying notes to financial statements.
                                      -F6-

<PAGE>


Ridgewood Electric Power Trust I
(formerly Ridgewood Energy Electric Power, L.P.)
Notes to Financial Statements

1.  Organization and Purpose

  Nature of business

     Ridgewood Energy Electric Power, L.P. (the "Partnership") was 
formed as a Delaware limited partnership on March 6, 1991, by 
Ridgewood Power Corporation acting as the general partner.  On April 
30, 1991, Beale Lynch Power Partners Inc. was admitted as co-general 
partner of the Partnership.  The Partnership began offering limited 
partnership units in the Partnership on May 1, 1991.  The 
Partnership commenced operations on September 16, 1991 and 
discontinued its offering of units on March 31, 1992.

     On June 15, 1994, with the approval of the partners, the 
Partnership merged all of its assets and liabilities into a newly 
formed trust, called Ridgewood Electric Power Trust I (the "Trust"). 
 Effective July 25, 1994, the Trust elected to be treated as a 
"Business Development Company" ("BDC") under the Investment Company 
Act of 1940 and registered its shares under the Securities Act of 
1934.  In connection with this transaction, the Trust issued 105.5 
shares in exchange for outstanding Partnership units.  Ridgewood 
Power Corporation is the sole managing shareholder.

     The Trust has been organized to invest in independent power 
generation facilities and in the development of these facilities.  
These independent power generation facilities include small power 
production facilities which produce electricity from waste oil, 
landfill gas and  water.  The power plants sell electricity to 
utilities under long-term contracts.

2.  Summary of Significant Accounting Policies

  Use of Estimates

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

Investments in project development and power generation limited 
partnerships

     The Trust holds partnership interests in power generating 
limited partnerships, which are stated at fair value.  Due to the 
non-liquid nature of the investments, the fair values of the 
investments are assumed to equal cost, unless current available 
information provides a basis for adjusting the carrying value of the 
investments.

  Revenue recognition

     Income from investments is recorded when received.  Interest 
and dividend income are recorded as earned.

  Offering costs

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

                             -F7-

<PAGE>
Ridgewood Electric Power Trust I
(formerly Ridgewood Energy Electric Power, L.P.)
Notes to Financial Statements

  Cash and Cash Equivalents

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

  Due diligence costs relating to potential power project 
investments

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

  Income Taxes

     No provision is made for income taxes in the accompanying 
financial statements as the income or losses of the Trust are passed 
through and included in the tax returns of the individual 
shareholders of the Trusts.

  Reclassification

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

3.  Investments in Project Development and Power Generation Limited 
Partnerships

     The Trust had the following investments in power generation 
limited partnerships:

                                                  Fair values as of December 31,

                                                     1996                 1995 

Power generation limited partnerships:
 Stillwater Hydro Partners, L.P.            $   1,000,000        $   1,000,000
 RW Power Partners, L.P.                        3,527,923            3,527,923
 Brea Power Partners, L.P.                      2,282,285            2,679,923
                                            $   6,810,208        $   7,207,846


Investments in power generation limited partnerships

Stillwater Hydro Partners, L.P.

     On October 31, 1991, the Trust acquired a 32.5% general 
partner's interest in a limited partnership whose sole business is 
the construction, ownership and operation of a 3.5 megawatt 
hydroelectric facility, located on the Hudson River in Stillwater, 
New York.  At the time of the investment, the project was under 
construction and commenced operations in May 1993.

     A distribution of $126,707 was received by the Trust in 1994.  
On May 16, 1994 the Trust, as stipulated in the limited partnership 
agreement, elected to exchange its general partner interest  for a 
limited partnership interest and a priority distribution of 
available cash flow from the project in the aggregate amount of 
$1,000,000.  Such distribution is payable from available cash flows 
in nine annual installments together with interest at 12% per year, 
which were scheduled to begin in May 1995.  

                                   -F8-

<PAGE>
 

Ridgewood Electric Power Trust I
(formerly Ridgewood Energy Electric Power, L.P.)
Notes to Financial Statements

     The ultimate ability of the project to meet its payment 
obligations to the Trust is dependent on the actual operating 
performance of the Stillwater Project, which, in turn, is largely 
dependent upon water levels in the Hudson River.  In 1995, the 
Hudson River basin experienced a severe drought, resulting in Hudson 
River water levels substantially below normal.  As a result of the 
low water levels, the operating results of the project were 
insufficient to meet its debt payments, and accordingly, no 
distributions were made to the Trust in 1995.  Although increased 
precipitation in late 1995 and early 1996 brought flow levels back 
toward the norm, high water flows damaged portions of the facility, 
including the recently installed modifications for capturing 
additional water flow.

     As a result, all available cash flow from the Stillwater 
Project is being applied to meet debt service requirements.  Until 
water flows return to expected levels, repairs are completed and the 
current arrears in debt servicing are made up, it appears likely 
that most, if not all, of the payments due to the Trust will be 
deferred and carried forward, with interest, into subsequent years.

     Electricity generated by the Stillwater Project is sold to 
Niagara Mohawk Power Corporation under a long-term Power Contract 
with a remaining term of 31 years.  Niagara Mohawk has argued before 
the New York Public Service Commission, the state agency that 
regulates the electric utility industry, and the Federal Energy 
Regulatory Commission ("FERC") that rates it pays to purchase 
electricity under long-term Qualifying Facility contracts are 
uneconomic and that it should be allowed to abrogate those 
contracts.  In April 1995, FERC rejected Niagara Mohawk's 
application and the New York State Public Service Commission has 
also refused the requested relief.  There can be no assurance, 
however, that Niagara Mohawk would not succeed in any future efforts 
to abrogate Qualifying Facility contracts.

RW Power Partners, L.P. (known as the Lynchburg project)

     In October 1992, the Trust entered into a limited partnership 
agreement to provide construction funding of a 3 megawatt project 
using waste oil as its primary fuel source.  Construction of the 
project commenced in January 1993, and commercial operations began 
in June 1993.  Construction of a waste oil processing facility began 
 in 1994, and was completed in 1996.  The total cost of the waste 
oil processing facility was approximately $832,000.  As of December 
31, 1996 and 1995, the Trust funded $3,527,923 of the total cost of 
the original project and the waste oil facility, a portion of which 
was funded by the managing shareholder.  The Trust received 
distributions of $208,000, $163,188 and $622,965 from the limited 
partnership for the periods ended December 31, 1996, 1995 and 1994, 
respectively.  The Trust's investment in and advances to the limited 
partnership amounted to $3,895,590 and  $3,845,740 at December 31, 
1996, and 1995, respectively.

     As a result of the settlement of a lawsuit with Virginia 
Electric Power Company on January 17, 1997, the operation of the 
Lynchburg facility has been suspended.  See Note 6 - Subsequent 
Events for additional details.  

     In exchange for its investment, the Trust has the right to 
receive annually the greater of either 70% of net profits from the 
limited partnership or a preferred minimum return of 22.5% on its 
total investment.  In the event that in any given year all net 
profits from the limited partnership do not cover the amount of the 
preferred minimum return, the amount of such shortfall will be 
payable on a priority basis out of any net profits in subsequent 
years.

                                 -F9-
<PAGE>

Ridgewood Electric Power Trust I
(formerly Ridgewood Energy Electric Power, L.P.)
Notes to Financial Statements

Brea Power Partners, L.P. (known as the Olinda project)

     In October 1994, the Trust made a $3,103,479 limited partner 
investment in a limited partnership ("Brea Partnership"), which 
acquired a 5 megawatt gas-fired electric generating facility and 
related landfill gas processing facility.  The facility has been in 
continuous operation for nine years and is located in Olinda, 
California.

     In exchange for its investment, the Trust is entitled to 
receive, in any year, the lesser of the preference amount (as 
defined in the Partnership Agreement) or 98% of the annual 
distribution, plus 25% of the excess of the annual distribution over 
the preference amount of  the Brea Partnership until the Trust has 
received a cumulative 15% return on its original investment.  After 
such time, the amount the Trust would be entitled to would decrease 
to 5% of net cash flows.

     The Trust received distributions from Brea Partnership of 
$796,501, $859,801 and $117,600 for the years ended December 31, 
1996, 1995 and, 1994, respectively.  Of the cash distributions, 
$397,638 and $440,916 has been treated as a return of investment 
capital during 1996 and 1995, respectively. The Trust's investment 
balance for Olinda at December 31, 1996 and 1995 amounted to 
$2,282,285 and $2,679,923, respectively.

Investments in project development limited partnerships

     The Trust made investments in several limited partnerships with 
other major participants in the power industry to provide access to 
investments in larger projects in which these participants would 
take the leading role in the acquisition or development of such 
projects.  In 1994, the Trust wrote-off its investment in these 
limited partnerships of $814,669.

4.  Transactions With Managing Shareholder and Affiliates

     Prior to the BDC election, the Partnership also paid to the 
general partners a distribution and offering fee in an amount up to 
2.5% of each capital contribution made to the Partnership.  This fee 
was intended to cover legal, accounting, consulting, filing, 
printing, distribution, selling, and closing costs for the offering 
of the Partnership.  These fees were recorded as a reduction in the 
partners' capital contributions.

     Prior to the BDC election in July 1994, the Partnership paid to 
the general partners a management fee not to exceed 4.5% of each 
capital contribution made to the Partnership.  The fee was payable 
to the general partners for their services in investigating and 
evaluating investment opportunities and effecting transactions for 
investing the capital of the Partnership.

     Prior to the BDC election, the Partnership paid to the general 
partners an annual administrative and overhead fee equal to 1% of 
the aggregate capital contributions of the Partnership.  During 
1994, the Partnership paid administrative and overhead fees to the 
general partners of $52,750.

     On June 15, 1994, the Trust entered into a management agreement 
with the managing shareholder, under which the managing shareholder 
renders certain management, administrative and advisory services and 
provides office space and other facilities to the Trust.  As 
compensation to the managing shareholder, the Trust pays the 
managing

                              -F10-

<PAGE>

Ridgewood Electric Power Trust I
(formerly Ridgewood Energy Electric Power, L.P.)
Notes to Financial Statements

shareholder an annual management fee equal to 1.0% of the net assets 
of the Trust payable monthly.  In 1996, management fees of $43,255 
were waived by the managing shareholder.  During 1996, 1995 and 
1994, the Trust paid management fees to the managing shareholder of 
$49,255, $86,510 and $96,000, respectively.

     Under the Declaration of Trust, the managing shareholder is 
entitled to receive each year 1% of all distributions made by the 
Trust (other than those derived from the disposition of Trust 
property) until the shareholders have been distributed in that year 
an amount equal to 15% of their equity contribution.  Thereafter, 
the managing shareholder is entitled to receive 20% of the 
distributions for the remainder of the year.  The managing 
shareholder is entitled to receive 1% of the proceeds from 
dispositions of Trust properties until the shareholders have 
received cumulative distributions equal to their original investment 
("Payout").  In all cases, after Payout the managing shareholder is 
entitled to receive 20% of all remaining distributions of the Trust. 
 During 1996, 1995, and 1994, the Trust made distributions to the 
managing shareholder of $8,086, $8,151, and $7,443, respectively.

     At December 31, 1996 and 1995, the managing shareholder and 
affiliates owned, in the aggregate, 3.0 units of the Trust and made 
capital contributions of $273,000. 

     In connection with the construction of the waste oil facility 
at the Lynchburg Project, the managing shareholder advanced $570,000 
in 1995 and $260,000 in 1996 to the Trust to fund a portion of the 
Trust's investment in the waste oil facility.  No interest was 
charged on the advances.  When the Trust received the settlement 
proceeds described in Note 6- Subesquent Events in January 1997, all 
of these advances were repaid to the managing shareholder without 
interest.

     In 1996, under an Operating Agreement with the Trust, Ridgewood 
Power Management Corporation ("Ridgewood Management"), an entity 
related to the managing shareholder through common ownership, 
provides management, purchasing, engineering, planning and 
administrative services to the Lynchburg Project.  Ridgewood 
Management charges the project at its cost for these services and 
for the allocable amount of certain overhead items.  Allocations of 
costs are on the basis of identifiable direct costs, time records or 
in proportion to amounts invested in projects managed by Ridgewood 
Management.  During the year ended December 31, 1996, Ridgewood 
Management charged the Lynchburg Project $33,948 for overhead items 
allocated in proportion to the amount invested in projects managed, 
and charged the Lynchburg Project for all of the remaining direct 
operating and non-operating expenses incurred during the period.

5.  Contingencies

     In December 1993, a subsidiary of the Trust engaged Blackhawk 
Management Group, Incorporated ("Blackhawk"),a North Carolina 
corporation whose sole owner and employee was the original developer 
of the Lynchburg Project, to manage that Project under contract.  On 
June 9, 1994, the subsidiary terminated the management contract for 
material breach and inequitable conduct by Blackhawk, which then 
sued in the Circuit Court of Halifax County, Virginia on June 8, 
1995.  The action claimed breach of contract by the Trust's 
subsidiary and claimed compensatory damages of $3 million and 
punitive damages of $1 million.  The subsidiary has removed the 
action to the United States District Court for the Western District 
of Virginia, Danville Division.  The Trust believes that the lawsuit 
is without merit, that the Trust's subsidiary has meritorious 
defenses to all claims, and that the claims for damages were

                               -F11-

<PAGE>

Ridgewood Electric Power Trust I
(formerly Ridgewood Energy Electric Power, L.P.)
Notes to Financial Statements

clearly inflated.  The action is in discovery and is pending trial. 
 The Trust does not anticipate any material recovery by the 
plaintiff.

     From time to time, the Trust and its subsidiaries are engaged 
in legal proceedings incident to the normal course of their 
businesses.  The Trust believes that the outcome of these 
proceedings will not have a material impact on the Trusts' financial 
position or results of operations.

6.  Subsequent Events

     On January 17, 1997, the Trust settled the pending lawsuit 
between its subsidiary, RW Power Partners, L.P. ("RWPP"), and 
Virginia Electric Power Company ("VEPCO").  RWPP had sued VEPCO when 
VEPCO attempted to cancel the power purchase contract under which 
VEPCO was required to purchase electricity generated by RWPP at the 
Lynchburg project.

     Under the settlement, VEPCO paid RWPP $3,750,000 in cash and 
waived a claim of $1,800,000 for prepaid capacity payments.  RWPP 
surrendered the power purchase contract to VEPCO and agreed to the 
entry of an order dismissing its lawsuit against VEPCO.  The 
settlement permits RWPP to continue operating the generating station 
and the associated waste oil treatment plant, but RWPP may not sell 
electricity to VEPCO, except at VEPCO's request, and RWPP may only 
sell electricity to investor-owned electric utilities for resale or 
use outside VEPCO's service area.

     In addition, the facility may be operated for non-generating 
purposes such as waste oil treatment and electricity may be 
generated for the facility's needs.  VEPCO may cut the 
interconnection of the facility with its lines and reconnection is 
permitted only for electricity sales in compliance with the 
settlement agreement.  RWPP may remove and sell equipment.  These 
restrictions apply to any future owner of the Lynchburg facility.

     As a result of the operating restrictions and cancellation of 
the power purchase contract included in the VEPCO settlement, the 
operation of the Lynchburg Project facilities was suspended in 
January 1997.  Management of the Trust is considering alternatives 
for the facilities, which include a possible sale or disposition of 
the facilities.  Management of the Trust estimates that a sale of 
its partnership interest in RWPP would result in recovery of its 
investment and advances of $3,895,591.


                               -F12-