UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q/A


(Amendment
No. 2)





þ
            
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
the Quarterly Period Ended September 30, 2009





o
            
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


Commission
file number: 0-53150





NACEL
ENERGY CORPORATION





9375
E Shea Blvd Ste 100


Scottsdale,
Arizona 85260


Telephone
(602) 235-0355





Incorporated
      in Wyoming
            
            IRS
      ID# 20-4315791





Check
whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to the filing requirements for the past
90 days.     Yes þ  
No o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  The registrant has not been
phased into the Interactive Data reporting system.


Yes o No þ





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer o
            Accelerated
      filer oNon-accelerated
      filer o (Do
      not check if a smaller reporting company)
            Smaller
      reporting
              company
      þ





Check
whether the issuer is a shell Company (as defined in Rule 12b-2 of the
Exchange Act).


Yes o No þ





Shares of
common stock outstanding on November 10, 2009: 22,111,000









EXPLANATORY
NOTE





This
Amendment no. 2 on Form 10-Q/A (the “Second Amendment”) hereby amends our report
on Form 10-Q for the period ending September 30, 2009, which we filed with the
Securities and Exchange Commission (“SEC”) on November 13, 2009 (the “Original
Filing”) and an Amendment no. 1 filed on December 31, 2009 (the “First
Amendment”). This Second Amendment is being filed for the purpose of responding
to comments received from the staff of the SEC. In particular, this Second
Amendment contains changes to correct the file number on the Cover Page, provide
revised and expanded disclosures in Item 4 and to file corrected and complete
Certificates, being attached as Exhibits 31.1 and 32.1 to this Second
Amendment.





Except
for the foregoing, no other changes have been made to the Original Filing and
the First Amendment, and this Second Amendment does not modify or update any
other information in the Original Filing or the First
Amendment.  Information not affected by the changes described above is
unchanged and reflects the disclosures made at the time of the Original Filing
or the First Amendment. Accordingly, this Second Amendment should be read in
conjunction with our filings made with the Securities and Exchange Commission
subsequent to the date of the Original Filing and the First
Amendment.









NACEL
ENERGY CORPORATION





INDEX





FOR THE
QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009





PART
      I. FINANCIAL INFORMATION
            
            
            3Item
      1.  Financial Statements
            
            
            3Consolidated
      Balance Sheets
            
            
            3Consolidated
      Statements of Expenses
            
            
            4Consolidated
      Statements of Cash Flows
            
            
            5Notes
      to Consolidated Financial Statements
            
            
            6Item
      4.  Controls and Procedures
            
            
            8PART
      II. OTHER INFORMATION
            
            
            9Item
      6.  Exhibits
            
            
            9





2





PART I. FINANCIAL
INFORMATION




Item
1.  Financial Statements





Nacel
Energy Corporation


(A
Development Stage Company)


Consolidated
Balance Sheets


(Unaudited)





September
      30,
            
            
            March 31,2009
            
            
            2009ASSETSCurrent
      AssetsCash
            
            $
            225,949
            
            
            $
            564,677Property,
      plant and equipment, net of accumulated depreciation of $8,818 and $1,682,
      respectively
            
            
            181,969
            
            
            
            166,495TOTAL
      ASSETS
            
            $
            407,918
            
            
            $
            731,172LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Current
      LiabilitiesAccounts
      payable
            
            $
            75,439
            
            
            $
            7,537Accrued
      interest
            
            
            14,367
            
            
            
            3,894Demand
      note payable
            
            
            250,000
            
            
            
            -Shareholder
      line of credit
            
            
            442,143Total
      current liabilities
            
            
            781,949
            
            
            
            11,431Shareholder
      line of credit
            
            
            -
            
            
            
            250,000Total
      liabilities
            
            
            781,949
            
            
            
            261,431Stockholders'
      equity (deficit)Common
      stock of $.001 par value. Authorized 50,000,000 issued 22,111,000 at
      September 30, and 21,786,000 at March 31, 2009
            
            
            22,111
            
            
            
            21,786Additional
      paid-in capital
            
            
            3,945,861
            
            
            
            3,636,886Deficit
      accumulated during the development stage
            
            
            (4,342,003)
            
            
            
            (3,188,931)Total
      stockholders' equity (deficit)
            
            
            (374,031)
            
            
            
            469,741TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
            
            $
            407,918
            
            
            $
            731,172





See
accompanying notes to consolidated financial statements




3





Nacel
      Energy Corporation(A
      Development Stage Company)Consolidated
      Statements of Expenses(Unaudited)Six
      months ended September 30, 2009 and 2008 and the periodfrom
      February 7, 2006 (Inception) through September 30, 2009InceptionThree
      Months Ended
            
            
            Six
      Months Ended
            
            
            throughSeptember
      30,
            
            
            September
      30,
            
            
            September
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008
            
            
            2009General
      and administrative expenses
            
            $
            287,316
            
            
            $
            143,056
            
            
            $
            489,770
            
            
            $
            1,447,729
            
            
            $
            2,482,612Wind
      projects donated by related party
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            490,000Wind
      project development costs
            
            
            357,739
            
            
            
            72,021
            
            
            
            645,400
            
            
            
            118,950
            
            
            
            1,332,168Net
      loss from operations
            
            
            (645,055
            )
            
            
            (215,077
            )
            
            
            (1,135,170
            )
            
            
            (1,566,679
            )
            
            
            (4,304,780
            )Other
      income (expenses)Interest
      expense
            
            
            (14,367
            )
            
            
            (2,743
            )
            
            
            (17,902
            )
            
            
            (5,373
            )
            
            
            (41,490
            )Interest
      income
            
            
            -
            
            
            
            3,671
            
            
            
            
            
            
            
            3,671
            
            
            
            3,848Other
      income
            
            
            -
            
            
            
            -
            
            
            
            
            
            
            
            279
            
            
            
            419Total
      other expense
            
            
            (14,367
            )
            
            
            928
            
            
            
            (17,902
            )
            
            
            (1,423
            )
            
            
            (37,223
            )Net
      Loss
            
            $
            (659,422
            )
            
            $
            (214,149
            )
            
            $
            (1,153,072
            )
            
            $
            (1,568,102
            )
            
            $
            (4,342,003
            )Basic
      and diluted net loss per share
            
            $
            (0.03
            )
            
            $
            (0.01
            )
            
            $
            (0.05
            )
            
            $
            (0.07
            )
            
            
            N/ABasic
      and diluted weighted average common shares outstanding
            
            
            21,877,087
            
            
            
            21,666,000
            
            
            
            21,850,645
            
            
            
            21,577,366
            
            
            
            N/A




See
accompanying notes to consolidated financial statements




4




Nacel
Energy Corporation
 (A
Development Stage Company)
 Consolidated
Statements of Cash Flows
 (Unaudited)
 Six
months ended September 30, 2009 and 2008 and the period
 from
February 7, 2006 (Inception) through September 30, 2009
 
 InceptionthroughSix Months Ended September
      30,
                  
                  
                  September
      30,2009
                  
                  
                  2008
                  
                  
                  2009CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                  
                  $
                  (1,153,072)
                  
                  
                  $
                  (1,568,102)
                  
                  
                  $
                  (4,342,003)Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                  
                  
                  7,136
                  
                  
                  
                  -
                  
                  
                  
                  8,818Stock
      for services
                  
                  
                  144,300
                  
                  
                  
                  62,240
                  
                  
                  
                  302,490Wind
      projects donated by related party
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  490,000Imputed
      interest
                  
                  
                  -
                  
                  
                  
                  2,630
                  
                  
                  
                  15,725Stock
      issued for executive compensation
                  
                  
                  -
                  
                  
                  
                  1,007,500
                  
                  
                  
                  1,007,500Changes
      in:Prepaid
      and other current assets
                  
                  
                  -
                  
                  
                  
                  (18,723)
                  
                  
                  
                  -Accounts
      payable
                  
                  
                  67,902
                  
                  
                  
                  (78,660)
                  
                  
                  
                  75,439Accrued
      interest
                  
                  
                  10,473
                  
                  
                  
                  2,743
                  
                  
                  
                  14,367Net
      Cash Used in Operating Activities
                  
                  
                  (923,261)
                  
                  
                  
                  (590,372)
                  
                  
                  
                  (2,427,664)CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of fixed assets
                  
                  
                  (22,610)
                  
                  
                  
                  (42,564)
                  
                  
                  
                  (190,787)Net
      Cash Used in Investing Activities
                  
                  
                  (22,610)
                  
                  
                  
                  (42,564)
                  
                  
                  
                  (190,787)CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from shareholder line of credit
                  
                  
                  192,143
                  
                  
                  
                  961
                  
                  
                  
                  439,400Borrowings
      on debt
                  
                  
                  250,000
                  
                  
                  
                  -
                  
                  
                  
                  250,000Proceeds
      from sale of common stock
                  
                  
                  165,000
                  
                  
                  
                  -
                  
                  
                  
                  955,000Proceeds
      from exercise of warrant
                  
                  
                  -
                  
                  
                  
                  690,373
                  
                  
                  
                  1,200,000Net
      cash Provided by Financing Activities
                  
                  
                  607,143
                  
                  
                  
                  691,334
                  
                  
                  
                  2,844,400NET
      INCREASE IN CASH
                  
                  
                  (338,728)
                  
                  
                  
                  58,398
                  
                  
                  
                  225,949CASH
      AT BEGINNING OF PERIOD
                  
                  
                  564,677
                  
                  
                  
                  380,567
                  
                  
                  
                  -CASH
      AT END OF PERIOD
                  
                  $
                  225,949
                  
                  
                  $
                  438,965
                  
                  
                  $
                  225,949SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATIONCASH
      PAID FOR:Interest
                  
                  $
                  7,429
                  
                  
                  $
                  -
                  
                  
                  $
                  11,398Income
      taxes
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -





See
accompanying notes to consolidated financial statements




5





NACEL
ENERGY CORPORATION


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)





NOTE
1 - BASIS OF PRESENTATION




The
unaudited interim financial statements included herein have been prepared by the
Company in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange
Commission. The consolidated financial statements include the accounts of Nacel
Energy and its wholly-owned subsidiary, 0758817 BC Ltd. Significant
inter-company accounts and transactions have been eliminated. We
suggest that these interim financial statements be read in conjunction with the
audited financial statements and notes thereto included in our Form 10-K for the
year ended March 31, 2009, as filed with the SEC. We believe that all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for the interim
periods presented have been reflected herein and that the disclosures made are
adequate to make the information not misleading.  The results of
operations for interim periods are not necessarily indicative of the results to
be expected for the full year.  Notes to the financial statements
which would substantially duplicate the disclosure contained in the audited
financial statements for the most recent fiscal year as reported in Form 10-K
have been omitted.





Reclassifications.




Certain
prior year amounts have been reclassified to conform with the current year
presentation.





New
Accounting Pronouncements.





In June
2009, the Financial Accounting Standards Board (“FASB”) issued an update of
Accounting Standards Codification 105, “Generally Accepted Accounting
Principles” (“ASC 105”) which establishes the FASB Accounting Standards
Codification TM (the “ASC”).  The ASC is the sole source of
authoritative U.S. generally accepted accounting principles (“GAAP”) recognized
by the FASB to be applied by nongovernmental entities.  The ASC
superseded all then-existing non-SEC accounting and reporting standards. All
other non-grandfathered, non-SEC accounting literature not included in the ASC
is no longer authoritative. While the ASC does not change GAAP, it introduces a
new structure that reorganizes the GAAP pronouncements into accounting topics.
All content of the ASC carries the same level of authority.  The ASC
is effective for our financial statements as of September 30, 2009.





In May
2009, the FASB issued SFAS No. 165, “Subsequent Events,” (now ASC 855) which
modifies the definition of subsequent events and requires disclosure of the date
through which an entity has evaluated subsequent events and the basis for that
date. These requirements became effective for us on June 15, 2009. We evaluated
subsequent events through November 10, 2009, which represents the date our
financial statements were issued.





NOTE
2 – GOING CONCERN




The
accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. Nacel Energy has incurred material
recurring losses from operations.  Since inception, Nacel Energy has
incurred losses of approximately $4.34 million. For the three months ended
September 30, 2009, Nacel Energy sustained a loss of $659,422. In addition,
Nacel Energy is experiencing a continuing operating cash flow deficiency. These
factors, among others, raise substantial doubt about Nacel Energy’s ability to
continue as a going concern for a reasonable period of time.




6





Nacel
Energy is pursuing, and will  continue to pursue, additional equity
financing and/or debt financing while managing cash flow in an effort to provide
funds and cash flow to meet its obligations on a timely basis and to support
wind project development activities.





The
consolidated financial statements do not contain any adjustments to reflect the
possible future effects on the classification of assets or the amounts and
classification of liability that may result should Nacel Energy be unable to
continue as a going concern.





NOTE
3 – DEMAND NOTE PAYABLE





In July
2009, Nacel executed a new loan with a lender in the amount of $250,000, which
provides for simple interest of 10% to be paid upon the outstanding
balance.  The note is due on demand and is unsecured.





For the
three months ended September 30, 2009, interest of $6,301 was
accrued.





NOTE
4 - LINE OF CREDIT




At
inception, Nacel Energy entered into an agreement with Mr. Fleming with respect
to an unsecured, no-interest $250,000 line of credit repayable at an unspecified
future date.





Effective
July 1, 2008, Nacel Energy agreed to new terms for the line of credit, which
provided for simple interest to be added to the outstanding balance of the line
of credit, once each quarter, based upon the current 3 month LIBOR plus 500
basis points.  Prior to that date, interest on the line of credit was
imputed to paid-in capital based on the market rate of interest for the
period.





On June
30, 2009, Mr. Fleming loaned an additional $150,000 on the line of
credit.  On July 1, 2009, we ratified the terms for the line of credit
to allow an increase in the balance to $400,000, which provides for simple
interest of 8% per annum on the outstanding balance with interest payments
beginning October 1, 2009.  The line of credit is due July 1,
2010.





On
September 29, 2009, we ratified the terms for the line of credit to allow an
additional increase in the balance to $442,143.  The terms and payment
arrangements remain the same as agreed upon on June 30, 2009.





For the
three months ended September 30, 2009, interest of $8,066 was
accrued.  For the three months ended September 30, 2008, interest of
$2,743 was accrued.





As of
September 30, 2009, the $442,143 line of credit extended by the director was
fully drawn upon, and no further amounts are available for borrowing unless the
agreement is re-negotiated, of which there is no certainty.




NOTE
5 - EQUITY TRANSACTIONS




During
the nine months ended September 30, 2009, the Company issued 105,000 shares of
restricted common stock to Renergix Wind LLC, our project development
consultants, for services related to the achievement of a wind project
development milestone as specified in our joint development
agreement.  We expensed $144,300 during the period related to this
stock issuance.





On
September 24, 2009, the Company sold 220,000 shares of common stock to a third
party.  These shares were sold under the terms of a non-brokered
private placement agreement in exchange for proceeds of $165,000.




7





Item
4.  Controls and Procedures





Evaluation
of Disclosure Controls and Procedures





The Company maintains a system of
disclosure controls and procedures that are designed for the purpose of ensuring
that information required to be disclosed in its SEC reports is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and communicated
to the Company’s management, including the Chief Executive Officer and the
Principal Accounting Officer, as appropriate to allow timely decisions regarding
required disclosures.





For the quarter ended September 30,
2009, we carried out an evaluation, under the supervision and with the
participation of our Chief Executive Officer and our Chief Financial Officer, of
the effectiveness of the design and operation of our disclosure controls and
procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange
Act. In the course of this evaluation, our management considered the material
weaknesses in our internal control over financial reporting as discussed in our
Annual Report on Form 10-K for the fiscal year ended March 31, 2009. Based on
that evaluation, our Chief Executive Officer and our Chief Financial Officer
concluded that our disclosure controls and procedures were effective for the
purposes stated above.





Changes in
Internal Control Over Financial Reporting





To address the issues associated with
our material weaknesses as described in our Annual Report on Form 10-K, we made
changes in our internal controls over financial reporting during the six month
period ending August 31, 2009. A financial consultant was engaged which allowed
implementation of additional procedures for monitoring and review of work
performed by our Chief Financial Officer and to mitigate the segregation of duty
issue where the Chief Financial Officer is involved in drafting financial
statements and cannot conduct an independent review. In addition, we hired a new
Chief Financial Officer with more extensive public accounting and SEC experience
We believe these remedial actions will result in proper segregation of duties
and provide more checks and balances in our disclosure controls and
procedures.





We will continue to monitor and evaluate
the effectiveness of our internal controls and procedures and our internal
controls over financing reporting on an ongoing basis and are committed to
taking further action and implementing additional enhancements or improvements,
as necessary and as funds allow.





Except as noted above, there have been
no changes in our internal control over financial reporting that occurred during
the quarter ended September 30, 2009 that have materially affected, or were
reasonably likely to materially affect, our internal control over financial
reporting.




8




PART
II. OTHER INFORMATION




Item
6.  Exhibits




a)
Exhibits.





Exhibit No.
            
            Document31.1
            
            Certification
      Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 (Mark
      Schaftlein, Principal Executive Officer and Principal Accounting
      Officer)*32.1
            
            Certification
      Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002 (Mark Schaftlein, Principal Executive Officer
      and Principal Accounting Officer)*





*    Filed
herein.





SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.





NACEL
      ENERGY CORPORATIONBy:
            /s/  Mark
      SchaftleirMark
      SchaftleinChief
      Executive Officer and
              Principal
      Financial OfficerDate
            May 12, 2010




9